The number of bedrooms to avoid buying

This week, we chatted with Tyler Howell of Whole Property Management, which manages 550 rental properties in and around the Mile High City.

Average home price: $530,920 (down 4.3% YoY)
Homes that sell over list price: 16.4%
Homes that sell under list price: 63.7%
Average rent: $1,818/month

Lay of the land: “Denver is in an interesting spot right now,” says Howell. “Buyers went wild in 2013 after the Great Recession when marijuana was legalized here. Huge net migration sent home prices soaring, and our skyline was littered with cranes; builders couldn’t put up apartments fast enough. Covid brought in another wave.” But as interest rates crept up over the past few years, this has created “a perfect storm of oversupply.”

The upside? Sales prices have fallen so much that “a real estate investor with the ability to buy in cash is going to get a great deal.”

His advice: Avoid one- and two-bedroom condos. “You’ll have to compete against apartment complexes offering eight to 12 weeks free rent—that’s not a typo,” warns Howell. He owns a two-bedroom that rented for $2,695 per month back in 2023. By 2025, it was renting for only $2,095.

Three- and four-bedrooms are a better bet, and the numbers back this up: “Denver has 15,000 one-bed units for rent today versus about 1,500 four-bed properties,” Howell explains. “I think Denver is an excellent market to retain single-family homes as long-term rentals, especially in light of talk in Washington, DC, about banning institutional investors.” If that takes effect, “the number of single-family rentals in our market could decline, sending rents up nicely.”

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