Key Points:
- The Denver rental market is experiencing declining renter demand.
- There are proactive steps property owners can make to reduce vacancy time.
- There is no correlation between the monthly mortgage payment due on a property,
compared to the rental rate it will generate.
After many years of strong renter demand, the Denver rental market is facing new challenges in 2025, with slowing renter demand and increased demand segmentation.
Getting vacant Denver rental properties rented quickly is becoming more challenging. To help real estate investors, we put together a five-step process to help secure quality tenants in a market that demands flexibility and proactive landlord effort.
Before evaluating the marketing of an investment property, it is important to understand that there is no direct correlation between the monthly mortgage payment due on a property, as compared to the rental rate it will generate. This can be hard for real estate investors to accept, but the market does not care how much the mortgage payment the owner is paying for that property. Market rental rates are a function of tenant demand and market supply – not of mortgage payments.
While real estate investors may be facing higher mortgage payments due to increasing interest rates, the reality is that tenants are unlikely to pay a higher amount on rent just because costs for the landlord have risen. The key is to ensure that the rental rate of a property aligns with what tenants are willing to pay rather than what a real estate investor “needs” in order to cover their expenses.
How To Get Your Investment Property Rented Quickly:
- The Property Must Show Well
In a competitive market, the presentation of the property is crucial. It is important to ensure that the property is clean, well-maintained, and aesthetically inviting. Updates such as fresh paint, cleaned carpets, new light fixtures, sharp landscaping, and updated appliances will make a significant difference in the showing of a property.
- The Marketing Must Be Comprehensive
Comprehensive marketing is essential to gaining visibility, especially as supply increases. High-quality photos and video tours are vital in showcasing the property effectively. Additionally, paying for premium listing platforms, such as Zillow, can help increase the property’s visibility. In a market where demand is slowing, making the property as findable as possible is key to attracting the right tenants.
- Offer Move-In Incentives
Offering move-in incentives can significantly boost interest in a property, especially when market conditions are more competitive. We have found the most effective strategy to offer is a specific dollar amount off the first month's rent. This helps in attracting tenants to rent a property in the increasingly competitive market. We have seen some multi-family Denver properties offering move-in specials of up to two-months of free rent.
- Reduce the Rental Rate
Properties that previously rented for higher amounts may struggle to secure tenants if the pricing is not aligned with current market conditions. For example, in certain segments of the Denver market, such as condos, townhomes, and multifamily residences, including in downtown Denver, rental rates have declined due to the decrease in demand and increase in supply. Adjusting rental rates quickly in response to these changes will help landlords attract tenants more quickly.
- Review Scoring Criteria
While increasing resident scoring criteria may have seemed beneficial in past years to secure higher quality tenants, in the current market, raising the bar too high can lead to prolonged vacancies. It is important to find the right balance to avoid situations where properties remain vacant for extended periods of time. In Colorado, landlords must also keep specific laws and regulations in mind, as the law prohibits things like accessing the credit score for subsidized applicants and limits the income requirements to be no more than twice the rental rate for all applicants. By keeping your scoring criteria fair, Denver landlords will attract qualified tenants while remaining compliant with legal standards.
Denver Rental Demand
The Denver rental market is currently showing signs of slowing. Demand for rental properties is decreasing, and supply is on the rise. The market is becoming increasingly segmented—this means that while single-family homes still see relatively steady demand, demand for multi-family properties such as apartments, condos, and townhomes is declining. This segmentation means that landlords and real estate investors must quickly adjust their strategies depending on the type of property they own.
In light of these market shifts, it is essential for landlords, real estate investors, and housing providers to incorporate these strategies into their marketing to keep their properties competitive and successfully leased.
At Grace Property Management we believe that when property management is performed with integrity and transparency, both tenants and landlords benefit. Property Management is not just our business - it is a relationship between us, our owner-clients, and our tenant-residents.
If these are important to you, we may be a good fit to provide you, your property, and your tenant-resident with our full-service property management services. Feel free to reach out to us for assistance.
Grace Property Management & Real Estate
Serving real estate investors and residents since 1978.
www.RentGrace.com
303-255-1990
