A Safe Investment in Uncertain Times: Multi-Family Properties in Boulder, CO

Jan

A Safe Investment in Uncertain Times: Multi-Family Properties in Boulder, CO

What feels like ages ago, but really just over a month ago, on March 31 we closed another multi-family property in Boulder, 1619 Arapahoe, a multi-family investment property right in the heart of Boulder. What we always knew and especially now during these uncertain times: multi-unit housing, or multi-family dwellings, are a safe investment and investors are looking for safety now more than ever.

What is multi-unit housing (MUH) or Multi-Family Properties?

A multiple family dwelling or Multi-Unit Housing (MUH) is an investment class of residential property in which more than a single family can dwell. These include properties with 1+ unit to large apartments with hundreds of units. For smaller dwellings some investors can live in a portion of the property and rent the remainder of the property, but many multi-family dwellings are acquired strictly as investment property and investors look for tenants to occupy all of the available living spaces.

From the perspective of a bank, MUH properties can be easier to underwrite due to multiple factors. Those can include area demographics, long term operating histories, and diversification. Boulder as a community is anchored by a historically strong economy bolstered by a University, multiple research institutions, and many tech and bioscience companies. Boulder has proven to weather economic downturns in the past, known for being the last to enter and the first to emerge from these economic cycles.

Additionally, with multiple units, MUH properties present multiple income streams, lessening the risk of vacancy and turnover costs. In Boulder the average unit price of MUH investments has grown exponentially since 2010 to an average price per unit reached in 2019 of $330,000. Compare that to the average cost of a single family unit in Boulder at $450,000 right now (Q1 2020 data provided by IRESIS). Boulder has always had a housing deficit with an existing population base of more than 107,000 people and more than 100,000 jobs 56% of those people working in Boulder commute from outside the city limits on a daily basis. And to top that our town has always been buoyed by the University of Colorado, with more than 30,000 students annually 73% of those students live outside of University provided housing… GO Buffs!