Investment Blog

Investing In Your Future - CU Growth & Housing

By Kevin Schill

In today’s Boulder Daily Camera an article appeared on the subject of CU's intended growth of it’s Engineering Department by 2020.  This growth would double enrollment to 8000+ students and add 125 faculty.  The article did touch on the need to build 300,000 square feet of additional space to house the growing department, but what it did not discuss was where these 4000+ students were going to live.  At the end of January the Boulder County Business Report stated that there was a zero vacancy rate on rental properties in the University area.  

This will be an interesting dilemma for the University and the City of Boulder.  What could happen would be additional student housing growth outside the traditional University area which now includes University Hill, Goss Grove and the closer in areas of Martin Acres, and Aurora.  

What this means for the real estate investor is continued and expanded high demand and diminishing supplies.  With real estate investing there are three measures that contribute to the quality of the investment.  #1 Appreciation - According to our Northern Colorado MLS Boulder has seen an 11.4% price appreciation in the past 12 months, and over 33% in the past 10 years (which included 3 years in a major recession). #2 Cash Flow - Cash flows in Boulder are modest, but cash flows are dependent on if, and how, the property is leveraged.  Solid positive cash flows can be found on the right properties. #3 Equity Buildup - As you collect rents, and those rents pay down the mortgage  you are building more equity on the property, this happens more quickly with our current low interest rates.  When we put these three measures together we generally see quite favorable investment returns in the Boulder market.

If you have been looking for a low risk way to diversify your portfolio, student housing in Boulder may be right option for you.  

© Kevin Schill 2018