Buying a Denver Rental in Winter: Why November to February

The best window to buy a Front Range rental is November through February. Fewer buyers are out, the sellers who list anyway have a reason to close, days on market stretch, and a January closing lands the property on the rental market in April, right when Denver metro tenants start signing leases.

This guide covers why the winter market favors investors, what to inspect when the furnace is running and the sprinklers are off, how to time the lease-up, and what a Colorado landlord needs in hand before the first tenant moves in. The Colorado real estate investing guide covers the numbers behind a rental; this post covers the season.

Why fewer buyers are out from November to February

Denver metro home sales run on a calendar: new listings and pending sales peak from April through June and bottom out in December and January. Owner-occupant buyers wait for summer moving season. Buyers who move for work wait for the new year. The holidays and short daylight thin out showings for everyone else.

An investor does not care what month the keys change hands. That mismatch is the whole opportunity. A listing that drew six offers in June draws one or two in December. One offer means the buyer sets the inspection terms, the closing date and the concessions instead of waiving them.

Why the sellers who list in winter want to close

Nobody lists a Front Range house the second week of December for fun. Winter sellers on the Front Range fall into a few groups, and every one of them has a clock:

• Job transfers with a start date in January or February, on the Front Range or out of state.
• Estates and probate sales where the personal representative wants the property closed before the next tax bill.
• Relisted homes that expired in the fall at the wrong price and came back lower.
• Landlords exiting after a tenant left in the fall, paying a mortgage on an empty house through the coldest months.
• Divorce and separation settlements with a court deadline to sell.

A seller in any of these groups negotiates on price, pays closing costs, credits repairs, or takes a 21-day close instead of a 45-day one. The what Front Range investors should verify before buying post lists the questions to ask the listing agent about why the home is on the market.

Days on market and what they buy you

Homes in the Denver metro sit longer in winter than in spring. A listing that has passed 30 days in December with no price cut is a listing whose seller has already had the conversation with their agent. Ask for the price history and the number of showings. Then write the offer with an inspection objection deadline of 10 days, an appraisal deadline, and a closing date the seller wants.

How to inspect a rental when there is snow on the ground

Winter hides some things and exposes others. Use the season.

The furnace is running, so test it

Most Front Range homes heat with an Xcel Energy gas furnace, and a furnace is the single most expensive system a winter tenant will call about. Have the inspector run it through a full cycle, pull the filter, read the manufacture date on the data plate, and test carbon monoxide at the registers. A gas furnace lasts 15 to 20 years; a replacement on a typical Denver metro house runs $5,000 to $9,000 installed. If the unit is past 15 years, ask for a credit or a new unit before closing. Confirm a working carbon monoxide detector on each level, which Colorado law requires in a rental.

Ice dams show the attic's problems

Colorado's freeze-thaw cycle, with 50-degree afternoons and 15-degree nights, melts roof snow from the warm attic side and refreezes it at the cold eave. The ridge of ice that forms is an ice dam, and it pushes meltwater under the shingles. Icicles along one section of gutter and bare roof over the living space next to snow over the garage both point to heat loss and thin attic insulation. That is a $1,500 to $4,000 insulation and ventilation job on most homes, and a fair repair credit.

The sprinklers are blown out, so hold back money for spring

Every Front Range sprinkler system is drained and blown out with compressed air by late October, and on many homes the backflow preventer is removed and stored. The inspector cannot run it. Ask the seller for the fall blowout receipt and the last backflow test, and write a spring re-inspection credit or an escrow holdback into the contract. The Colorado backflow preventer and sprinkler blowout guide explains what the receipt proves.

Radon reads highest in winter

Most of Colorado sits in the EPA's highest radon potential zone. A closed-house winter test gives the worst-case reading, which is the one a landlord wants before a tenant moves in. A mitigation system runs $1,200 to $2,500 on a Front Range house and takes one day.

What snow hides

• Roof condition. Snow cover hides hail damage. Ask for the roof age, the last insurance claim, and a roofer's letter if the shingles are past 15 years. Front Range hail season runs May to September and a roof claim history is a disclosure item.
• Grading and drainage. Snow on the foundation side hides negative grading and downspouts that dump at the wall. Expansive bentonite clay under much of the Denver metro makes water at the foundation a structural problem. Look at the basement walls for the evidence instead.
• Driveway, walks and flatwork. Ask for summer photos from the listing or the seller's phone.
• Hose bibs and exterior faucets. Check for frost-free bibs and any staining on the inside wall behind them.
• Sewer line. The sewer scope works in any weather. Clay and Orangeburg lines under older Denver, Lakewood and Aurora homes fail at the joints, and a sewer replacement runs $8,000 to $20,000.

The heating system problems buyers notice first post goes deeper on furnaces, boilers and ductwork.

Timing the purchase so the rental fills in spring

Denver metro tenants sign the most leases from April through August. A rental that hits the market in March or April rents in days at full price; the same unit listed in November sits and rents for less. Work backward:

1. November to January: write the offer, inspect, close.
2. February: paint, flooring, furnace service, radon mitigation if needed, lock changes, photos.
3. March: pull the rental license and list the unit.
4. April through June: lease signed, tenant in, first full month of rent before midsummer.

A vacant house in a Colorado winter needs the heat left at 55 degrees or higher and someone checking it weekly; a frozen supply line turns a February vacancy into a $10,000 insurance claim. The ways to reduce vacancy on a Denver rental post covers pricing and marketing the unit.

What a Colorado landlord needs before the first tenant

• A rental license where the city requires one. Denver requires a residential rental property license, with a third-party inspection, for every long-term rental inside the city. Other Front Range cities have their own registration rules; check the city before closing.
• Working heat, hot water, and carbon monoxide and smoke detectors. Colorado's warranty of habitability makes these the landlord's obligation, and a tenant without heat in January has remedies under state law.
• A written lease that assigns snow removal. Denver gives a homeowner 24 hours after snow stops to clear the public sidewalk. Put it on the tenant in the lease for a single-family rental, or pay a service.
• Security deposit handling. Colorado sets deadlines for returning a deposit with an itemized statement, and caps late fees. Follow the Colorado rental property checklist line by line.

The Denver landlord winter compliance requirements post lists the city rules that apply between November and March.

Financing a winter rental purchase

A conventional investment property loan on a single-family rental runs 15% to 25% down, with a higher rate than an owner-occupied loan and a requirement that the buyer document reserves. A duplex or fourplex the buyer lives in qualifies for an owner-occupied FHA or VA loan with far less down; the Denver house hacking guide covers that route. Mike Oswald, VP of Mortgage Lending at Rate, NMLS 261003, Equal Housing Lender, prices investment and house-hack loans for Kenna buyers and can fold a seller-paid rate buydown into a winter offer. You are free to use any lender. Start with the Colorado home financing guide.

Where on the Front Range to look first

Rent-to-price ratios favor Aurora, Thornton, Northglenn, Lakewood, Greeley and Pueblo over Boulder, Highlands Ranch and central Denver, where prices outrun rents. Older ranch homes with unfinished basements in Aurora and Lakewood carry the best upside: a finished basement adds a bedroom and $300 to $500 a month in rent. Pull the current numbers from the Kenna market reports and then search homes for sale in Aurora with a filter for days on market over 30.

Where to go next

• Rental property checklist: how to buy a rental in Colorado
• Colorado duplex and multifamily buying guide
• Investment property loans in Denver
• State of the Denver rental market
• Homes for sale in Thornton
• Meet the agents of the Kenna Real Estate Group

Talk to the Kenna Real Estate Group

The Kenna Real Estate Group, Keller Williams DTC, finds Front Range rentals with long days on market and motivated sellers, writes winter offers with the inspection terms and holdbacks above, and hands the buyer a lease-up plan for spring. Call or text 303-955-4220. A live person answers. Not a robot, not a phone tree. Then search every home for sale in Colorado and sort by days on market.