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Real Estate Investor Blog
Boise area real estate and rental management blog
Now, there's some catching up to do










We’ve tracked the Ada County, which includes the cities of: Boise, Eagle, Meridian, Kuna, and Star, fourplex metrics for 17 years now and it’s something we look forward to sharing each month, because they are so telling.


Each metric has a purpose and each trendline helps tell a greater story about the overall market.  Unlike the other metrics, Gross Rent Multiplier (GRM) is a good "first look" formula to apply.  It is the ratio of sales price to gross rents.  Anyone can multiply the gross monthly rent times the multiplier.  If gross monthly rents are $5,000 per month and the multiplier is 200, a ballpark value is $1,000,000.


 This month, we’re focusing on Gross Rent Multiplier (GRM) and the incomplete messages it may be sending.  At a glance at the rising GRM might lead and investor to believe that the sales prices are incrreasing faster than rents. Surprisingly, that’s not actually the case, despite that upward trend line which might suggest otherwise. Rents are increasing rapidly right now.  Current rents are generally not market rent, especially in this crazy Boise market.


The reason for this data “discrepancy” starts with events that occurred well over a year ago.


In late March of 2020, the State of Idaho and the city of Boise issued the stay-at-home order.  As businesses closed and folks lost their jobs, Landlords became concerned about tenants’ abilities to pay rent.  If rent wasn’t paid, how would landlords cover their expenses, such as the mortgage, property insurance, and property taxes?  All of a sudden, the notion of collecting some rent, seemed better than taking the risk of receiving no rent.  In the midst of a global Pandemic, the term “market rent” was quickly excused. 


The Pandemic was affecting us all, and we had to work together to get through it.  The Landlords needed rent to cover their expenses and tenants needed a place to live.  As a result, many investors and property managers focused on renewing their valued tenants at current rent, or in some cases, at a lower rent through the months of April and into the summer.  Most lease renewals were for at least 12-months.  As we all know now, the “pause” in Boise, was short lived and the Pandemic and stay-at-home order only fueled the appeal of Boise and the migration continued stronger than ever.


Now, there’s some catching up to do.


We use actual rents when calculating GRM, becuase historcially, many embellished the published market rent within the MLS.  In most cases, the actual rents for these fourplexes being sold are far below market rent.  Due to what we just described what happened last spring with lease renewals, we’re seeing actual rents around 30% below the current market.  When evaluating an investment property, it’s important to use a market rent. That will help bring the GRM back down and balance out the otherwise alarming GRM.


In summary, the Pandemic caused some panic and fear, which locked rents for a year or more.  Meanwhile the Boise market exploded and most of the rents for income properties hitting the Boise market today, are far below actual market.  Most investors realize this and are applying market rents in their valuations and the inclining GRM is not as concerning.


Your Boise Investment Properties Team


Stacy McBain, Associate Broker, Swope Investment Properties

Tony A Drost, Associate Broker, Swope Investment Properties

Residential Round Up: Homeowners Exemption and More

It's no secret property taxes in Boise and surrounding areas are on the rise. With the rate the Boise market is growing, assessors are trying to keep up with the times. A large concern coming out of this is the idea of people being priced out of their homes due to the rising taxes. In an effort to provide some relief, House Bill 389 was recently passed which increases the homeowner's exemption from $100,000 to $125,000 or 50% of the assessed value, whichever is less. Additional changes also include the state's circuit breaker program, calculations for budgeting, and how new construction factors in.


The circuit breaker program which was put into place to help seniors, widowers and those with disabilities, is increasing by $180 but also tightening up the requirements for who can apply, preventing approximately 15% of those currently enrolled from being able to stay in the program.


When it comes to each districts budgeting, this bill restricts the additional new growth budget amount to a cap at 8% in any budget year. The bill also prevents new construction to be factored into the new growth calculation until completion.


Although there is some relief in this bill, the large concern is that it's not enough to really impact homeowners while it's real affect is quite harmful to the funding of services and government expenses like fire service, roads, parks, etc required for our quickly growing community.

Paige Brown, Associate Broker, Swope Investment Properties

Will Spike in Property Values Mean Higher Taxes?

There’s no question that home values in and around Boise, have been on the rise. Just about anyone can attest to the hot market here in Boise, whether they’re from Treasure Valley, the West coast or the County Assessor’s office.


The question homeowners ask is about their property taxes. That figure doesn’t hit mailboxes until the end of the year, but the property assessment notices are heading our way now and they are a big part of the equation.


You may recall the days when assessed values seemed to lag behind market values.


The operative word of today is accuracy. The Ada County assessors are mandated to be within plus or minus 10% of the true market value at end of the year, and their data says they’re getting close, but closing a gap. And that gap likely got bigger last year by steps taken to reduce taxes during the pandemic, which is something that Idaho did, where other states did not.


“A $60,000 - $80,000 increase in single family home values is not unheard of,” said Dan Curtis, from the Ada County Assessor’s office. His office struggles to keep pace, has some new assessors on staff, and is willing to address any inevitable errors that arise in their value numbers.  Ada County includes Boise, Eagle, Garden City, Kuna, Meridian, and Star.


When you receive your assessment notices, here are some steps to take.

1. Remove jaw from floor.
2. If you think the value is above your true market value, immediately start steps for an informal appeal.
3. If you are not sure, contact your agent at Boise Investment Properties,who can help you determine if it is, and help provide data to support an appeal.
4. If you wish to play an active role in the impact this will have on your property taxes, attend the budget hearing meetings listed on the back of your assessment notice.


The Tax Formula

Property Taxes = Assessed Value x Levy Rate.
Assessed property values are a key part of the formula that’s used to create your property tax bill. The other part, the levy rate, is determined by the budget hearings, where they figure out how much money they need. Those hearings are public, although few attend.


The Assessed Value Appeal

Gather supporting sold property comps and adjust for time to 12/31/2020.
Your real estate agent at Swope Investment Properties can help with that. Call the assessor listed on your assessment notice.
Informal appeals may be advantageous, but should be done early.
June 28th is a firm deadline for any appeal, formal or informal.


Estimated Ranges for Assessed Value Increases in Ada County

1 unit/single family: 10-40% increase with a 25%-28% median. Older properties could reflect larger increases due to wider gap to close. Be sure to file for Homeowners and Circuit Breaker exemptions, if eligible.


2 -4 units/multi-family: 10-40% increase with a 30% median for duplexes, and 20% median for triplexes and 21-22% median for fourplexes.


5+ units/multi-family: 27% median increases in values with some as high as 45%+. These apartments are being reappraised this year, for the first time since 2016. Their rent study shows a 1% spread between market and current rents. With appeals, they’ll ask for trailing 3 year and January 1st rent rolls, said Craig Church.


Industrial: 27% median increase


Office: 10% median increase


Stacy McBain, Association Broker, Swope Investment Properties

Your Boise Investment Properties Team



Strong Rental Market Continues to Push Prices

As rents continue to increase in the Boise area, Ada County fourplex prices continue to increase.  April 2021, was a big month for fourplexes, with nine sales, of which included 7 in Boise, 1 in Meridian, and 1 in Kuna.


Double click the image to enlarge the graph, or call us for a full explanation of the data and what it means for your fourplexes value.





Average Fourplex Price:  Year-to-date average sales price for four plexes within Ada County, which consists of Boise, Meridian, Kuna, and Star is nearly $200,000 per rental unit.  Two fourplex share the high this year at sales prices of $900,000 each.  One was located in SE Boise and the other was in NE Boise.


Price Per Square Foot:  Investment properties are rarely valuated by a price per square foot.  We track the data solely for trending purposes.  Investment properties prices in Boise continue to increase, and it’s no surprise to see the price per square foot trending upward as well.


Gross Rent Multiplier:  Is the ratio of the price of the real estate investment to its annual rental income before accounting for expenses such as property taxes, property insurance, and utilities.  For a prospective real estate investor, a lower GRM may represents a better opportunity.


The GRM is useful for comparing and selecting investment properties where depreciation effects, periodic costs (such as real estate taxes and property insurance) and costs to the investor incurred by a potential renter (such as utilities and repairs) can be expected to be uniform across the properties (either as uniform values or uniform fractions of the gross rental income) or insignificant in comparison to gross rental income. As these costs are also often more difficult to predict than market rental return, the GRM serves as an alternative to a measure of net investment return where such a measure would be difficult to determine.


The current trailing 6-month average GRM is 205.  As an example, if you have a fourplex that you want to sell with gross monthly rents of $4,100, value using Gross Rent Multiplier, would just a value of about $840,000.


Today, it is quite common for GRM to be quoted by real estate professionals using annual rents rather than monthly rents. A 205 GRM (monthly rents) = 17.08 GRM (annual rents).


The common measure of rental real estate value based on net return rather than gross rental income is the capitalization rate. In contrast to the Gross Rent Multiplier, the cap rate is not a multiplier but a rate of annual return.


Capitalization Rate:  The trailing 6-month average for cap rate is currently 4.12%, but the trend has been sub 4 cap.  The capitalization rate (also known as cap rate) is used in real estate to indicate the rate of return that is expected to be generated on a real estate investment property. This measure is computed based on the net income which the property is expected to generate and is calculated by dividing net operating income by property asset value and is expressed as a percentage. It is used to estimate the investor's potential return on their investment in the real estate market.


While the cap rate can be useful for quickly comparing the relative value of similar real estate investments in the market, it should not be used as the sole indicator of an investment’s strength because it does not consider leverage, the time value of money and future cash flows from property improvements, among other factors. There are no clear ranges for a good or bad cap rate, and they largely depend on the context of the property and the market.


We will continue to follow and measure the Boise investment property market.  Feel free to contact us with any questions.

Boise Hits Record Low Rental Vacancy

The SW Idaho Chapter of NARPM just released its 1st quarter vacancy survey and the results are record breaking.  The data collected indicates that the trends in Ada (Boise, Meridian, Kuna, Star, and Eagle) & Canyon county vacancy rates have decreased by 3.47% from the 1st quarter of 2020 to the 1st quarter of 2021. This is the lowest point vacancy rates have been reported in over 15 years that the SW Idaho Narpm Chapter has been collecting data. 

Melissa Sharone, with First Rate Property Management states that the company's average vacancy of the past 6 months is half of one percent for the past 6 months and sees that trend continuing. Currently the only vacancy that First Rate is experiencing is the time that it takes to get the turnover completed, which is about 5 days.  Our average days on market right now is 10 days which is also at an all time low and 20 days prior to the current tenant vacating that same rental. 

Ada County single family market rental rates increased this quarter by $105.00 per unit in monthly rent cost. While multi-family units in Ada County increased by an average of $46.00 in rent per month in the 1st quarter of 2021.  The high demand and low supply is continuing to support rental increases across the board.  First Rate Property Management expects the rental market to continue to strenghen into the 2nd quarter.

To see the full report, please vits First Rate Property Management's website  2021 NARPM Vacancy Survey


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