COVID Affects Boise Vacancy and Rents
As reported by Julie Tolifson, RMP with First Rate Property Management, Boise, ID
The National Association for Residential Property Management; SW Idaho Chapter to have a 4.14% Vacancy for Q2 of 2020. The industry has been stagnant since Q1. Similar to last quarter, landlords are wanting to be proactive and anticipate a potentially higher vacancy. In order to combat this challenge, many landlords are minimizing increases or, in some cases, not even increasing at all. For this reason we are not expecting drastic changes in the seasonality of our vacancy, however, we do expect to see a lesser increase in average rental rates.
Last quarter, we predicted the affects of COVID-19 on the rental market. We anticipated vacancies to trend upward as a result of social distancing and stay-at-home-orders. While the trend did not increase, it also did not decrease.
First Rate Property Managements vacancy rate for the past 12 weeks has been at an average of 1.83%. In our last report we indicated that First Rate Property Management recommends being less aggressive on renewal rates. This has proven to be successful in Q2. While the market has not taken the dip that we all anticipated in March, we are also seeing more people renewing their lease than usual. This has resulted in a well-balanced turnover to renewal ratio.
In Q3 we anticipate the market to slow down in accordance with the usual property management seasonal trends. While we continue to try and navigate this unprecedented circumstances, we will continue to find a balance in renewal rates until the treasure valley market starts to acclimate to a new normal.
Scheduling Maintenance for Rental Properties
Maintenance by Season
Lacey Hofman - Monday, July 20, 2020
When looking at routine maintenance, proper planning can save time and energy. There are different projects a property manager or Landlord can focus on, depending on the time of year. Planning and setting the expectations with the vendors prior to the work starting will help ensure there are less last-minute issues and changes. Investors with properties in areas like Boise, who have four seasons, should be planning their routine maintenance and improvements a year in advance. There is a lot of maintenance that should avoid wet and cold weather, so you plan those in the summer.
Spring is when irrigation sprinklers are scheduled to be turned on. Spring’s cool temperatures with a fair amount of rain makes it a great time for landscaping projects and planting trees and bushes. Spring is also the time to have your HVAC serviced before the heat hits.
Some of the best projects to plan for Summer are exterior projects, such as: exterior building painting, sealing and restriping parking lots and fire lanes, power washing sidewalks and buildings, or cleaning gutters and flat top roofs. Since most of these projects require warmer temperatures to complete, having everything ready for the vendors to start will be important. Most won’t have time to sit down to plan, execute, and follow-up on any routine maintenance once the busy summer time hits.
Fall is a good time to do work on exterior projects that were not able to be finished during the summer months. Sprinklers are blown out in the fall. Landscape planting and tree and shrub trimming are best to be performed in the Fall or Spring. In fall, consider inspecting your properties and making a list of improvements and repairs for next year. Fall is also the time to have the HVAC serviced to make sure the furnace works for the cold temperatures to come.
Winter is slow, so this is a good time to make interior improvements. It’s also a good time to sit down and create your plan for next year’s routine maintenance for each of the seasons.
By planning ahead seasonally, Landlords will be able to better balance and handle their workload, which in return will allow them to properly care for their properties. Plus you won’t have to defer maintenance needs, which as you know is often a pitfall in property management!
June 2020 Four Plex Prices and More
There are currently two active 4-plex investment listings in Boise. Both Boise 4 plex listings are over 30 years old and priced at an average of about $540,000. Eagle has eleven 4 plexes to-be-built and listed at $675,000 each. Meridian has four 4 plexes that are all one-year old 4 plexes listed at $725,000 each.
In looking at performance for Ada County (Boise, Meridian, Eagle, Kuna, and Star) residential income 4 plexes, the trailing 6-month average for Capitalization Rate and Gross Rent Multiplier are 4.85% and 152.75 respectively. To receive a full report with graphs, please contact.
Stacy McBain at firstname.lastname@example.org or
Tony A Drost at Tony@BoiseInvestmentProperties.net
Ada County 4 plex Metrics - May 2020
Inventory of duplexes and four plexes reduced greatly in May. Ada County, which includes Boise, Meridian, Kuna, and Star, only had 12 four plexes listed, which include 10 yet to be built.
Pending deals are down across the board. Ada County only had 1 four plex and Canyon county had none. Sales in May dropped to 13, down by 7.
Low inventory likely had an affect on prices and overall performance. Below are the numbers for Ada County four plexes:
Price per rental unit: $150,000
Price per Square ft: $160
Monthly Gross Rent Multiplier:150
Cap rate: 4.8%
Days on Market: 7.2
Boise Apartment Construction Leads the Nation
According to Multi-Housing News, Boise, Idaho leads the nation in top-performing multifamily metrols for units underway as a percentage of existing stock. https://www.multihousingnews.com/post/top-5-markets-for-construction-activity/?fbclid=iwar09h4si8_mn6xyaqehdlbhuvpglpdwdjqliwpgge9jif7kscjza1irnnvs
Thanks to the population and employment growth and a low cost of living, the Boise rental market is within the top metros for rent growth. The Boise metro’s population has increased by 21.5 percent since the 2010 Census. As a result, multifamily demand spiked, with 1,604 apartments completed last year, the highest level over the past decade. Developers were working on almost 3,100 units at the end of April, representing 8.3 percent of inventory.