Boise Investment Property Specialists

Real Estate Investor Blog
Boise area real estate and rental management blog

Real Estate Investors Flock to Boise...but why?

Low Property Tax:

Property Taxes in Boise range from 1.1% to 1.8% of assessed home value, depending on location. Meridian is about 1.3% and Eagle is 1.1%. Investors looking at Canyon County can expect to pay about 2% of the assessed property value.

Low Cost Housing:

Boise housing is still considered affordable, especially when considering where the cities migration is coming from. However, with the double digit appreciation year over year, it's creating a bit of a housing crisis for locals. Demand is high, supply has been an issue, and locals are often beat out by cash buyers from coastal states.

Employment Growth:

Boise continues to be a national leader in both population and employment growth, which trips the national average. In the last couple of years, the population has increased, meaning jobs have been created to sustain the growing city. Boise is no longer being overlooked and has a lot to offer in regards to work and recreation. People looking to work in either education or health services might find great opportunities in the Boise area.

Boise's Strong Rental Market:

The employment and population growth as described above has created a shortage of rental housing. Also mentioned above, Boise median home prices are increasing. In fact, they are increasing far greater than wages. All these factors have caused rents to continually increase with record low vacancy. According the the SW Idaho Chapter of the National Association of Residential Property Managers, Ada County vacancy for the 2020 Q1 was 2.7%.

Even with the steep increases in rents, Boise doesn't boast the nations highest cap rates. It simply has the growth and overall desirability that many investors crave.

Idaho's capital city is also the home of the largest student market in the state of Idaho. Boise State University is the largest, with satellite campus contributions from the University of Idaho and Idaho State University.

Idaho Lifestyle:

The quality of life in Boise is said to be one of the best, but there are other contributors to Boise’s growth. When California suffered a wave of wildfires that burned homes to the ground, the slow response and regulatory red tape caused many folks to cash in their insurance check and move to other locations, like Boise. Many new Boise residents moved to escape the high regulatory metros. When cities like Portland, Seattle, and the Bay Area create new rent control laws and more regulation, the investors seem to flock to Boise which has reasonable landlord/tenant laws. Even COVID has created a demand to move to more rural Idaho.

Boise is considered a great place to retire. With the low cost of housing, those moving from the big metro areas can buy the home of their dreams. Boise’s access to the outdoors is one of the best, while the true four seasons offer a host of recreation. The winter brings snow sports and the summer is great for water sports and golfing Which leaves plenty of time to bike, hike, rock climb, and hunt.

For now, Boise seems to be hitting all the marks for real estate investors:

Low taxes, strong employment growth, continued population growth, double digit appreciation, relativity low housing, and a strong rental market with low rental regulation.

Stacy McBain and Tony A Drost

What to Expect in Your 2020 Tax Assessments

Assessment notices are scheduled to be mailed out Memorial Day weekend (what a great way to celebrate!) and to be clear, they are the assessed value of your property as of January 1, 2020. The big takeaway here is the assessments will not reflect our current pandemic in your assessment. This will most likely will be recognized in next year’s assessment as it has occurred in just the previous few months.

The multifamily market is still going strong. Overall we expect assessments to increase 8-15% on 5 units and up. Market rents increased on average in the range of 8-10% in 2019 and vacancy was around 4-5% depending on location. As for the residential income properties (duplex, triplex and fourplex units), value changes could range anywhere from roughly 5-35%. The vast majority will fall in the 10-25% range, again depending on location and property type. Single family homes assessments were still being worked on at the time this was written but, I am guessing you should expect assessment increases in the 5-20% range.

If you feel your assessment is too high, you have until June 12th to file an informal appeal and until June 22nd to file a formal appeal. The difference between the formal and informal appeal is, an informal appeal can be handled through the assessors without the approval of the County Commissioners. If you wait until it requires a formal appeal those have to be submitted to the County Commissioners and require more work and are potentially riskier. As always, it is best to get your appeal in as soon as possible for best results. Also, for income properties be prepared to submit the previous 3 years of income and expense statements.

There are a lot of unknowns in so many areas right now. We will do our best to help you navigate any potential issues and try to keep you as updated as we can. Please contact your local friendly Swope agent with any questions or if you would like help submitting an appeal. Take care!

Shane Brown, Swope Investment Properties

Breaking Down $1 of Rent

Below is a very good graphic provided by the National Apartment Association that explains the value of $1 of rent. It creates a clear transparent breakdown of where the money goes and in our opinion clears up the misconception that "landlords" take home large margins of profit. This is a valuable educational tool that landlords and property management companies should consider sharing with their investors and tenants.