Some of you own rental properties while others have shown an interest in how rental properties work. As a believer in rental property investments (Jenn and I currently own two rentals) I am always on the lookout for better rental information.
Unfortunately, there is not much information available to the public…and this frustrated me. For the last few months, I’ve been collecting information daily on the Treasure Valley rental market. As my rental properties come up for renewal, and as we seek new properties, I have found this information to be very helpful. I thought you might find it helpful too.
Below is the summarization of the information that I have found. It is based on just under 200 properties that were on the market in March 2021 in the Treasure Valley.
I would love any feedback that you can share. It would be great to tweak this information and provide the information that you actually care about. The reality is that with only one month of information, there is nothing to compare to. So, while this may be kind of interesting, the real good stuff should come out next month.
A few things to note:
- I started with a small list of zip codes that I could initially manage. This is why you don’t see all the zip codes in the Treasure Valley. The codes used include Eagle (83616), Kuna (83634), Meridian (83642, 83646), Nampa (83686, 83687), and Boise (83704, 83709, 83713, 83714). Recently I have added a few more, and you will see that information in June.
- The Cap Rate used here is just one of the metrics that investors use when comparing properties. Since I do not have access to the financing on the properties sold, it was really the best metric that I could consistently calculate. I find it by taking the asking list rent, multiplying it by 12 months, subtracting out the property tax and HOA dues and then dividing that entire number by the price the home sold at. I am only considering homes that have sold in the last 6 months. As you have seen, things are changing so fast in the market that anything older seems irrelevant.
- Townhouses – The majority of this information is for single family homes. However, townhouses present a nice opportunity, typically at a lower sales price. They represented about 15% of the available rentals in March for these zip codes.
Treasure Valley Rental Market – A look at March 2021
The City of Meridian stood out with a decrease in rental inventory as both the 83642 and 83646 zip codes had more properties go off the market than come on in March.
As we dig a little deeper, we see that it was also the second-highest asking price outside of Eagle. Investors were asking about $1.26 per square foot a month in rent.
Both of these zip codes in Meridian are also providing potential cap rates higher than others while fetching over 20% appreciation compared to March of 2020.
All of Meridian seems to be a good bet for investments. Unlike Nampa (83686 and 83687) and Boise (83704, 83709, 83714) that show up all over the place, both Meridian zip codes offer similar returns.
However, despite the big numbers and a drop in inventory this March, early indicators for April show that in Meridian rent may be holding steady or dropping slightly.
If you would like more details on anything here, just reach out and I’d be happy to share what I know.
*Information reflects public information and data from the MLS. It is considered reliable but not guaranteed. Also, I’m not a financial advisor; just a guy that loves to crunch numbers.