Ada County and Canyon County Vacancies:
Below are the results of the first quarter rental and vacancy survey conducted by the SW Idaho Chapter of the National Association of Residential Property Managers. The Ada County results are primarily Boise and Meridian, but include smaller cities such as Kuna, Eagle, and Star. They are getting more participation with Canyon County Property Managers and now can post some meaningful data.
Below are two pie graphs that show that the few rentals that are vacant, 69% of them are multi-family. This data is validated as First Rate Property Management's vacancy rate on single family homes is only 3 tenths of one percent, where multi-family is 2.07%. These statistics could mislead someone into thinking that multi-family is a poorer investment due to higher vacancy. That simply is not the case. The demand for single family home rentals is high and the inventory levels are much smaller and therefore they currently are renting much quicker and we are seeing rents increase. However, investors are doing their best to snatch up homes to rent, so that inventory is growing.
I think it is important to note that financial performance on most of these single family rentals is not as good as most multi-family. Some investors like the small initial investment required and the ease of managing a single tenant. Also, although rental income in comparison to initial investment isn't as good, investors are looking at the real money to be made in the appreciation.
Historical Vacancy Rate:
The line graph below shows the historical vacancy rate from 2007 to current. It is also important to note that these numbers include data from both Canyon and Ada County and the vacancy rate in Canyon County is greater than that of Ada County and therefore skews the data slightly. First Rate Property Management's current vacancy rate is 2.4%, which is just below the average shown on the below chart.
Where should rents be?
The type of average used is called the median, which lines up numbers from the least to the greatest and the number in the middle is the median average. If you have an average 3 bedroom, 2 bath home, with a 2 car garage in an average neighborhood and is in average condition, then I think rent should probably be $850 as indicated on the graph. However, if it is a little larger, nicer, and in a better area, rents are higher. If it is older, not in as good of condition, and in a poorer area, rents may be lower. Hopefully that kind of explains how to read these numbers, as they are not the gospel. Now that I have somewhat discredited the averages, lets compare where First Rate Property Management compares to results of the survey. Looks like I owe the First Rate team a steak dinner!
Single Family Homes FRPM Rents Survey Average
2 bedroom $711.25 $629
3 bedroom $952 $854
4 bedroom $1,209 $1,088
1 bedroom $503 $445
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