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.
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.
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