Boise rental market slowdown?

Question

We’re having a hard time renting my property at Boise since it became vacant beginning of August. The property manager says the market has slowed down and they are experiencing around 10% vacancy across the properties they manage.

I was wondering if others have the same experience?

Thanks

I was wondering if others have the same experience?

Thanks

Joey Banasihan · Answer

Hey Oren, currently a Real Estate Investor rookie in Boise. Not sure who your Property Management company is but you should check out Cohesion Property Management, they work along side Boise TurnKey Properties, a Real Estate Brokerage that specializes working with Real Estate investors.

Current Boise Rental vacancies for single family homes are roughly 2.19%; 1.1% for multifamily (Reference: https://www.weknowboise.com/re...)

Current Boise Rental vacancies for single family homes are roughly 2.19%; 1.1% for multifamily (Reference: https://www.weknowboise.com/re...)

Jason Bohling · Answer

I live in Boise (well, Meridian, technically, but 5 minutes from Boise) and that sounds crazy high.  It seems like every other night on the local news there's a segment about how there's a massive shortage of places for rent to the point some people are moving away due to lack of rental inventory.  It's true on the sales side that things are cooling off; they're still selling but people are having to reduce prices.  A caveat is that they aren't reducing prices below what the home is worth (yet) but, from what I've seen, reducing from the irrational over-pricing we've seen in the last couple years down to actual market value or a couple thousand above.  The demand for rentals from what I've seen is still very strong.  If something had to be adjusted, I would say a slight rent reduction may help, as rents are well above what most locals can afford, and as some people (and its not many) are forced to move back to the cities they moved here from, the demand for rentals is still high but the number of people with the ability to pay the higher prices is reduced.  I would definitely talk to some other property managers.

Lexey Vezzoso · Answer

Hey Oren!

I am an agent and an investor here in Boise. We haven't been seeing a slow down in our rental properties. If there are any other questions I could answer for you please feel free to reach out!

-lexey

Ray Johnson · Answer

@Oren H. I missed acquiring in Boise before the boom, but have it on my watch list, so I cant answer about a vacancy rate.

I will add that last week I read an article in the New York Post about Top 5  "Zoom Towns" seeing an exit as people who relocated to cheaper areas over the last two years during the pandemic and work from home phase, are starting to leave those areas as they are being pulled back into the office.

Boise was number one (1) on the list of Top 5 " Zoom Towns" / cities seeing the negative impact, and expected to see continued negative impact. This may be what's impacting your tenant search.

Oren H. · Answer

Thanks for the answers!

My property is a 4 beds SFH. Probably a “b” neighborhood.

To clarify my question, I’m looking to hear if other investors in Boise are seeing a major slowdown in the rental market.

Eric Giovannucci · Answer

Oddly enough, the Boise market is slowing down in rentals from my perspective, but not to the tune of what was previously shared.

I just fully rented a triplex in Nampa (submarket to Boise) in 2 days. I had not even fully syndicated the listing through Zillow, etc and we had 146 applications. Mind you this is in a low-cost neighborhood (1200-1400 for a 2 bedroom).

Overall, if you aren't looking for a 3500-4500 listing, things seem to still be moving from what I have seen.

Disclaimer: I only manage a handful of properties at this time. So someone may have a different perspective that has a larger portfolio.

Greg Weik · Answer

@Oren H. even in the Denver market I would not be able to answer this question for a client, and we manage over 600 doors.  What the market is doing, as @Drew Sygit said, is incredibly local and specific to a given property.  We are seeing some houses in the Denver area still rent very quickly, but other houses in other markets (such as certain Denver suburbs, Colorado Springs, or northern Colorado), or other types of properties have been sitting longer than I've seen in some time.

I suspect Boise is actually fairly similar to Denver in terms of the rental market.  The past couple of years have been very good for rental rates, appreciation, and properties have been renting quickly.  All of a sudden, the brakes have been pumped.  Some of my clients, I know, are very hesitant to respond to the market (even with our guidance) with price drops and condition improvements because they are still mentally in a March/April 2022 frame of mind.  A lot has changed since then and it's important to live in the now.

I think a better way to get the answers you seek from your PM (and you can probably find out these answers without asking them) would be to determine the following: -How does the marketing look?  Do they have good photos and/or a video tour?  -Where is your property listed?  -How responsive is your PMC to showing requests?  Do they make it easy or difficult to see your property?  Are they super-responsive, or slow to react? I would suggest either posing as a prospective tenant or having someone you know pose as a prospective tenant to see how the PM handles incoming inquiries.  I know that at my company we assume every inquiry we ever see is what we call "a mole" and it helps to keep my team on their toes.

If your PMC is handling the above well, then all you can do is lower the price and/or improve the condition of the home. Hopefully, your PMC can give you some better insight on what it will take to get your property rented, other than just blaming "the market".

Drew Sygit · Answer

@Oren H. logically, vacancies are affected by location, property condition, and target tenants.

For instance, a Class A property usually rents faster than a Class B, which rents faster than a Class C.

What class is your property?

Oren H. · Answer

Thanks @Ray Johnson!

We talked with a few local folks and realtors and indeed find that the market is cooling off. People mentioned that some folks are moving back as they need to get back to the office. Also heard that since house prices are declining some opt to buy. Seems that we need to be more aggressive with pricing the unit.

Oren H. · Answer

Thanks for the reply @Greg Weik!

I think my PM is doing a good job marketing the property and is very responsive and it seems the market is changing. They are managing 300+ properties and if they say 10% of their properties are sitting vacant right now that's alarming. That's not just my property but many properties across different neighborhoods.

I have already lowered prices and agree with your advice we need to live in the now.

Boise rental market slowdown?

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