I am looking into a deal in Boise Idaho that I would like to ask a question about. I am wondering how much in Idaho a typical lease goes for? I was looking on CREXI and it showed around $1.5-$2.0/sqft. Any one have any insights.
Investor · Portland, OR · Member since 2016 · 14 posts · 1 vote
1y
Hi Bo - I'm based in Portland, and RAL leases are all over the place. CREXI doesn't really have a way to search for RAL properties for lease, just for sale. I just purchased a property that has an experienced operator in place, renting for $2.50/sqft. After talking to as many operators who would chat with me here, location is the most important factor - it keeps the beds full. Similar properties about 2-3 miles away are renting for much less. The best resource I've found here is a Facebook group called Oregon Adult Care Homes. It's a good mix of operators, caregivers, and vendords (RE agents, licensing support, etc.). This is how I found operators who were willing to speak with me to help me understand the industry. Definitely call up some operators in your area to get a better sense of the market.
Pay attention to what's going on in the RAL industry in your area. In Oregon, there has been an explosion of RALs in SFHs, so much so that some counties stopped issuing new licenses for a while. It has since been lifted, but some operators feel that the market has become oversaturated. This means that operators may be running for parts of the year partially occupied but still fully staffed - which in turn will drive your rents down at lease renewal.
I found this https://public.tableau.com/app/profile/idaho.certified.famil... that seems to indicate most licensed properties in Boise have 50%+ vacancy. So to do a deal where you haven't yet placed an operator, you might need to be lean on the rent to get an operator in place.
Also the county where I'm in has a licensing process that takes about 4 months to approve a new operator. Whereas the next county over takes about 2 months. This is going to make a big difference in how you structure your leases especially re: termination, and your financial planning during turnover. If your tenant leaves and you want to place a new operator, they have to start licensing over, the license is not transferrable.