Note: I should have made this post TWO POSTS. The first part here is about the lastest Rental numbers in Boise. The second part is an investment rundown.
The Southwest Idaho Chapter of National Association of Residential Property Managers released their 2011 3rd quarter survey results for vacancy rates and rental prices in the treasure valley today.
You can view and download the report (right click to download, or if on a iPhone / iPad just touch and hold and open in a new window to save).
If you are an aspiring (or current) landlord the news is good. Both single family homes and multi-family units (duplexes, etc) continue to see rising rent prices year over year (up over 2010 and 2009’s numbers!) and vacancy rates remain very low (under 4% low, which is crazy low). That’s everything you could want in an investment!
The Slumlord Scenario
Lets look at this West Boise home that just came on the market.[idx-listing mlsnumber=”98480480″]
Lets assume you can get this home for an even $90,000Â (I’m not saying you can, just a for instance).Â Using an conventional loan, with 20% down ($18,000) at 4.75% on a 30 year fixed you’re monthly payment (including taxes and insurance) is $512.09 a month. Right now in West Boise you can rent a single family home between $825 – $900 / month.
In other words, $18,000 invested brings you a positive cash flow over $380/ month! Obviously, if you need to factor in things like taxes (boo!), vacancy rate (you didn’t want them anyway) and property management (trust me on this one) you’re yearly net is just over $2,800.
Now ask yourself, if you put that same $18K into the bank are you going to make $2,800 for doing so? In the stock market? Under your mattress? My guess is probably not.