First Rate Property Management Owner UpdatesBOISE RENTAL RENTS UP, VACANCIES DOWN Currently First Rate Property Managements vacancy rate is 2.7%. Our year to date average is 1.75%, down from 2.91% at this time last year.We are pre-leasing over 80% of the available units while rent has increased on average 10%.  Tony A. Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc. Boise, ID IDAHO HOME PRICES CONTINUE TO RISE Idaho Home Prices - 4th Biggest
Gain in Nation:Below is a link to an article out of Spokane talking about Idaho home prices having the 4th biggest gain in the nation.
Vacancy Rate Boise Idaho:
Currently First Rate Property Management's vacancy rate is 4.1%. This is due to new tenants moving into these units later in the month than usual. Next weeks' projected vacancy will be around 2.8%, which is average for this time of year.
 BOISE HOME PRICES GROWING
Boise Home Prices Grow:
Below is another article describing
improved home values in the Boise area.
HomePricesGrow
First Rate Property Management Vacancy Rate:
Below is a chart showing our current vacancy rate of 2.7%. This is our lowest vacancy rate for the first week of May ever. The Boise rental market continues to exhibit strength with low vacancy and improving rents
 Tony A. Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  . BOISE PROPERTY MANAGEMENT INTERNET REVIEWSAs far back as I can remember I would find meaningless yet entertaining writings on bathroom walls. Who could have known that these were the predecessors to what we now call Internet Reviews. I’m sure all of you have read Internet Reviews at one time or another and I really wonder who is actually finding them helpful. To get an understanding of why I compare them to the mindless writings on bathroom walls, I invite you to review First Rate Property Management's Reviews. What I would like you to do is go to GOOGLE, type in the search words, "Boise Property Management". Most likely we will be the first or second business listing on the first page. Those on top are pay per click ads. Once you find our listing, please click on Reviews and feel free to read them. For one, you will find that every poor review was posted by an alleged past tenant. I say alleged because in most cases we cannot find a tenant by the name of the person posting the review, nor can we find any data within our system that collaborates their story. In some cases, I think it is a situation of mistaken identity, meaning they posted the review to FRPM, but was writing about another company. But some of the reviews are so outlandish, I honestly can't figure out how they came about. Really, who is to say they aren't posted from a competitor hoping to discredit us, hoping it helps them. GOOGLE has proven that they have no method or process to ensure that reviews are legit and accurate. In fact, my colleagues from California have stated that reviews on some sites have run companies out of business. Based on what? In my opinion, these reviews are about as valid as me calling some number on the bathroom wall thinking I will find true love.
Ok, I think I have totally
discredited the negative reviews. Most
are fictitious and those that may actually be related to an actual experience
are likely from a disgruntled tenant that was appropriately charged for damages
upon their exit. Now let’s look at the
positive reviews. I know that most of
those are factual because in most cases, those people let us know how happy
they were and that they wanted to share it with the world by posting to the internet.
So there is another difference. Legitimate reviews are preceded with
communications to us, prior to posting to the internet. If the "Nay Sayers" actually wanted
resolution, we know they too would also contact us and work for a solution.
 Regardless, until these internet
companies take an actual interest in ensuring reviews are real and legitimate
and internet users quit relying on what they may innocently believe to be
reality, internet reviews can pose a serious issue. For example, a prospective tenant of one of
our properties may read the reviews and decide to look elsewhere. Now that isn't a problem with prospective
owners, as we have no negative reviews from owners. But it is a concern about prospective tenants.
In order to find the best tenants possible,
we need to appeal to as many as possible. So, if you would like to help and have had a
positive experience with us, we ask you to do a couple of things. Please use your favorite search engine, like
Google and click if you found the review to be helpful or not. That hopefully will help discredit the
fictitious reviews. Next, if you believe
our service is note worthy, we invite you to post a review using the below
instructions. If going through all the
hoops necessary to post a review is troublesome, please feel free to email me
at Tony@FRPMrentals.com.
Steps to write a
review for First Rate Property Management
1) Go to link and
click on "Write a Review"
2) Depending on the
site, you will need to create an account if you do not already have one.
(Clicking on write a review will inform you to either create an account or sign
in if you already have one)
3) Once signed in,
write the text of your review, select a rating and click submit.
The links below take
you directly to a page to write a review.
-Google Places
-Yahoo Places
-Yelp
-Yellow Pages
BOISE AREA RENTAL VACANCY REPORTSFirst Rate Property Management's current vacancy rate is 1.6%. In the week ending March 31st, FRPM's vacancy rate was 1.1% as compared to 2% - 4% for the Boise/Nampa area rental markets.  Boise/Nampa Area Rental Market Summary: All indications from the Q1 2013 survey are that the rental market is highly favorable for rental property owners enjoying low vacancy rates and rental rates rising even over the frigid winter. Vacancy rates continue to hold an impressive position in Ada County that is notably better than the national average. All market segments surveyed in Ada County saw an increase in rents with the exception being 5-bedroom, single-family homes, which is a segment with an often limited amount of data and therefore larger margin of error.  Canyon County saw a significant improvement in the multi-family vacancy rate, which was previously a drag on rental performance in the county. With this improvement, vacancy rates by every measure in the Treasure Valley are outperforming national averages. Rents increased for all Canyon County market segments other than one-bedroom, multi-family, which was flat. For a more precise conclusion refer to the link below to view the recent vacancy survey conducted by the Southwest Idaho chapter of NARPM. http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  NATIONAL VERSUS BOISE IDAHO HOUSING INVESTORS
Above is a link from CNN Fortune
discussing investors involvement in the recovery of the housing market. In the
article it states that perhaps investor interest has peaked. As usual, I think
the general message is on track, but I believe the Boise area market differs. In dealing with my own clients, my numbers are down, but it certainly isn't
because of lack of investor interest. It has to do more with lower inventory
levels and finding the right property at the right price. So as as the article
suggest, this may make for a great time to sell and investment property.
 The article also discusses home
rental rates flattening out. That may be the case nationally, but that is not
yet the case within the Boise area. The author sites information from www.Trulia.com. From my experience, Trulia does a
good job collecting home sales and rental data. As far as I can tell, they take
that data and develop an average based on some basic criteria. I think the data
is good in identifying trends but not necessarily an accurate sales value or
rent amount for one specific home. Perhaps the average home sale in a certain
area is $250,000, but the home you are interested in has multiple levels, more
or fewer upgrades, larger lot... and the list goes on and on. Those
differences can be fairly minor, while many are actually very important and can
affect actual value or rent greatly.
The Blue Print to
Organizational Greatness:
 A client of mine forwarded me this
great article about the Boise State Bronco football team. I thought the article
was very good and the book they reference, Good To Great, is also a very good
book. In fact, I actually quote directly from the book within our policy and
procedure manual. One such quote is, "Why is Good the Enemy of
Great?"...because we at First Rate Property Management never want to
settle with just being good. We always want to seek continuous improvement so
that we can become great. I hope you enjoy the article and maybe you have a new
book to read.Boise State Football and The Blueprint for Organizational Greatness Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID 
WHY THIS IS THE BEST TIME TO BUY INVESTMENT PROPERTY
The link above is to an article from
the American Apartments Owners Association. I found it to be a good read and
agreed with most of it and perhaps he is generalizing for space requirements. I
offer the following comments.
Look For Cash Flow:
Within the article the author, Russ
Whitney, described his description of why so many investors lost their shirts
when the bubble broke. Like the author, I agree that when you invest, the
property should perform on its own and let appreciation be the bonus, not the sole
reason. I saw the same thing he did which is what I call speculative investing. The property didn't cash flow and the investor was betting on appreciation. Before the collapse, I saw a lot of investors make a ton of money. But like
most investments, the higher the risk, generally the higher the return. But
unfortunately many of those who did that, continued to invest and found
themselves without a chair when the music stopped. So my personal approach
likely won't make you rich over night, but I think it will help develop
long-term wealth.
Single Family versus Multi-family:
I personally have pretty much
followed his thoughts and invested in multi-family. But, I don't think that
needs to always be the case. In many areas of the country, rents in comparison
to sales price are very strong and performance is good. As of late, Boise home
prices in comparison to potential rents, have been strong and offer decent
performance. But for how long? Also, I tend to follow the performance. In
2005-2007, investor demand shot up values in most segments of the market.
However, because of price point, apartment values were not as much influenced
and offered stronger performance. So I moved out of single family homes and
small multi-family properties and exchanged into apartments. I did well on the
sale because of the increased values and put the money into something with
equal or better performance. Then after the market crashed and values sunk, 4-
plex prices made for outstanding performance and made the best sense to me. Although
I generally agree with Mr Whitney's thoughts, it is my opinion that markets
vary and no matter what market you are looking to invest in, be sure to have
someone there that knows the market and can provide data to help you make the
best decision.
Follow my Lead:
Unlike Mr. Whitney, I am not
comfortable at all to state that if you follow my lead, you can become wealthy. I do however believe that I can provide my clients with the information to make
a well-informed decision and in general, I'd like to say that my clients have
invested well. Did some over pay? Sure in 2005 and 2006 I helped clients perform
exchanges where values were very much inflated. But in many of those instances,
those clients sold other properties for an equal or greater inflated price and
the performance of the replacement property was greatly improved.
The Three Reasons Why to Buy Now:
Within the article he provides 3
reasons why we all should invest now. I don't disagree, but things are just a
little different in the Boise area.
Reason #1: Yes, distress properties
were a good source for investment opportunities, but the number of distress
properties has greatly reduced and with so little, we're seeing them priced at
market, not at the bargain prices before.
Reason #2: Financing terms and rates
are looking great and you can read past blog posts on how that may change this
year.
Reason #3: The rental market is
strong, but back to my conservative approach, don't bet on it always being
strong. Use historical rents and historical vacancy. If those numbers look
good, then you will be even more delighted in performance under the current market
conditions.
Tony A. Drost
http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  BOISE HOME AND RENT PRICES RISING, FEWER VACANCIES Ada
County Home Prices Continue to Rise:Last week I touched on the increase of single family home prices in the Boise area. Over the past week I have read dozens of articles discussing the single family sales market and the increase in values. Below I have posted some link to a few of these articles. The opinions vary, but all good to consider when evaluating and considering buyer, selling, renting, or even investing in single family rentals. On the rental social media side, we're seeing a lot of opinions that with the increase in values, we're going to continue to see a high demand to rent, even with these incredibly low interest rates. That increase in demand is raising rents across the board and lower income renters are feeling the pinch. Enjoy and feel free to share your thoughts as you read some of these.
First Rate Property Management's
Vacancy:
Below is a chart showing First Rate Property Management's vacancy. These numbers are based on nearly a thousand rentals in the Boise, Meridian, and Eagle areas. They also consist of small multi-family rentals, such as a duplex, four-plex, or small apartment complex, as well as hundreds of single family homes. With the low vacancy we are also increasing rents by over 10% on average. Our leases automatically include an 8% rent increase in them, upon the termination of the initial lease term. When the market was soft, we would offer a lower renewal rate, which made the owner and us look extra nice and made it more enticing to the tenant. But now with the market improving, First Rate Property Management is renewing at the 8% as the minimum.  Also, last week, I spoke about protecting our clients against a potential soft rental market that potentially could come about with so many multi-family properties coming on line and invited our readers to contact me. I was reluctant to post our strategy, since so many of our competitors are subscribers to our blog. But, because I received so many inquiries, I thought I would give a little hint to that strategy. It’s all about the lease term. We are offering longer rental terms and ensuring lease terms end in the time of the year when most tenants are looking. Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  STRONG RENTAL MARKET IN BOISE IDAHOAs you can see by our recent posts, our vacancy rate is outstanding in the 1% range and rents are improving. No question, the rental market is once again strong. The developers and builders took notice and are here to meet that demand. During the real estate bubble in 2005 and 2006, we saw an increase in construction, but in many ways, that increase was to meet the demand of the investors, not necessarily the renters. This time, I suppose it is meeting both. Last year I posted a list of multi-family dwellings planned to be built. Not counting 4 plexes, but a little over 500 units were built in 2012 with another 240 still under construction off of Eagle Road. For 2013, we have about 1,400 units in early construction phase or with plans to start soon and possibly another 1,400 units looking for a developer or approval. With so many rental units being introduced, what affect will this have on the rental market? I wish I could predict that, but there are quite a few variables. A few that come to mind are: 1) completion dates spread out, 2) unemployment and job growth, and 3) population growth. But also the home sales market is also another variable, such as any changes in interest rates and average sales price. So what does one do to take advantage of the current strong rental market and/or safeguard against a possible declined rental market? Well, I've got some ideas, so feel free to email me directly and I'd be happy to share them.
Single Family Rentals:
After the bubble burst, we saw more
and more houses becoming rentals. Many
of these homeowners were leaving the area and couldn't or weren't willing to
sell at the current market value, so they chose to rent the home out. Initially, we had a surplus of homes that
weren't selling, so those also became rentals. But, now with values improving, we're seeing a
lot of rented homes getting sold. Unless
these tenants buy a home, they will be part of the variable I listed above and
will help absorb the new rental inventory.With that said, the demand for rental homes is about as good as it was in the late 90's. Although values are improving, rents continue to improve as well and with the right house, performance can be decent. What's the right house? Above I mentioned how so many homeowners rented their homes when values were down. In most cases, that made a lot of sense and in these cases only, performance wasn't a real factor. It was more of a need to supplement a monthly mortgage payment while they waited for values to come back up. The right house tends to be a newer basic home (but not bare bones). Also to get the most for your money, they tend to be two-levels, as tenants also look for the most space for the least amount of money. And lastly, their main search criterion is bedroom count. And from there, they sort by price. So the home I just described, allows you to get the most house for the most rent. A custom home costs much more and typically the rent difference is not enough to get the most for your dollar. Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  INTEREST RATES TIED TO UNEMPLOYMENT
Jack Harty with Harty Capital, is a
commercial lender that I have used and he is pretty good at passing on
information that can effect lending. Below he describes that once unemployment
reaches 6.5%, we will likely see a rise in interest rates. Good news is that we
see that Ada County (Boise, Garden City, Eagle, Kuna, Meridian, and Star) is at
5.5% as of January of this year. Below is Jack's informal announcement along
with some graphs which I think is very informative.
 Unemployment isn’t bad in Ada County - 5.5% for January. February National Unemployment rate is down to 7.7% (per standard U3 measure), but the U6 measure of Unemployment is still high at 14.3% (includes those who work P/T but want to work F/T, plus those who've dropped out of the labor market). Thus, as more jobs are created (Feb job creation saw strong net new job creation of 236,000) more people will return to the labor market from their positions on the sidelines. They will then be counted as unemployed while they look for one of the 236,000 new jobs. That will have the affect of slowing the decline of the unemployment rate, or even increasing it, as occurred between December and January - 7.8% vs. 7.9% respectively.
So what?… the importance of the U3
Rate is that the Fed has declared that it will maintain "accommodative"
(read: low) interest rates until national unemployment stabilizes at 6.5% per
the U3 Unemployment Rate. It is hard to predict when national unemployment will
reach 6.5% due to the push/pull effect of people who've dropped out of the
labor market (see U6 Unemployment Rate) and then return to the labor market as
jobs are created. Those people will tend to dilute the unemployed pool,
probably retarding the rate of unemployment decline somewhat.
U3 UNEMPLOYMENT
RATE (ADA COUNTY - Jan 1 2013)
U6 UNEMPLOYMENT
RATE (NATIONAL - Feb. 2013)
 THE CHANGING REAL ESTATE MARKETEffective renewal efforts continue to keep First Rate Property Managements' vacancy rate low at 1.6%. Last year at this time the vacancy rate was 3.2%.  Strong Real Estate Market: The Blackstone Group L.P. is an American-based alternative asset management and financial services company that specializes in private equity, credit and marketable alternative investment strategies, as well as financial advisory services. Because of the strength in the housing market the Blackstone Group is investing heavily into single family homes. The following article from CNBC illiterates this. http://finance.yahoo.com/news/were-betting-big-real-estate-171222223.html
No More Easy Money:
From more documentation, minimum down payments rising, debt to income percentage lowering, to more federal scrutiny, easy
loans are definitely over. The following
article is found on the Hamptonroads website.
Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  DISPARATE IMPACT TO FAIR HOUSINGCurrently First Rate Property Managements vacancy rate is 1.2%. This is the 20th week in a row that we have had vacancy rates under 2%. 
Fair Housing:
Below is an article in
yesterday's Wall Street Journal which addresses changes to how the Fair Housing
Act perceives or determines if discrimination took place. It states that Landlords can be held guilty of
discrimination, even if there was no intent to discriminate or even if the
process is implemented in a non-discriminatory reason. This is concerning, because First Rate
Property Management has a very detailed and thorough screening process. This process is needed to guarantee payment of
rent each month, reduce chances of property damage, and to ensure the safety of
neighboring tenants in apartments. For
example, First Rate Property Management performs a thorough national criminal
background check on all applicants. This
article suggests that that standard can be questioned if that process limits
the number of tenants within any of the protected classes. First Rate Property Management also requires
some form of government issued ID to protect our owners from bad people who
make fake IDs assuming another person’s identify. First Rate Property Management also requires
all applicants to meet a certain income level in order to qualify. This too can be challenged. The article suggests that Landlords can
either remove legitimate screening criteria or use a double standard of
discrimination to make sure that an appropriate number of tenants are within
the protected classes.
 If you needed another reason to
hire a professional manager to protect the investor, this certainly adds to that list.
By ROGER CLEGG (Wall Street Journal)
Welcome
to the era of "disparate impact."
The Obama administration this month issued regulations
formally adopting the "disparate impact" approach to its enforcement
of the Fair Housing Act, the 1968 law designed to protect buyers and renters
from discrimination (racial and otherwise). This approach is increasingly
becoming standard in housing and every area of the law.
Landlords, businesses,
local governments and others can be held liable for policies that have
disproportionate racial effects—even if those policies make no racial
distinctions, are adopted with no discriminatory intent, and are applied in
nondiscriminatory ways.
Yet if the numbers come out
wrong, then none of the rest matters, unless a defendant can prove to the
satisfaction of a judge or jury that there is some high degree of
"necessity" for the policy or practice in question. Even then,
defendants can lose if a judge or jury is persuaded that some other procedure
would have been as good and wouldn't have resulted in those numbers.
The disparate-impact
standard for antidiscrimination law pushes people to do one or both of two
things: Get rid of legitimate selection criteria, or use a racial double
standard to ensure that the numbers come out right. This approach first became
infamous in a 1971 Supreme Court opinion as a way to strike down hiring and
promotion tests in employment. For example, the federal government and
civil-rights groups have challenged police and firefighter written exams for
having disparate racial impact, and physical exams for having a disparate
impact on women.
The Obama administration is
still doing plenty of that, but also much more. In 2010, the Equal Employment
Opportunity Commission sued Kaplan Higher Learning Corp. for running credit
checks on job applicants. Kaplan did so to cut down on employee theft of
student payments. The Obama administration objected because the checks had a
supposedly disparate impact on black applicants. I say "supposedly"
because Kaplan kept no racial data on its personnel. The government hired
"experts" to look at DMV photos and apply a "race rating."
Mercifully, a judge threw out the lawsuit last month.
The magic of disparate
impact can also mean that if a recipient of federal funding doesn't provide a
service—say, a driver's license exam—in a foreign language, it can be held
liable for national-origin discrimination.
The Obama administration is
challenging school-discipline policies around the country as having a disparate
impact on African-Americans—even though if discipline breaks down, the
classrooms that will suffer most are likely to be filled disproportionately
with other African-American students. The administration is also taking action
against employers—and soon possibly landlords—who use criminal background
checks before they hire or rent.
If a business, agency or
school has standards for hiring, promoting, admissions or offering a mortgage
that aren't being met by individuals in some racial and ethnic groups, there
are three things that can be done. First, the standards can be relaxed for
those groups. That is what racial preferences do. Second, the government can
attack the standards themselves. That is what the disparate-impact approach to
enforcement does. Third, one can examine why a disproportionate number of
individuals in some groups aren't meeting the standards—such as failing public
schools or being born out of wedlock—and do something about it. This option
holds little interest on the political left.
If the executive branch is out of control, then there are
the courts and Congress. The Supreme Court is considering whether to hear a
case challenging the disparate-impact approach in federal enforcement of the
Fair Housing Act. The court would have heard arguments in a similar case a year
ago, but the Obama administration pressured the City of St. Paul, Minn., into
dropping its anti-disparate-impact defense. ("We were afraid we might lose
disparate impact in the Supreme Court because there wasn't a regulation,"
said Sara Pratt, an official in the Department of Housing and Urban
Development.)
The court could strike down
disparate-impact enforcement—a possibility that Justice Antonin Scalia raised
during a 2009 case (Ricci v. DeStefano) involving firefighters in New Haven,
Conn. After all, the disparate-impact approach urges employers to weigh racial
results when hiring—the sort of thing the U.S. Constitution ordinarily forbids.
(In the New Haven case, city officials threw out an exam because "too
many" people of one color and "not enough" of another color did
well on it. The court ruled against the city.)
The Obama administration
has also used disparate-impact arguments to challenge voter-ID laws
aggressively, using Section 5 of the Voting Rights Act—arguments about the
constitutionality of which the Supreme Court will hear on Wednesday.
Congress needs to act, too.
First, it can refrain from passing laws adopting the disparate-impact approach.
Second, it can clarify that existing laws don't allow it. And where officials
and courts have interpreted statutes as allowing it, Congress should amend the
law to foreclose liability, at least if the defendant can show a lack of
discriminatory purpose in the challenged practice.
Disparate impact makes
illegal what any rational person would not define as discrimination. And by
forcing a change in neutral standards for hiring, renting and the like in order
to count outcomes by race, it actually causes discrimination.
Mr. Clegg is president and general counsel of the Center
for Equal Opportunity, which has filed amicus briefs in many cases challenging
disparate impact.
BOISE, A BETTER PLACE TO OWN A HOME
Below is a link to an article
from StateImpact, written by Molly Messick.
I was attending a Lead Based Paint class, when my phone lit up and I
saw, "Worst Place to Buy.....Boise", come across the screen. I will admit, I couldn't wait for a break and
had to read the article right away. I was happy to quickly realize that this
was a good thing.
The short article mentions that
the number of foreclosures fell by 27% from 2011 to 2012. If we look at
distress sales of 4 plexes in Ada and Canyon counties, the numbers are even
stronger. We saw a 49% drop in
distressed sales from 2011 to 2012. At
the end of 2010, 93% of these 4 plexes were distress sales. Now the good news, we are now below 10%. As a result, we have seen 4 plexes appreciate
very well over the last year. Anyway,
please take a look, it’s a short read.
http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  BOISE IDAHO RENTAL VACANCY RATE
First Rate Property Management's current vacancy rate is
1.6%. In the last 16 weeks we have averaged a vacancy rate of 1.53%.
2013 National Apartment Report:
The below link offers unique insights into the market
dynamics of several metropolitans across the country, and delves into
construction activity, rents, vacancy rates and investment trends.
Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  Market Update On Rents And Vacancy
Below are the
results of the SW Idaho Chapter of the National Association of Residential
Property Managers 4th quarter survey. It is important to know that NARPM members
typically manage single family homes and small multi-family dwellings. So this data does not include large apartment
complexes that usually have many amenities, such as pools, clubhouses, workout
facilities, computer center, etc.
Because of those amenities, those properties typically rent for much more.
VACANCY
RATES:
Below are a line
graph showing vacancy for single family home rentals and multi-family
rentals. As you can see, overall rental
vacancy was just about 3% at the end of 2012.
It was interesting to see that multi-family rental vacancy, over 4%, was
over twice that of single family homes, at about 2%. Why?
Well, for certain, the inventory or supply of multi-family dwelling is
quite a bit more than Single family home rentals. So that could be a factor. Another factor could be that demand for
single family rental homes has improved.
As we have mentioned in past posts, we are seeing well established
people choosing to rent instead of buying.
Lastly, single family home rental tenants tend to stay longer and being
winter, they are choosing to stay put for now.
AVERAGE
RENTS
The below graphs show average rents
for single family homes and multi-family rentals within *Ada and *Canyon
Counties. I think it is important to
understand that these are just averages from the sample. I would say that the data for single family
rental homes is probably a little more skewed.
For example, $1,400 per month for a 5 bedroom home in Meridian that is
only 1500 SqFt is probably a little high, but is very low for a 3,000 SqFt home
in Eagle, which might actually rent closer to $2,900. The same could be said for the multi-family
rentals, but I think the range is much tighter.
Nonetheless, all average rents dipped this last quarter, which has
historically been the case due to lower demand in the winter months.
 *All of the above data references Ada and/or Canyon Counties. Ada County includes Boise, Eagle, Garden City, Kuna, Meridian, and Star. I would assume that most of the data coming from Boise and Meridian. Canyon County includes: Caldwell, Nampa, Greenleaf, Melba, Middleton, Notus, Parma, and Wilder. I believe it is safe to assume that most, if not all of this data came from property managers in Nampa and Caldwell.
Tony A. Drosthttp://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  HOME SALES AND PRICES IMPROVING
First Rate Property Management's current vacancy rate is 1.0%, 2.5 times
lower than the previous year’s. This is due
to higher renewal rates and eliminating leases ending in winter months.
Home Prices Continue to Improve:
Below is a link to the FNC
Residential Price Index update for December of 2012. Within the article it
states that home values have continued to improve 8 straight months. Some of
the contributors were declining foreclosures and an increase in sales volume.
Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID BOISE, IDAHO REALESTATE AND RENTAL MARKETBoise Area Vacancy Rate First Rate Property Management: Currently our vacancy rate is 1.6% and for the year to date we are at 2.8%. We're on pace with last years’ vacancy rate numbers.  What's Really Driving the Rise in Home Prices: The Wall Street Journal recently cited five significant factors behind the rise in home prices, as numerous markets see significant year-over-year gains. The big price drives are: 2. The rise in household formation - which is expected to hit 1 million new households this year. That is up from an average of 570,000 over the last five years, according to data by Bank of America Merrill Lynch. 3. The rise in rents - which has prompted more investors to purchase properties to rent out and more renters to second-guess why they are paying so much in rent when they could buy. 4. The decline in distressed sales and foreclosures - which has fallen significantly this past year. While distressed sales are still high by historical standards, they have fallen from their peaks in most markets, helping to alleviate the downward pressure on home prices in many areas. 5. Inventories of homes for-sale are at their lowest levels in nearly 50 years - and builders have cut back on construction and many home owners are waiting to sell until they can recover some equity on their properties. Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc. Boise, ID  BOISE IDAHO PROPERTY MANAGEMENT VACANCY REPORTVacancy Rate for Rentals in the Boise ID Area: First Rate Property Management's current vacancy rate is 1.4%. Our phone and sales activity has slowed significantly with the holidays. Prospective tenants are thinking more about friends and family than a new place to live. Most people have secured a home by now and as the weather gets colder, they tend to hunker down. We suggest enticing these last few procrastinators by offering a rent incentive or lower rent for properties that are currently vacant.  Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID Idaho Real Estate Market Ranked #2 within US
Below is a link from Yahoo News forwarded by one of my clients. Within the
article, it is said that Idaho is the 2nd best real estate market to recover
with expectations to rise an additional 8.8% in 2013 making it the highest in
the nation. We have certainly seen some great improvements in many markets,
especially the 4 plex market. So I tend to believe this to be true. However,
one market, really hasn't recovered and that is of the larger high-end homes.
It seems that homes priced over $500,000, no matter how extravagant, continue to
struggle. Of course the higher the price, the more the struggle.
Tony A. Drost
http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  BOISE PROPERTY MANAGEMENT VACANCY REPORTFirst Rate Property Management's current vacancy rate is 1.1%, much lower compared to previous year’s numbers at this time. This is mostly due to higher renewal rates and efforts at reducing the number of leases ending in winter months. 
The
Southwest Idaho Chapter of the National Association of Residential Property
Managers (NARPM®) has released its vacancy data as of September 30th, 2012. Their comparable vacancy
numbers are similar to First Rates vacancy results for that time period. However,
compared to the Ada County results, First Rate's multi-unit rents were 2.5%
higher and single family home rents were 6.5% higher than the SW Chapters
average
NARPM's SW Idaho survey results are
in the following link:
http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID BOISE ID RENTAL COMPANY VACANCIES AT HISTORIC LOWFirst Rate Property Management's current vacancy rate is 3.1%, this is low compared to previous year’s numbers at this time. With the colder weather and the holidays coming, most tenants have secured a home. This is the time to start lowering rents or increasing rental incentives or we'll be sitting on some empty units until March of 2013.  Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  BOISE IDAHO BEST IN US REAL ESTATE RECOVERYFirst Rate Property Management's current vacancy rate is 2.4%, this is way down from previous year’s numbers at this time.  Boise Area Real Estate Market Best in Country: According to a national real estate research company, Boise and the surrounding communities real estate markets are improving better than anywhere else in the US. See link below http://www.idahostatesman.com/2012/09/18/2276470/boise-area-is-the-countrys-most.html Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  BOISE IDAHO RENTAL SCAMSFirst Rate Property Management's current vacancy rate is 3.7%, down from last years numbers at this time at 4.0%. Rental inquires are slowing down mainly due to school being in session and tenants mostly have secured housing.
Boise Targeted With Rental Scams:
We've posted about rental scams before, but since this story just ran on the local Boise news, I thought I would touch on it again. In most cases, these rental scammers find an on-line ad. They steal the photos and property description, but use their contact information instead of the Landlord's or rental agencies and then post on Craig's list. Why Craig's list? Well, because it is free. If Craig's list would just charge a low fee to post ads, I believe a majority, if not all of the scammers would stop and move on to some other scam. Also, we need tenants to know that no legitimate Landlord is going to ask you to wire funds. To protect our listings, we watermark all of our photos. Someone could doctor the photos to remove the watermark, but why go to that trouble when there are so many other listings without the watermark. Those are much easier pickings.
In most cases, the tenants get scammed and lose their money. However, we
receive calls where they see the scammer listing and our listing too and they
think we are the ones trying to pull a fast one. Fortunately, because of the
precautionary measures that we take to protect our listings from being easy
prey, we do not believe any of the properties managed by First Rate Property
Management have successfully been used to scam anyone.
The link below highlights one type of scam:
http://www.kivitv.com/news/local/169407066.html
Tony A. Drost http://www.frpmrentals.com/ http://www.boiseinvestmentproperties.net// First Rate Property Management, Inc Boise, ID  Ada County Values Improve as Distress Sales Decrease
In 2007 when the real estate bubble
came to an end, values declined. In most areas and for most types of building
types, the decline wasn't drastic. It was a slow decline. However, once the
distress sales (REOs and Short Sales) began to dominate the market values
declined more sharply. Different segments peaked at different times. For
example, Ada County 4 plexes peaked in January of 2010 when 100% of the sales
were from distress sales. On average, we ended up with 89% of all Ada County 4
Plex sales being a distress sale. This obviously affected values. In 2011 we
saw that average drop to 59%. Today, we're under 20%. This, along with low
inventories has improved values. I believe that we will continue to see these
the number of distress sales continue to decline back to a normal amount and
things should settle down.
The single family market is
certainly a different market. I don't track the data for single family homes to
the level of 4 plexes, but the numbers are also improving in most areas. Price
point is more of an issue with single family homes. Homes over $400K are still
suffering. Certainly the best buys for your dollar are those higher-end homes. It’s
amazing, you look at a home for $200,000 and you likely will find a 2,000
square foot home in nice condition but still a basic home. Triple that price
and you find a 4,500 square foot home sitting within a prestigious neighborhood
on a view lot, and upgrades fit for a king, but on the market for many months
with very little activity. In contrast, homes under $140,000 are really moving
fast. From where I am sitting, things are improving.
Tony A. Drost
 http://www.frpmrentals.com/ Rental Market across the Nation
I wanted to share some of the trends
seen across the nation. At renewal, most tenants are seeing an average rent
increase of 3.7%. Homes vacated and then re-rented are seeing an average rent
increase of about 6%. And lastly, the rental in the highest demand is a home
between 1,400 to 2,000 square feet.
Over the summer, First Rate Property
Management, rented most of their single family homes out before the
current tenants moved out. Rent increases for single family and small
multi-family rentals averaged about 12%, for those rentals that turned over
tenants. We saw an average of just over 6% in rent increases on renewals. First
Rate Property Management's leases have an 8% increase built in and an automatic
renewal clause. So for those who chose to auto renew, their rent increased by
8%. Then we have those tenants who contact us to renew, but state that they
will move out before paying 8% more. So the property investor is contacted and
generally an increase is negotiated, which is less than the 8%. Lastly, we do
have tenants that were already paying above market rent. A good example is
where the tenants went to a month-to-month rate for a period of time and then
decided to renew.
Some could read this and think that
allowing the tenant to vacate to get a 12% increase in rents is the far better
approach. In some cases, I would agree, but in most, I disagree. Let’s use an
average rent of $1,000 for easy math plus in many cases an over statement of
the differences. 6% difference between a renewal rate versus a new tenant is
$60 per month or $720/ year. If you have a good tenant, is $720 worth the risk
of the next tenant not being as good? All of the screening in the world cannot
assure that they will be everything we hope they would be. Also, you will have
turnover costs, advertising, utilities while vacant and lost rent. So, I think
the 6% increase is higher than the national average and in most cases, the much
better approach.
Vacancy report
Week 34 – 4.78% vacancy.
Tony A. Drost
http://www.frpmrentals.com/ |
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