First Rate Property Management Owner Updates

Demand High for Single Family Rentals in Boise ID

2012-02-09T13:56:00.000-08:00

Single Family Rentals:

As you know, I sell investment properties through Swope Investment Properties. I sell mostly multi-family properties because my clients' realize that the financial analysis is crucial. For the most part, investors purchasing single family homes don't think about the financial analysis and tend to seek out home sales specialists. Because single family home rentals are now in demand from both renters and investors, the market is heating up. And due to articles like, 6 mistakes-landlords make published in the WSJ, investors are understanding that they probably should identify someone who specializes in income properties and should have a full understanding of the potential rents and expenses and what kind of performance they can expect. So I am now working with many investors on purchasing homes. What I wanted the readers to know is that the market for homes under $150,000 is FAST. Just yesterday a great home listed for $110,000. By the time my buyers responded and approved making an offer, there were already 4 offers in and over list price. So the bidding war was on. For the most part, financial performance is not as good as something like a four plex, but I think these investors are looking at the low cost of entry (smaller down), great interest rates, great potential for appreciation due to the low prices, and for the most part, single family rentals are less trouble with higher quality tenants.

Duplexes, Triplexes, Four-plexes off the Bottom:

The following link takes you to a great post from Hennessey Appraisals where they provide some data showing values hit bottom and are correcting. I like the approach by comparing what a specific property sold for during the height of the market and then what it sold for years later in a declining market. On face value, some may state that his data doesn't support what I've been posting, so let me explain. Swope Investment Properties tracks duplex and four-plex sales in Ada and Canyon Counties. What we've been looking at is: Inventory (# of listings), pending deals, number of solds, calculated absorption levels, and percentage of distress sales (foreclosures and REOs). Hennessey Appraisals acknowledged that most of their second data points were from distress sales. From our data, I can tell you that we have gone from 97% of the solds being distress sales in June of 2010, to 34% in January of 2012. Our absorption rate has gone from a high of 52 months in August of 2008 to just 4 month's last month.

I've been stating that values are increasing. In August of 2010 I lost a deal because a four plex appraised for $190,000. In November of 2011, this same 4 plex appraised and sold for $225,000. What was the difference? With the low inventory levels, turn key properties are increasing in value. Older properties in poor condition seem to be a bit slower.

Click here to read the report from Hennessey Appraisals.

Refinancing and Appraisals:

Last month I posted some good news about refinancing becoming lot easier and many of my clients, to include myself have successfully refinanced at a much better rate. However, a good number of my clients were not able to due to a poor appraisal, none of which were from Hennessey Appraisals (just in case their reading too). Before all of the changes in the lending world, appraisers that specialized in income properties were used. Today, they go into a pool and I think the lowest bidder is selected. So the issues I am seeing is that distress sales with absolutely no adjustments are being used as comparables. I have represented a number of clients who have purchased distress sales and I would say the average cost to get them in rent ready condition has been about $22,000. Additionally, some are simply using comparables. They find a building with similar floor plans, similar finishes and pretty much compare cost/sq ft. By looking at the photos, anyone would say that the buildings were very comparable. However, if that appraiser would have dug in and calculated Net Operating Income, they would have found that one building had about $200 per month in additional expenses. Based on current cap rates and other metrics that I calculate per sale, that should have caused the other property to be worth about $34,000 more. That kind of discrepancy is unacceptable.

Tony A Drost

http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net//
First Rate Property Management, Inc
Boise, ID

Vacancy Report & Rental Analysis in Boise Idaho

2012-02-02T09:54:00.000-08:00

First Rate Property Management Vacancy:
Our vacancy rate for the first week of February 2012 is 3.5%. This is high compared to 2.9% last year. We recently acquired 15 new, empty units in the second week of January, that have skewed our data. Without these units our adjusted vacancy rate would be 2.4%, more in line with last years numbers.

The graph below depicts gathered data from 2009 to date.

Click image to enlarge

Strong Rental Market on TODAY Show:
Below is a link to a video from the TODAY show discussing the rental market. I wanted you to see it, because this is what tenants see and hear. I'm not sure if this is the same Landlord expert the TODAY show has had over the past few years, but I have disagreed with most of what they have reported. A lot of what they discuss in rentals seemed to be geared towards big city apartment living. In New York City where the smallest apartment costs thousands of dollars a month, I can see negotiating a kitchen remodel, but I can tell you that this simply is not the case in most of America. Regardless, the significant message is that the low vacancy and increase in the demand to rent is being noticed across the country. As I stated before, I expect 2012 to be a good year with some increase in rents.

http://video.today.msnbc.msn.com/today/46219482#null

Preventative Maintenance in Boise, Meridian ID Rentals:
As you know we have started our preventative maintenance inspections in our rentals. During these inspections we have found some alarming situations. One of which was a water heater that was on the verge of exploding. Imagine having a ticking time bomb in one of your units or even your own home. Luckily it was caught and replaced before any damage was done. We are finding mostly plumbing issues such as leaking faucets, tub spouts, garbage disposals, and leaks under sinks. The majority of the tenants are completely unaware of these issues. This confirms the need to have these inspections completed and repairs made to prevent further damage in your investment properties.

Corroded Water Heater found during Preventative Maintenance Inspections

Renters Insurance:
Over the years, we have had owners ask, "Does First Rate Property Management require tenants to have renter's insurance". The answer has been "No". The main reason is that we have found that most tenants look at that as another expense that is not needed and therefore, it is our belief that if we did require renter's insurance, tenants may choose to rent elsewhere. Also, we know of a few Boise property managers that do require renter's insurance and they state that tenants get the coverage and then shortly after moving in, they cancel it, without the property manager's knowledge. Additionally, some of these renter's insurance policies may only cover the tenant’s possessions and not the owner's damaged property. So when damages do occur, there is no coverage.
Because First Rate Property Management does have clients wanting to make it a requirement for tenants to have some form of Renter's Legal Liability coverage, we have been investigating a Renter's Legal Liability Policy, which allows us to add tenants who voluntarily enroll for a monthly fee of $14.95/month, which is paid for by the tenant. This is additional coverage at no cost to our owners, but certainly to their benefit. In fact, we are told that if you told your insurance agent that all of your tenants were enrolled in the program, you would likely be eligible for a discount on your own insurance. We encourage all of our owners to pose that question and let us know.
If after reading this, you find yourself thinking that you may want to make this mandatory for your property, we certainly can do it. But do remember that some tenants may choose to rent elsewhere because of the additional requirement and expense. It is my belief that such requirements, like renter's legal liability, will become more prevalent within the rental market. Below are some FAQ's. Your comments are always welcome.

What is Renters Legal Liability™?
Renters Legal Liability™ is a community based property damage liability program. The Renters Legal Liability program enables residents to acquire $100,000 of property damage liability protection. Renters Legal Liability is an innovative risk management tool designed to fulfill tenants’ contractual obligations specified in their lease agreement. As an FYI, First Rate Property Management's lease does obligate the tenant to cover any damages caused by their neglect as well as to indemnify us as the property manager and you as the property owner. However, in large losses, it is very uncommon to actually collect from the tenant. Having this policy, would enable us to actually collect.

What does it cover?
Renters Legal Liability™ provides protection for financial responsibility if a tenant originates and causes damages/losses to your rental property. The program covers five ‘perils’ for accidental resident ‐ generated loss. They are: fire, smoke, explosion, water discharge, and resident induced sewer backup . These five perils account for over 95% of resident ‐ generated losses. Coverage for a single occurrence is up to $100,000. Under the program, damages are paid in priority – to the property owner for damage to the building, to non ‐ responsible, impacted residents up to $10,000 for their damage/loss, if monies are available, and then to the resident responsible, up to $10,000 if other damages do not exceed the per ‐ occurrence limit.

How is ‘traditional renters insurance’ different?
The insurance commonly referred to as an HO ‐ 4 policy, or renter’s insurance, is coverage purchased by the resident, in his/her name. The policy typically covers the resident’s personal belongings, and liability coverage. HO ‐ 4 policies can be customized to cover various perils, or ‘risks’ and broadened to include damages that were not caused by the resident. For each level of coverage needed, insurers set rates. Total premiums depend upon coverage selections and the loss history of the resident.

Who is insured by the program?
First Rate Property Management is the insured with administrative control to add tenants who choose to enroll.

Is First Rate Property Management selling insurance?
No. First Rate Property Management is allowing tenants to participate under our community ‐ based program.

Why would a tenant want to have Renters Legal Liability™?
Residents who enroll have easily satisfied the lease requirement to indemnify the property owner and manager against property damage or loss that they are responsible for causing within the rental property, subject to a limit of $100,000. There is no additional application form to complete, nor quotes to obtain. Once enrolled, the resident can pay the small monthly cost with rent. No further notices are sent. There is no need to worry about keeping the program coverage in place.

Embezzlement, Boise Idaho Vacancy Rates & Our Readers

2012-01-12T12:22:00.000-08:00

When it Comes to Embezzlement, Property Management is Risky Business:

Attached is an article that ran in the Idaho Business Review earlier this week. For the most part, I agree with much of what is said. Is there an epidemic of embezzling going on; I don't think so. Is there a lot of "rob Peter to pay Paul"; I think so. I think licensing of property managers in Idaho would help, but I know licensing won't completely solve this issue. Most states do require licensing of their property managers and although theft of other people’s money still happens, it’s just happens a lot less frequent in those states that require licensing.

Why your money is safe with First Rate Property Management…

1. First Rate Property Management is one of three Certified Residential Management Companies in all of Idaho. The certification required policy and procedures, as well as an audit demonstrating how we assure our owner (Client) and tenant (Customer) funds are reconciled.
2. We utilize property management software that uses a double entry system.

a. Unlike Quick books, we can't just go in and edit bills, checks, and ledgers to make them do what we want. There is no delete or edit. We either do it right the first time, or have to go in and enter an offsetting charge. The system is not very flexible, which keeps us from doing some things that we'd like, but evidently it’s protecting us from ourselves.

b. Our system has security levels that deny employee access to areas outside of their department or to the general ledgers.

c. Monthly we perform a 3-way reconciliation of funds and balance to the penny.

   d. Annually, we hire a 3rd party person to perform a full audit of our books.
   e. Vendor invoices are verified, before a payables clerk processes them and our bookkeeper performs the final check before signing the checks.
   f. All bank reconciliations are done outside of our accounting department.
3. We require owner reserves so that we have the funds to pay bills between the time rents are received and proceeds are released to the owner.
4. First Rate Property Management's books are kept on a complete different set of books and software.

http://idahobusinessreview.com/2012/01/09/when-it-comes-to-embezzlement-property-management-is-a-risky-business/

Vacancy is down; NARPM 2011 rent and vacancy report:
Below are two graphs. One shows vacancies from 2006 to 2011 and the other shows average rents for that same time period. Although vacancies are way down, rents have remained relatively flat. One would expect that the rent amounts would be the inverse to the vacancy graph, meaning as vacancy decreases sharply, so would rent. Why is this? For one, I think that after almost a decade of the market being a tenant market, property managers have been slow or cautious to adjust. Additionally, with today's technology, researching and comparing rents can be done within minutes. As a management company, we subscribe to a number of services that go out and find these on-line listings, create an average and some upper and lower control limits so that we can maximize our rents, yet reduce our chances of the property sitting for a month to get that absolute highest rent. Tenants basically do the same thing, but they look at the lowest rent and don't necessarily make adjustments for improvements and other factors that may make one property higher rent than another. I guess you could call it "PRICELINE" for rentals, but just not quite a formal. It’s too bad Boise property managers don't use the MLS as it certainly could help other property managers in analyzing comps and determine a more fair market rent to ask. And lastly, I believe that the supply of rentals has been slowly increasing to keep up with that demand, therefore not allowing that sharp increase in rents one would expect with such low vacancies. Nonetheless, I do however still believe that we will see slight rent increases in 2012.

Click to enlarge images

Our Reader Base:

Initially, our blog was just an easy way to convert First Rate Property Management's monthly newsletters into an electronic format. Over the years, our blog has become a resource to many. Our current subscribers consist of: mortgage lenders, insurance agents, would-be investors in the area, other property managers within the Boise area and as far away as New Jersey, local and out-of-state Realtors, vendors, friends of clients, and even a couple tenants have subscribed to the feeds. Although no one ever posts comments within the blog, the FRPM staff and I receive emails all the time regarding our posts, the feedback and recommendations are always great. So I encourage you to continue to forward these blog entries to others. If they are looking to invest, these certainly can help them understand the market or maybe just a topic here and there will be of benefit.

Tony A Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net//
First Rate Property Management, Inc
Boise, ID

Vacancies and Evictions in Boise Idaho

2012-01-04T11:00:00.000-08:00

First Rate Property Management Vacancy:
Our vacancy rate for the first week of 2012 is 1.2%, compared to 2.4% last year at this time. The average vacancy rate in 2011 was 2.7%, compared to 3.7% in 2010.

Click image to enlarge

Evictions:
First Rate Property Management recently took over a new property. Within 30-days, we had to file 3 evictions. Including these 3 evictions, FRPM only evicted 8 tenants all year long, which equates to less than one tenth of one percent. In comparison, that is very good. So I wanted to explain a bit why I believe our eviction rate is so low and why we had 3 in one month for a new property.

Tenant screening:
Tenant screening is imperative, by examining past payment history, credit, criminal background, eviction history, income, employment verification, and so on, a landlord can quickly screen out those who have a higher chance of not paying. Collecting an application and reading what is entered is not adequate. Bad tenants lie, they have friends pose as their current landlord or employer. They fudge their income. They do what they can to beat the system. That is why we use a 3rd party screening company that digs in and verifies everything.

It is not always the case, but more often than not, those property managers who boast low vacancy rates and higher than market rents, are probably not screening as well as they should. Perhaps the lower screening criterion has worked out and appears to be worth the risk. I've just done this too long and seen too many slip through the cracks to be willing to take that risk for our clients or us as the property manager.

Procedures:
Immediately after tenant becomes past due, First Rate Property Management is texting, emailing, and mailing Past Due Rent Notices. For those who fail to communicate, we are delivering 3-Day Notices to Vacate at the property. After 3 business days, we go to the property and inspect. If payment hasn't been received, we then contact the owner and discuss options. Regardless of the decisions made, FRPM is aggressive on the collection of rent. I am confident that many tenants who were short on money were prepared to short the Landlord, but because we constantly hounded them at home and work, as well as on their computer and phone, they decided to pay us first, just to get us off their back.

So why the three evictions on the new property? I believe screening is one reason. The other was inconsistent procedures from previous management. Many landlords are short sighted and believe that working with everyone makes for a happy relationship. OK, I can see merit in this, but with limits, structure, and consistency. So basically, with any new property and its tenants, we have to train them in how to be good tenants. Pay your rent when it is due and if not, we are going to harass you until you do or we evict you. If you fail to communicate and ignore our requests, you will surely be given an eviction notice and might as well leave, because the cost of eviction are high enough that it doesn't make sense to stop the process once it is started. Let me tell you, after evicting tenants in November, the remaining tenants did a lot better job paying rent in December. I suspect that rent collection will improve as time goes by.

Tony A Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net//
First Rate Property Management, Inc
Boise, ID

Renting in Boise, Idaho

2011-12-21T08:48:00.000-08:00

Happy HolidaysTo all our valued clients and customers Happy Hoildays and a wonderful upcoming New Year from the staff at First Rate Property Management!

Our Holiday schedule is as follows:
We will be closed the weekends of the 24^th - 25^th and the 31^st – 1^st of January. We will be open Monday through Friday with normal business hours.

More Multi-Family Properties Being Built

Last week I attended a Planning and Zoning Committee concerning the building of more four plexes in Meridian. In my discussion with all of those involved in this project, I learned of many more four plexes and apartments to come in the near future. And, I was surprised to learn of some apartments that were built in Meridian with more to come. So the word is definitely out that there is a demand to rent. Some of the benefits is that these builders are finishing incomplete complexes. That helps with association dues and really improves the overall appearance of the complexes. It’s also good in that these new buildings are providing some inventory to meet the demand to buy turn-key properties. These newer buildings are also selling for more, which should help improve values of residential income properties.
The potential downside is that the new construction increases the supply of rentals, which may soften the expected rent increases and reduced vacancies that we were predicting in 2012. Also, if priced similarly, or not much higher, tenants may prefer to rent something newer. Granite countertops, tile flooring, new appliances, and tile back splashes provide a lot of appeal, and if the rent isn't much more, I suspect many renters will be willing to make the move.

Is Renting Becoming more Glamorous?

Below is a recent online newsletter from the National Apartments Association sent to me by several clients. There are a lot of interesting articles. One that I found interesting, was Recent Study Shows Renting Is Getting Glamorous where the Center for Behavioral Economics at the Federal Reserve of Boston showed that fewer young people think home ownership is preferable to renting. The study showed that a cultural shift is the reason young professionals are embracing renting in a destination-living community with multiple amenities. First Rate Property Management has some tenants with high income and great credit choosing to rent. However, we are still seeing many leaving the rental market to buy homes. My guess is that this is more prevalent in areas where housing is much more expensive than what we see here in the Boise area. However, this trend very well may increase in years to come.

Tony A Drost
http://www.frpmrentals.com/

http://www.boiseinvestmentproperties.net//

First Rate Property Management, Inc
Boise, ID

Freddie and Fannie Make Refinancing a Little Easier

2011-12-15T10:26:00.000-08:00

Freddie and Fannie RefinancingMany of First Rate Property Management’s clients have seen the interest rates drop, but unable to refinance due to the decrease in value causing the loan-to-value (LTV) to be too great. Freddie and Fannie have made it a bit simpler for some of us. The first thing to do is call the company you make your payments to and ask if the loan is or since been purchased by Freddie or Fannie. If so, you may be eligible to refinance based on some of the below:

· 125 percent LTV ceiling for fixed-rate mortgages

· Loan must have been purchased by Fannie/Freddie on or before May 31^st 2009

· 45% Debt-to Income max (no exceptions)

· Requires an automated approval

Current rates ranging from 4% to 4.875%

Additionally, I’m told that Fannie and Freddie are updating their underwriting systems and creating an automated value model that is due out around March of 2012. Although we don’t know if the rates will be as advantageous as they are currently, the new system should make it a bit easier with fewer fees to refinance. Below are some of the highlights:

· Removing the current 125 percent LTV ceiling for fixed-rate mortgages

· Their new automated value model eliminates the need for an appraisal

· Extending the end date for Home Affordable Refinance Program until Dec. 31, 2013 for loans originally sold to FNMA/FHLMC on or before May 31, 2009. The date by which the loan had to be owned by FNMA/FHLMC has NOT been extended.

· Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers

· Need an automated approval

For more information, I have attached the below link:

http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx

If you have questions or would like a referral to a lender who can help, please feel free to let me know.

Tony A Drost
http://www.frpmrentals.com/

http://www.boiseinvestmentproperties.net//

First Rate Property Management, Inc
Boise, ID

2011-12-02T11:19:00.000-08:00

Current Vacancy:
FRPM’s current vacancy is 1.1% and below is a graph showing the trend. It's winter, but the weather has been relatively nice so the rental inquiries haven’t come to the complete stand still that we've seen in the past.

Click to enlarge image

End of the Year Statements and Tax Reporting:

First Rate Property Management will send out the 1099’s and End-of-Year Statements at the end of January. However, for any owner that received funds from HUD, Section 8, or the Housing Authority, we will first wait to received the 1099 reporting from that agency to double check for accuracy and then mail those out immediately afterwards. Your 1099 and End-of-Year Statement will also be uploaded onto your online statements for future reference.

For those in partnerships, the K-1’s can’t be completed until the EOY statements and 1099’s are completed. So look for your K-1’s to be sent out near the end of February.

Idaho Incomes are 3^rd Lowest in Nation:
It’s not uncommon for an out-of-state investor to look at Boise rents and state, “Rents are low”. Rents do appear low in comparison to a lot of cities across the nation, but perhaps not as low as one would expect in comparison to income. Below is a link to an article stating that Idaho income levels are currently third lowest within the nation. First Rate Property Management manages in the Boise, Meridian, and Eagle areas, all of which fall in Ada County. I can tell you that the income of our applicants for our multi-family rentals, like duplexes, four-plexes, and apartments is far less than the average income stated in this article. In fact, their income averages are probably half as much.

http://boiseguardian.com/Income

Boise Property Manager Files Bankruptcy after Fair Housing Complaint:
A fellow colleague recently filed bankruptcy, after receiving several fair housing complaints, due to the legal costs and the amount of compensation wanted by the complainant. I obviously don’t know all of the specifics and I only know one side of the story. My sole purpose is to describe an incident and the arguments for and against the complaint. The message here is that fair Housing is a serious issue and can put a Landlord out of business.

The complaint was generated by a local Fair Housing Advocate, not from a tenant. This advocate found discriminatory language in their lease, such as requiring adult supervision for children under a specific age and that support/companion animals require inoculations and proper licensing. Most reading this are going to think that sounds very reasonable and perhaps even prudent. Where the intent may be reasonable it’s the wording used to express it that causes issue. This property manager’s attorney reviewed his lease and approved it and even after the complaint, the attorney found no issue with the wording. Property managers and owners have come to me with this case and their concern is that this property manager is going out of business and no actual tenant was harmed or discriminated against. I would assume that the complainant’s position is that this wording is discriminatory and possibly caused would-be applicants to not apply.

Owner’s question decisions First Rate Property Management make all the time regarding Fair Housing Issues. Most concerns are those regarding Reasonable Accommodations and Modifications. A typical Reasonable Accommodation is for a support or companion animal. Owner’s who don’t want pets in their rentals have a hard time understanding that a support or companion animal is not considered a pet. We cannot unreasonably deny this request, nor can we charge more rent or collect a deposit. Most owners’ arguments are that pets cause increase wear and tear and often times, damage to the property. I do not dispute that. But it’s the law. Next owners want to know what is wrong with the tenant that makes them need a support or companion animal. Again, the law prohibits us from asking that question.

A more recent common accommodation or modification request is coming from felons who claim to have committed the crime that they were convicted of while under the influence of drugs or alcohol. Recovered drug addicts and alcoholics have some protection under Fair Housing. Should a recovered drug or alcoholic request an accommodation or modification of a Landlord’s written rental policies that deny felons, the landlord can not unreasonably deny their request. This decision and what makes it unreasonable is complicated. Landlords faced with such a decision better know the laws or know who to consult with to be sure they comply. As the story above clearly shows, an inadvertent and what may appear to be a very minor issue can cost you. That’s why First Rate Property Management employees attend Fair Housing classes taught in the area. We find that HUD and the advocacy groups’ position on certain issues are not all the same. So we want to know all of them and take the conservative approach in order to reduce the risk to our owners and of course our selves.

http://boiseguardian.com/Income

Tony A Drost
http://www.frpmrentals.com/

http://www.boiseinvestmentproperties.net//

First Rate Property Management, Inc
Boise, ID

Boise Area Vacancy Rate

2011-11-25T13:37:00.000-08:00

Boise Area Rental Vacancy Rate:
Currently, First Rate Property Management Inc. has an historic low of 1.1% overall vacancy rate. Compared to last year at this time of 2.7% and in 2009 at 7.3%. This low vacancy rate is mainly the result of policy as explained in the last blog. The weather is milder now then the last two years which may also be contributing to the overall vacancy numbers.

Real Estate Investment Considerations:
The following link was in the Wall Street Journal on the 12-13th of November, 2011 offering a realistic view point of considerations most first-time investors do not think about.

http://online.wsj.com/article/

Tony A Drost
http://www.frpmrentals.com/

http://www.boiseinvestmentproperties.net//

First Rate Property Management, Inc
Boise, ID

Boise, Idaho Rental Vacancy Rates

2011-11-02T11:53:00.000-07:00

Boise Area Rental Vacancy Rate:Currently, First Rate Property Management Inc. has a 2.8% overall vacancy rate. Compared to last year at this time of 3.9% and in 2009 at 6.5%. This low vacancy rate is the result of policy. First Rate Property Management does not have leases expire in the months of November, December, or January. The only reason we have notices in these months is because the tenants lease had expired before those months and wanted to remain month-to-month. When faced with a situation like that, we have to decide: Do we require the tenant to extend through the winter months and if the tenant refuses do we give them notice to vacate so that they can be replaced with a long-term tenant. Or, do we allow them to revert to month-to-month at a bit higher rent and hope they don’t choose to vacate in the winter months. The concern always is that when you force a tenant renew or vacate and they choose to vacate, the owner will have lost rent, advertising costs, and turnover costs. Which is better? So by default, we allow the tenant to go month-to-month unless the owner requests us to force the long-term lease renewal.

Wealthy Investors Target Large Multi-Family Complexes:
Below is a link to an article published on the online Idaho Business Review, stating that deep-pocket investors are seeking large apartment complexes over single family homes, duplexes and four-plexes. I don’t necessarily agree. The fact is, that with the decline in values of single family homes, duplexes, and four-plexes, they are performing very well. In many cases a four-plex will perform better than a large apartment complex. It simply depends on price and effective rents. Plus, a four-plex down the road is most likely going to be easier to sell. What I have seen is that investors have gone to apartment complexes because there are so few four-plexes available right now. There are definitely many buyers out there wanting to take advantage of the low prices and interest rates and in most cases, the return is greater than anywhere else they can put the money. With that said, I have seen more investors purchasing rental properties using their IRA funds in recent months.

http://idahobusinessreview.com/deeppocketinvestors

Tony A Drost
http://www.frpmrentals.com/

http://www.boiseinvestmentproperties.net//

First Rate Property Management, Inc
Boise, ID

Boise Idaho Vacancy Rates

2011-10-26T11:08:00.000-07:00

Boise Area Rental Vacancy Rate:
Currently, First Rate Property Management Inc. has a 2.9% overall vacancy rate. Below is a graph showing the vacancy rate survey results from the SW Idaho Chapter of the National Association of Residential Property Managers. This graph shows average rents by type as well as average vacancy rates. It is important to note that the 3rd quarter survey results are as of September. It was near the end of September that all Boise area property managers saw a dramatic change in the market conditions. In October we saw rents drop and incentives coming into play. I believe that most companies, like First Rate Property Management, are being pro-active as we know that come winter, it becomes much more difficult to rent properties, specifically single family homes. Multi-family units such as plexes and apartments are more difficult, but certainly those with 3 bedrooms and more are the hardest as those tend to appeal to families and most families do their moving during the summer break from school.

Click to enlarge image

Boise, Idaho Economic Indicator - Micron's R & D Expansion:
In the Oct 14 Idaho Business Review, Micron is planning to complete, in early 2012, a $50,000 R&D expansion in their Boise Fab 4 plant. Micron said that this will result in "hundreds of jobs." This is good news because of the job growth, the jobs will tend to be higher paying since they are R&D jobs, they are R&D jobs which probably won't be eventually outsourced as manufacturing jobs could be, and it supports Micron's continued commitment to Boise.

Sharp Rise in Foreclosures:
This msnbc article mentions a new spike in home foreclosures.

http://www.msnbc.msn.com/id/44885991/ns/business-real_estate/#.TpcBf3JVWSo

Rental Market Benefiting from Foreclosures:
The prweb and upi articles below both address how little negative credit has affected home-owners looking for rental property to live in. This is proving to be good for the rental market.

http://www.prweb.com/releases/2011/10/prweb8885841.htm

http://www.upi.com/LandlordsWelcomeStrategicDefaultersLikeTonyDrost

Tony A. Drost
http://www.frpmrentals.com/

http://www.boiseinvestmentproperties.net//

Mortgage Intrest Rates & Home Prices Fall

2011-10-07T11:37:00.000-07:00

Mortgage Interest Rates & Home Prices Fall:In the below referenced on-line Wall Street Journal article, the average 30-year mortgage dropped to 3.94%, while home prices continue to fall, according to Freddie Mac’s weekly rate survey recently released. According to this article home buyers on the fence are waiting for prices to stabilize and not worrying so much about low interest rates.
Nationally, this may be correct. Also, I believe the data is skewed, because many of the homes being sold were foreclosed upon or are a short sale. These properties are selling for much less and pulling the averages down. It is very common for these distress-sold properties to be in very poor condition, which lowers the sales price. Also, another factor in skewing the averages are the re-sale of the large homes. When you sell a home that was once worth $1,000,000 for $425,000, that difference has a huge impact on the average calculations, especially when the average Boise home price is $140,000. Rates are outstanding, prices are outstanding, and I think it is a good time to buy.

http://blogs.wsj.commortgage-rates-fall

Tony A Drost
http://www.frpmrentals.com/

http://www.boiseinvestmentproperties.net//

First Rate Property Management, Inc
Boise, ID

Boise, Idaho Rental Vacancy Rate & Investments

2011-10-05T11:42:00.000-07:00

Boise Rental Vacancy Rate
Below is a graph that shows First Rate Property Management’s vacancy numbers, which include rentals in the Boise, Meridian, and Eagle areas. These numbers include all properties within our portfolio, which include single family homes, duplexes, four plexes, condos, and small apartment buildings. What I found interesting is that in 2010 vacancy spiked in October and this year that spike occurred in September. Based on the chatter I’m seeing on the property manager forums and the calls I’m getting, all local property managers are scratching their head wondering why the sudden change in the market. If you go back to my posts throughout the summer, things were moving along real well. Today, the number of inquiries has drastically slowed down. I’m not sure why, but I can only assume that most renters settled in prior to the start of the new school year.
Click image to enlarge

Boise Rental Vacancy By Building Type
In the spring, we saw a tremendous increase in demand for single-family homes. Today, these units have the highest vacancy rate. Currently we have a 6.4% vacancy on all of our single-family homes which is over double our average vacancy of 2.9%. Again, I believe this is directly related to the fact that the demand for these homes are from families with children and most did their moving in the summer. Our two bedroom properties are doing the best with a low vacancy of 1.85%. Our Studios and one bedroom apartments are at 5.33%.

Boise Rental Vacancy By Area
As normal, the Boise Bench vacancies continue to be much higher than the other areas. We have reduced our multi-family inventory in Eagle so those numbers are looking good. Our homes in Eagle are doing well as they have always done well in Eagle. As I have stated before, multi-family buildings in Eagle don’t perform as well, simply because Eagle is more of a bedroom community with very little employment and no upper level schooling. Eagle rental homes are in good demand, simply because the Eagle area is a desirable place to live. However, we for the first time in a long time, we have a spike in East Boise. The data is skewed, because we have some single family homes in that area and as explained above, that market has softened up. Also, any properties near BSU that didn’t follow our recommendations on having leases go through the school year, are now dealing with a vacancy between semesters and students have already chosen their housing.

Boise Rental Investment Sales Market

As I have described, there is a shortage of inventory, which has increased values. However interest rates dropped again on Monday, so performance still remains very good even though the buyer may pay more for the property. I think this creates a win-win scenario. Sellers who have been waiting for values to improve before selling can now get that higher price. Buyers wanting to take advantage of this market still can purchase a great performing property, even though prices are now a little bit higher. Short sales and REO numbers are down on multi-family buildings, but just last night another 4-plex was listed as a short sale at a price well below market. It surely will receive multiple offers and I imagine the actual sales price will be a good 5-10% higher than list price. This confirms that demand is up and supply is low.

Tony A. Drost
http://www.frpmrentals.com/

http://www.boiseinvestmentproperties.net//

Boise Area Rentals Slowing Down

2011-09-21T11:05:00.000-07:00

Boise Area Single Family Home Rentals Slowing Down:
Now that school is in, rent-ups on all properties, but especially single family homes are slowing way down. Our call volume is down and showings are also faltering. Now is the time to increase incentives and/or lower rents so these homes do not sit unrented over the winter.

Boise Ranked Amongst the "Best Places To Retire"
This article places Boise, Idaho along with the best places to retire in the U.S. comparing home prices, cost of living and population over 50 years old...
http://finance.yahoo.com/retirement/article/113504/best-places-retire-2011-cnnmoney

Mistakes New Investors Make:
Below is a link in the internet version of the Wall Street Journal regarding new investment property owner pitfalls.
http://online.wsj.com/article/SB10001424053111904103404576558484074477822.html

Choices, Risks Ahead If Feds Rent Out Foreclosures:
Below is a link on investors.com regarding the huge glut of foreclosed homes stuck on the books of mortgage-backers Fannie Mae (FNMA) and Freddie Mac (FMCC). They see renting as one way to do it, and maybe stabilize neighborhoods and home values.
http://www.investors.com/NewsAndAnalysis/ArticleChoices.aspx

First Rate Property Managements Greater Boise, Idaho Vacancy Rate:
Currently our vacancy rate is at 3.6%, down from last years' vacancy rate of 3.9%.

Click to enlarge Vacancy Rate image

Tony A. Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net//

Real Estate Prices Heating Up in Boise

2011-08-31T12:49:00.000-07:00

Home Prices Up 12% in Ada County:
According to the latest data from the Intermountain MLS, median home prices had a strong rise of 12% compared to downward forecasts. Please click on the link below to read more.
http://frontstreetbrokers.com/general/mikes-real-estate-minute-%E2%80%93-year-to-date-home-prices-up-12-in-ada-county/

First Rate Property Managements Greater Boise Idaho Vacancy Rate:
Currently our vacancy rate is at 4.4%, up from last years' numbers at this time at 3.2%. Yet, our average vacancy rate to date this year is 2.8%, compared to 4% last year at this time. With school starting, the rental market is temporarily changing, slowing down. Call volume is down compared to a few weeks ago.

Click to enlarge Vacancy Rate image

Boise Investment Properties:
The number of short sales and Bank owned investment properties has slowly been declining. In fact, the number of active listings has been declining as well. This shortage of listings and a fair amount of demand has pushed values up in most areas and building type. So if you were looking to list, but discouraged because of low values, now might be the time to take another look at current market value.
If you are looking to buy, good deals still can be found as not all agents are tracking the trends and realize that a supply shortage has caused values to increase in some segments. With rates as good as they are and with values still down, it’s a great time to buy.
In August I sold two four plexes, a tri-plex, and two duplexes, a single family home rental, and a standard single family home. So as you can see, things are heating up.

Tony A. Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net//

Boise Idaho Top Ten Cities to Live In

2011-08-10T13:47:00.000-07:00

Boise Ranked in Top Ten:
According to the Wall Street Journals' Digital Network, the organization called Relocation America has ranked Boise, Idaho as a top ten city to live in the United States. Please click on the link below to read more.

http://www.relobook.com/?p=111

First Rate Property Managements Vacancy Rate:

Currently we are at 3.2%, down from last years' numbers at this time which was at 4.0%. Our average vacancy rate to date this year is 2.8%, compared to over 4% last year. Of the 59 properties we currently have on the Rental Board (available properties list), over 30 of them have approved applications or leases pending. We are very busy signing rental leases!
Click to enlarge image.

Tony A. Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net//

Boise Idaho Vacancy Rate

2011-07-28T13:33:00.000-07:00

Vacancy Rates in Boise, ID:
First Rate Property Management Inc. (FRPM) reported overall vacancy at 2.7% this week. This compares to 4.2% last year at this time and 5.9% in 2009. The low overall vacancy rate for First Rate Property Management is comparable to the overall numbers reported by Boise proptey managers. See link below:
http://www.boiserentalvacancyrates

What's Good for Rentals & Not so Good for Home Ownership:
Below is an article regarding housing market conditions according to the latest Housing Market Insights report from Morgan Stanley:
Political deadlocks mixed with terrible housing market conditions will eventually turn America into a society of renters. High rates of mortgage delinquency, foreclosures and liquidations are turning homeowners into renters, analysts at the investment banking giant said, lowering homeownership rates and increasing demand for rentals. And it appears even federal institutions are giving up on implicitly supporting what used to be the cornerstone of the ideal American life.
In the Treasury Department white paper on reforming the government-sponsored enterprises, a suggested change to housing policy was put forward: "The administration believes that we must continue to take the necessary steps to ensure that Americans have access to an adequate range of affordable housing options. This does not mean our goal is for all Americans to be homeowners."

Tony A. Drost
http://www.frpmrentals.com/

http://www.boiseinvestmentproperties.net//

Property Management Search Engine Optimization

2011-07-13T16:15:00.000-07:00

Vacancy Rate in Boise, ID:
First Rate Property Management Inc. (FRPM) has reported our overall vacancy at 3.0% this week. This compares to 4.4% last year at this time and 6.5% in 2009. The office phone call volume is "crazy busy", the highest it's been in nearly a year.

First Rate Property Management Search Engine Optimization:
Since Google has purchased YouTube, they're making YouTube videos relevant in web searches. Therefore we are now posting our listing videos to YouTube. Also, GOOGLE is transcribing the words and using them for searches, so we are using generic key words in the first 30 seconds of the video in order to optimize our search engine results. For example, we are stating the areas we manage, which are Boise, Meridian, and Eagle. Additionally, we want to be sure to use key words like rent, lease, rental, and property management. This optimization keeps First Rate Property Management a leader in web searchers for property managers in the Boise Idaho area.

Vacancy Rate in Boise Idaho

2011-06-30T16:57:00.000-07:00

Vacancy Rate in Boise, ID:
First Rate Property Management Inc. (FRPM) reported overall vacancy at 3.1% this week. This compares to 4.2% last year at this time. Below is our Vacancy Chart comparing 2010 to 2011.

(Click to enlarge image)

New Utility Changes:
Seattle utilities are making a billing change- water, sewer and trash will now remain in the property owners name instead of changing it every turnover to the tenant's name. Sometimes these types of changes end up affecting us here, particularly if they are successful. This change means that owners of single-family rental housing, or property managers, will need to determine a new way of charging tenants for utility costs, whether it's through rent increases or passing bills down to tenants. To date, Boise Property Managers are still able to place the new tenants name on those utilities. The link below is the article in whole.

http://campaignSeattleUtilities

Tony A. Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net/

Website and Marketing Updates

2011-06-15T11:21:00.000-07:00

New Website
We wanted to inform First Rate Property Management’s clients that we have made a website change. The new website looks like the old site, but the back-end functionality is far greater. Like any technology change, we hope that there are no problems, but with over 60 pages, 20 plus URLS, and hundreds of links, there is a possibility that something could go wrong. If you have any problems or see anything that needs fixed, please let us know.

Username/Password
You’ll need to create a username and password. Unlike the previous site, you now can modify your account to allow others to access your account as well. So if you have a partnership or family members, you can give them access without giving them your own user name and password.

Text Messaging
FRPM has been utilizing text messaging, but the new system tracks the leads better. Each listing will have our sign on it which will include a 24/7 hotline as well as a text message service. They can text and immediately get a response as to the rent amount, deposit amount, if the property takes pets or not, and other summary information about the property. On our end, we get a notification and the number they called from so that we can follow up. Unlike anything else, tenants want information immediately so both services will be provided. These added services are free to our clients and paid for by FRPM.

QR Codes
Another really cool tool is that the new system will create QR codes like the one in the link below. Once the system is live, we will add QR codes to all flyers and signs. This will direct perspective tenants with smart phones to access the website listing for that property immediately. This gives them the opportunity to view full descriptions, photos, virtual tours, YouTube videos, and gives them the ability to apply online. Currently a majority of our applications are online.

Scannable QR code for http://frpmrentals.com/

(Click Image to enlarge)

Videos/Listing Feeds/Mobile Website
The new site and system allows us to post YouTube videos of each property. This improves our search engine optimization as well as gives a video tour of the home. The new site will continue to feed over 200 other internet listings services to include Craig’s list.

Our current site is viewable from your mobile phone, but soon, anyone searching www.FRPMrentals.com from a mobile device will be directed to a site specifically designed to function on mobile devices, such as a phone. Also soon to follow is an iPhone and Android app that can be downloaded on these mobile devices and assist a perspective tenant looking for a rental, as well as assist current tenants in paying their rent or submitting a maintenance request.
To preview the new site, please visit http://www.boise-rentals.com/

Thank you. We hope that the implementation of this improved technology and service does not inconvenience you.

Tony A. Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net/

Boise Real Estate Market

2011-05-11T12:21:00.000-07:00

Boise Real Estate Market:
There is a ton of activity. We are still seeing foreclosures and short-sales at incredible prices, but these properties are also seeing multiple offers and the sales price ends up being quite a bit over list. By seeing the activity levels and bumped up prices, I’m thinking Boise has hit bottom and values are starting to improve. As usual, the very distressed properties in very poor condition are not commanding as much interest or price.
As an example, I’m representing a buyer who locked their interest rate at 4.375% for a 3100 square foot home in Meridian with a purchase price of $265,500. That property had a list price of $242,000, so you can see the affect of high demand in multiple offer situations.

Boise Rental Market:
Single family homes continue to be very strong. FRPM’s current vacancy is at 2.75%, which is better then what it was this same time last year. However, the school year for K-12 ends in May and as a result, we have 4.7% of our total inventory on notice to vacate at the end of May.
I recently read an article written by the Harvard Joint Center for Housing Studies where they indicated concerns that the cost of housing is making it financially difficult for today’s renters. They stated that 1 out of 4 renters spend over 50% of their gross income on housing costs. An additional 26% spend between 30-50 percent of their total income on housing, which is leaving less for necessities such as food and healthcare. Therefore very few renters are able to put much if any money into savings. Additionally, the rising costs of utilities and the recession has increased the need for subsidized housing.

Marketing Your Rental:
In 1998, FRPM launched its first website and that was our first exposure getting leads via the internet. In 2003, we saw the birth of Internet Listing Sites. These were sites that had mastered the search engines algorithms and had top search results for internet searches for rentals. It was about this time that First Rate Property Management reduced the number of print ads and relied more on the internet. Back then, a 3-4 line ad in the classifieds would cost up to $350 per month per listing. So when we reduced our classified ads and focused more on the internet, our clients advertising costs reduced.
Over the years more and more internet listing sites charge a listing fee. Depending on the key words used in the search for a rental, one site would produce better results than another. Currently, FRPM feeds its listings from its two websites, , http://www.boise-rentals.com/ and http://www.boise-rentals.com/ to over 200 sites. However, only 5 of those were sites that charge a monthly fee per listing. We were able to use these paid sites, with some print advertising, and kept the average cost for a full month of advertising below $200, which is considerably lower than print advertising for a lot less exposure and results.
So we’ve been happy with the costs, until we realized that many companies are relying solely on Craig’s List free site, which we use as well. Therefore starting in May, we have reduced our paid sites to just three with the main contributors being http://www.rentals.com/, http://www.rentalhomesplus.com/. We still push our listings to over 200 sites, but not as many that charge per listing. So you should see a reduction in your advertising costs come July since their billing is slow. These paid sites do charge per listing per month, so even if the property only takes 4 days to rent up, the fee is fixed. Our goal is to get our advertising costs down to $75 per listing per month, which is significantly lower than our previous goal of being below $200 per month.

Summer is Around the Corner:
It’s been a wet and cool spring. In fact, some bushes are just now finally producing leaves and flowers. It looks like the warm weather is on its way, so the need to water yards is going to increase.

Tony A. Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net/

Boise Area Vacancy Report

2011-04-29T11:17:00.000-07:00

Vacancy Rate in Boise

First Rate Property Management Inc. (FRPM) reported overall vacancy at 1.8% this week. The local chapter of NARPM®, (National Association of Residential Property Managers), also calculates vacancy numbers for the Boise area. The reporting property management companies averaged 2.8% overall vacancies in the same time period. The overall numbers for all reporting property management companies in the Boise area is 3.3%. Are we good or are we lucky? I think our Leasing Department is kicking butt and our overall marketing efforts are working well.

Property Managers in Boise starting to get Busy

At least I can say we're busy. In April 2010 we signed 21 leases, up 4 leases from 2009. This April we have signed 38 leases, a 45% increase over last year. Our average number of managed units in 2010 and 2011 is roughly the same. Right now we're signing, on average, nearly 2 leases per business day! We're receiving hundreds of phone calls every day and showings are booked solid. We will continue to get busier and not start to slow down until October, if statistical history repeats itself.

Submitted by:
Robert S. Waldron

First Rate Property Management, Inc. CRMC®http://www.frpmrentals.com/

BOISE PROPERTY MANAGER VISITS DC

2011-04-21T11:15:00.000-07:00

Tony Drost of NARPM Visits DC

As the President of NARPM, I went to Capitol Hill in DC last week to talk to the Idaho representatives in Congress and Senate about bills in the works that affect Idaho property owners. I was accompanied by Dave Winder with the Certified Commercial Investment Manager Institute and Mindy Gronbeck with the Institute of Real Estate Management. It was a very successful and worthwhile visit. This was an experience of a lifetime for me.

For any of you who have ever gotten commercial financing, one thing you know is that although these loans can be amortized over a longer period of time, the term is generally much shorter. Additionally, commercial financing really looks at the value and performance of the property. So with values down and in many cases, rents as well, they do not perform as well and may not meet the lender’s requirements. There becomes a gap in the percentage of equity based on current value which may cause the bank to require the borrower to come up with cash to make up the difference.

The good news is that at least the Idaho representatives seemed to understand that the banks had a poor approach towards handling their crisis with residential properties. As we have discussed before on this blog, the bank’s own foreclosures and subsequent REO listings caused values to sink like a rock. They flooded the market and drove values down. The bail out money appears to have bailed out the banks, not the American home owners. We’re hoping that they don’t make the same mistake with commercial loans. If borrowers are making their payments as agreed upon, then the banks should not require these property owners to come up with cash to make up the difference in equity position. To do so, could likely cause investors to default, which will drive commercial values down.

Ada County Tax Assessments

Yesterday I met with appraisers for the Ada County Tax Commission. Your tax assessments should be mailed out to you near the end of May. Overall, you should see a decrease in value. If you have concerns about the assessed value, please scan and send me a copy of the assessment notice immediately, as the time to appeal is a very short window.

Current Vacancy Rate Update

April has kept pace with last year, matching the weekly vacancy numbers. First Rate Property Management's current overall vacancy rate is 2.6%.
Vacancies by Unit Type:
Currently one bedroom apartments are struggling at over 7% vacant, while 3+ bedroom multi-family units are at 1.5%. Two bedroom multi-family units are at 2%.
Vacancies by Area:
We break down our managed areas as follows, North Boise/BSU-East Boise-West Boise-Boise Bench-Eagle-North Meridian-South Meridian. Out of the seven areas, the Boise Bench and North Boise are the highest at 3.5% and 3.3% respectively.

Running FRPM Boise Area Vacancy Rate Graph (Click on image to enlarge)

Tony A. Drost
http://www.frpmrentals.com/

http://www.boiseinvestmentproperties.net/

2011-04-15T13:55:00.000-07:00

Boise Area Rental Market Update
Currently, First Rate Property Managements' Boise, Meridian and Eagle combined vacancy rate is 3.1%. This closely matches last years' vacancy rate at this time. Our managed area single family homes are at 2.6% while our multi-family apartments are at 3.3%.

21st Century Marketing
The websites FRPM utilize are very impressive marketing tools. This year to date 76% of our lease conversions have come from our web advertising efforts. This has been increasing over the last two years. In 2010 websites attributed to 64% of lease conversions and in 2009, 55% of lease conversions. We may see website advertising hitting between 80% and up to 85% of First Rate's lease conversions before it finally plateaus. This is due to our other successful lease conversion methods like referrals, drive-bys and signs.

Sometimes the websites are not enough and when properties sit for a period of time we still use the local newspaper (Idaho Statesman), Boise State University's newspaper (The Arbiter), and multiple For-Rent type periodicals. They do get First Rate Property Management's name and our available Boise, Meridian and Eagle properties out into the public eye and of course, our target audience.

Robert Waldron, SPD
First Rate Property Management

Boise Real Estate and Rental Market Improves

2011-04-06T13:43:00.000-07:00

Tony fights for Landlord Rights
Next week, I travel to Washington DC to join property managers across the nation to speak to the representatives in Congress about Landlord Rights. I am looking forward to it and hope that our presence can make a difference as our government continues to look for alternative sources of income.

Also, a few months ago, I was asked if I would support and assist in writing new regulations requiring Idaho property managers to be licensed agents. I do support this and did agree to help. As you may know, property managers in Idaho do not require a license. Anyone can start managing property tomorrow with no experience, no specific education, and no processes in place to safeguard Landlord’s and tenant funds. However, if not written correctly, this additional regulation could put unnecessary burden to property managers. I can tell you that when other property managers found out that I favored some form of regulation of property managers, I became very unpopular. However, something has to be done. I’ve had clients and good friends who have had months and months of rents stolen and tenant deposits spent. Additionally, there are reputable companies in Boise who do a great job managing properties, but unfortunately do not have the systems and processes in place to accurately account for funds they hold. A company our size could have over a million dollars of rents and deposits at the first of each month and I believe there needs to be structure to ensure that those funds are safeguarded. I’ll keep you posted.

Boise Investment Real Estate
Single Family Homes:
With the rental market improving, I’m starting to see more investors looking at single family homes. Generally speaking, single family homes do not perform as well as multi-family properties. However with the low prices and stronger rents, their performance is decent and there is that possibility that as the Boise market recovers and improves, some good money can be made upon the sale of the home.

Income Properties:
In March we saw the number of Ada County duplex listings increase by about 15%. At the current rate of sales, that equates to about an 8 month supply. Four plex sales are looking good with a 7 month supply. There is definitely a demand for newer four plexes and we are seeing any newer four plex listing going pending very quickly. The good news is that the number of REO’s and short sales continue to decrease. In March, 57% of the sales were REOs or short sales. That is the lowest we have seen in nearly two years. I think it is safe to say that as this number continues to decrease the closer we get to seeing values stabilizing and increasing. We have definitely already seen that happen with newer four plexes, so I think the others will follow.

Boise Area Rental Market
Right now, 5% of First Rate Property Management’s rental inventory has given notice to vacate at the end of April. Historically, this number will increase each month until we explode in the months of June and July. Then things begin to slow down once school is back in session. When we receive notices to vacate we begin advertising immediately. So our call volume has increased greatly. Also, this week’s vacancy jumped up to 3.5%. The main reason given by tenants for vacating is that they have bought a home. Very few notices to move this month have been due to rent increases.

Blog
Thank you to all who have forwarded this blog to your friends and family. Our subscribership continues to grow. As you read these and find good things that you think others would benefit by reading, please forward. If there are any specific topics that you would like me to include, please let me know. What do you want to know besides trends?

Tony A. Drost
http://www.frpmrentals.com/
http://www.boiseinvestmentproperties.net/

Boise Rental Vacancy Rate Spring 2011

2011-03-31T11:05:00.000-07:00

Boise Area Vacancy Rates
First Rate Property Management’s vacancy rates in Boise and the surrounding areas remain low despite continued gradual increases in rent and deposits collected. This morning our overall vacancy rate was 1.86%. Last year at this time our vacancy rate was at 2.85%. It is predicted that next weeks vacancy rate will climb significantly (to roughly 3%) due our inventory reduction (smaller sample size) and increased notices to move due to nicer weather.
The call volume at our office is increasing due to the combination of warmer weather, aggressive web advertising and area rental inventory levels remaining low.

Spring Time in Boise, Idaho

Although some of the grass, flowers and trees are starting to wake up, there is still snow visible from Boise in the local mountains. Spring yard clean ups have started, but to be on the safe side, sprinkler turn-ons have been delayed until next week or higher overnight temps.

Submitted by:
Robert Waldron & Lizz Loop
First Rate Property Management