Boise Area Vacancy Report

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

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/

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

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/