4 Things to Look for When Buying a Rental in Boise, Idaho

Owning and managing rental homes puts us pretty deep in the weeds on what adds to, or detracts from, rent values in Idaho. Here’s 5 things I recommend looking at if you’re planning to buy a rental home in Boise or the surrounding areas.

Before we get too far ahead of ourselves, we need to get on the same page with three things.

First is if you already own a home or rental and it doesn’t align with all these it’s FINE! Your property may be a great rental. Every home has pros and cons. This list is meant to help those who are looking to purchase a single family home rental.

This brings up point #2 – PRIORITIES.

I invest in and manage mid to high-end single family homes. I want to own rentals that are turn-key, in great condition, and have minimal ongoing maintenance issues and related costs. That’s the lens through which I assess potential rentals.

Other people want the diamond in the rough. Their model is to find a home that’s been completely neglected, fix it up and rent it out. If you want to learn more about that model google “BRRRR Rental” or look at BiggerPockets.com where you’ll find a lot of people talking about that method. It works great for some people. It’s just not the approach I can speak to.

Point number three is I’m not an investment advisor. This is my personal opinion based on my experience with rentals in Idaho.

If you’ve got some funds, whether it’s cash or you’re going to 1031 out of another investment and want straightforward insights from someone who both owns and manages single family homes, you’ve come to the right place. Here are 4 things to consider, though in reality there’s a much longer list. If you’re truly considering buying an investment home in or around Boise please reach out and we can talk you through the plethora of nuances that can impact rent.

1.  Location

Location matters in a few different ways. First is the city you’re looking in. Eagle and Star tend to have higher rents than the neighboring cities (at time of writing). Boise really depends. Some areas like the North End and Southeast Boise command some of the highest rents in the Valley and other areas don’t experience the same premium. Boise also has more rules around rentals and tenant protections than other areas of the Valley. 

Beyond general area, location of the exact lot can matter too. Does it back to a busy street or something unsightly? If so, anticipate it getting less rent than comparables.

Conversely, backing to green space, a park, or other open area can help you get more for your rental or set it apart from the competition and get it rented more quickly.

This is important to highlight. Not everything will directly impact rent. Sometimes there are elements that a tenant may not necessarily pay more for, but can set your property apart from the competition and get it rented more quickly. This gets income coming in faster and reduces the time you’re paying out expenses with no rent coming in.

2. Yard Size

This is a Goldilocks situation.

People in Idaho tend to like to be outside. A home with a postage stamp size back yard is usually less desirable and can also limit your renter pool due to pet size constraints (pets are a whole other topic we cover here).

Conversely, large yards usually aren’t great for rental property either. Tenants don’t want to have to spend their days mowing the lawn, and it’s very costly if it’s not taken care of appropriately.

Why don’t I just include landscaping and charge tenants more rent to cover it?

Tenants tend to see landscaping included as a ‘nice to have’ but not something they’re willing to pay more for. It tends to be an expense to the owner. Think of it as an owner benefit because you’re ensuring the landscaping is taken care of to the level you like. If you have a large yard or intricate landscaping, plan to include it.

Having a mid-size yard with some landscaping is a great middle-ground. Grass with some bushes or tress around the perimeter makes for a great rental. If you have beds, permabark or other small rock is preferable. If there’s bark, you’ll want to budget replacing it every few years or pulling it out and putting rock down. Bark looks great the first year, but quickly ages and loses its luster after one or two Idaho winters. You want landscaping that looks great with minimal effort.

Having large trees can add charm to the property but can also add expenses. First, if they’re close to the house when the leaves drop, they’ll clog the gutters. You’ll want to budget in gutter cleaning a few times a year in this case. In addition, we’re seeing insurance companies get picky about tree limbs hanging over or touching roofs and requiring the limbs to be removed which is surprisingly expensive. Finally, tree roots can interfere with septic lines or break sidewalks if planted too close.

3. Age of Home

This is key. If you’re buying a home that’s 15-20 years old with original appliances, budget in replacements over the first few years. It seems like many appliances’ lifespan are around that timeline and Murphy’s law says they all break at once. Multiple appliance replacements or a roof replacement can eat away months or a year of profit you thought you’d have from the property.

Buying an older home can also mean additional maintenance costs. While the North End and Bench feature charming homes built in the 1900’s, old homes can come with baggage. This baggage is often in the form of a century of DIY improvements from decades of different owners with questionable aptitude for home improvements. While this might add fun personality if it’s your primary home, it can lead to frustrations when it becomes a rental and higher maintenance costs.

Idaho’s growing and there are a ton of new subdivisions popping up all over the Valley. New homes can make for great rental properties. Because they’re new with the latest finishes and layouts, they often garner higher rent than older homes that are showing their age (again, depending on the location). You’ll also have a builder’s warranty the first year, and some of the major appliances have warranties beyond that. Buying a new home often means more predictable maintenance costs too.

4.  Was it a flip?

I’m wary of investment properties that were ‘flipped’ (when someone buys it, remodels it then sells it off). Unfortunately, corners may be cut when this approach is used because the person doing the flip is concerned about short-term profit, not what will perform well over long-term. It can lead to more maintenance issues once you buy the property and those cut corners become apparent.

In addition, if we go back to point 2 it’s often older homes that were flipped. While there may be nice new granite and stainless steel appliances, the less flashy aspects of the home, like the HVAC system or roof,  may not have been touched.

I’m sure there’s some great flippers out there who do things the right way but unexpected major expenses are the last thing you want with a rental.

What Else

The biggest thing is whether the rental pencils out.

Do you expect cash flow? Are you using it to diversify and are fine with it breaking even? What do you expect to make from it?

Do. A. Proforma. 

I’m often surprised when I get a call from someone who is already under contract with a property before they start talking to a property manager. They know what the property sale price is, but they are missing half of the equation- what it can rent for. This number is key.

If you’re starting to look for a rental to buy, talk to a property manager early. We provide rental numbers to help people assess the homes on their short list. In addition to the above information, there are many other aspects of a home that impact rental prices. If you bring us in early we can offer these and other insights tailored to the rental home you’re considering.

You May Also Be Interested In…