Seattle is a unique city that attracts condominium dwellers. Although there is no shortage of both pros and cons regarding condo living, those committed to condo living have a complex approval process to navigate. Getting an early start on loan approval is crucial to getting the best condo for your family.
Investing in real estate has a lot of benefits over investing in things like stocks, bonds, and mutual funds. Properties increase in value over time, offer stable cash flow and can bring in a higher rate of return. Not only that but holding onto properties can increase equity while someone else pays your mortgage for you. Indeed, buying real estate is a sound investment decision that can help you build a comfortable nest egg into the future.
For those looking to buy in Idaho, there are plenty of great spots to look at. Whether it’s Boise, Pocatello, or Nampa, Idaho brings a number of advantages to investors, including affordable real estate prices and relatively high rent to cover expenses.
Let’s take a look at some of the factors that real estate investors should be looking at before choosing a property and city to buy-in.
The Immediate Neighborhood
While the city itself is an important factor to consider, you’ll also want to take a look at the immediate neighborhood that a property is located in. It should be a place where people want to live and is considered desirable.
For starters, have a look at the safety of the area by checking out crime rates. The exterior of properties and how they are maintained – both for residences and businesses – should also be analyzed. Perhaps a good school in the area may be wise to look into, especially if you plan to rent to families with kids. And if the area has a local college or university, you can open up your pool of potential renters.
Cost of Insurance
There are plenty of carrying costs associated with owning property, and insurance is one of them. Look into the cost of homeowner’s insurance in the area in Idaho that you’re looking in to make sure your budget will adequately cover it. Also, consider the type of coverage you want or need, and this can influence your policy and its cost. Some areas might have high insurance rates than others, which is something to consider.
Another expense that you will need to cover is property taxes. Some areas in Idaho have higher property tax rates than others, so you’ll want to compare these areas among different neighborhoods in the city you’re looking in. While high property taxes could mean that the area is desirable and could translate into higher rent prices, they can also eat into your overall profits. Make sure to do some number crunching before you settle on one spot.
Income Versus Cost of the Property
If the goal is to rent out your investment property, then you want to make sure that the rent you can realistically charge for the unit will adequately cover all of your carrying costs, and then some.
For instance, if your mortgage, property taxes, insurance, and other carrying costs total $1,000 per month, then you will want to make sure you can at least charge that much in rent just to break even. Unless the area in question is expected to quickly improve and increase in value, you should always follow this rule.
Now that you know what to look for in a rental property, where are the best places to invest in rental property in Idaho in 2020?
Best Cities in ID to Buy Investment Properties
There are several great cities in Idaho to invest in real estate. Here are a few examples of ID cities that you may want to consider investing in this year:
- Median home price: $336,200
- Expected increase in price over the next year: 8.5%
- Average rent: $1,532
If there was ever the perfect time to invest in Boise’s real estate market, it would be now. Boise’s average home price has already skyrocketed 10% over the past year and is expected to rise another impressive 8.3% over the next 12 months. In fact, Boise is the fastest-growing city in the country right now.
The city has been named the hottest in the country for 2020, and investors who get in now can ride the wave of appreciation while owning property that people – both buyers and renters – have a high demand for. The schools are highly ranked, the crime rate is low, and the prices of homes are still incredibly affordable, particularly when compared to other cities in nearby states. Population growth is rapid, as people are flocking to more affordable cities to escape the sky-high prices of cities in nearby California.
And with a decent average rent amount of $1,532, that should be more than enough to cover all your carrying costs while leaving plenty extra.
- Median home price: $238,500
- Expected increase in price over the next year: 6.3%
- Average rent: $1,300
Another super hot real estate market in Idaho is Idaho Falls. Like Boise, the average home price has soared over the past year. More specifically, prices have climbed a whopping 12.4% over the past 12 months, and are expected to continue along a similar path with another 6.3% increase over the next 12 months.
Idaho Falls offers plenty of stunning outdoor activities to keep residents busy, including nearby Yellowstone National Park and the Grand Tetons. The local economy is strong and wage growth is healthy. Unemployment is low while the number of jobs available is increasing. People appreciate the strong labor force, great outdoors, and affordable home prices in Idaho.
As an investor, you can charge a healthy rent of $1,300 a month, which should be more than enough to cover the expenses associated with low home prices of just over $238,000. And if you get in the market now, you can take advantage of growth in equity as prices continue to climb.
- Median home price: $355,800
- Expected increase in price over the next year: 8.4%
- Average rent: $1,656
While not necessarily quite as hot as Boise or Idaho Falls, Meridian’s real estate market is still pretty warm. According to Zillow, the median home price in Meridian has climbed 8.8% over the past year and is expected to keep up the same pace by rising another 8.4% over the next 12 months. Investors who get in the game today can benefit from healthy price appreciation and home equity growth.
Rents in Meridian are also very high relative to the average home price in the city. Landlords can expect to collect an average of $1,656 in rent every month, which should be adequate enough to cover carrying costs for an average home purchase price of just under $356,000.
The job market is quickly expanding, and the unemployment rate is very low, making Meridian a great place for employment opportunities. Plus, the crime rate is low, which is another attractive feature that makes this city even more desirable. Landlords should have little problem finding tenants looking to live and rent in Meridian.
- Median home price: $525,400
- Expected increase in price over the next year: 4.6%
- Average rent: $2,037
Located north of Boise, Eagle is a fast-growing city in Idaho. In fact, the population is growing so quickly that the demand for housing is very strong, prompting builders to construct hundreds of new homes to meet the demand. You can see the demand on housing in Eagle simply by the rapid increase in average home prices, which now sits at just over $525,000. Over the past year, home prices have increased by nearly 10% and are expected to increase by another 4.6% over the next 12 months.
People moving to Eagle are interested in the city’s proximity to Boise and its labor market while also having the convenience and privilege of the great outdoors and plenty of space. Lot sizes tend to be much bigger in Eagle compared to the center of Boise, giving residents plenty of space to roam, and the prices reflect that.
Landlords can take advantage of handsome rents just over $2,000 a month, as well as high demand for housing and an upward trajectory in appreciation.
- Median home price: $219,500
- Expected increase in price over the next year: 4.7%
- Average rent: $1,120
Idaho is considered to be the fastest-growing state in the country, according to the U.S. Census Bureau. In 2019, the state’s population grew 2.1%, which is higher than any other state in the nation. A huge chunk of the people flocking to Idaho are Californians looking for more affordable housing, and Twin Falls is seeing a lot of that population growth.
Twin Falls is located in the southern part of Idaho and boasts gorgeous landscapes and a quieter lifestyle compared to more bustling cities. That said, the local labor force is very strong, helping to attract workers of all ages, including those who are looking to rent instead of buy.
Landlords can charge an average rent of $1,120 on home purchases of about $219,000, on average.
Ready to Apply For a Mortgage in Idaho?
If you want to buy an investment property in Idaho, you’ll need a mortgage to finance this expensive purchase. If so, Sammamish Mortgage is here to help. We are a family-owned Mortgage Company that offers borrowers in Washington, Oregon, Idaho, and Colorado many mortgage programs with flexible qualification criteria. Get in touch with Sammamish Mortgage today!