The Secret’s Out: Idaho Holds Some Top Opportunities for Real Estate Investment

Disclaimer: This post is meant to be used for educational purposes only and does not constitute legal or financial advice. If you are considering a real estate investment in Idaho, HomeLight always recommends doing your own research to determine which investment option is best for your situation.

One of the country’s best kept real estate secrets isn’t a secret anymore. Like many parts of the country, Idaho saw a real estate boom like no other throughout the pandemic. 2021 brought over 30% appreciation in real estate prices from the previous year in some areas. With plenty of outdoor adventure activities, family-friendly cities, and lower overall real estate prices than many other parts of the country, Idaho has a lot to offer real estate investors.

But just because the secret is out, that doesn’t mean it’s too late to get some skin in the game. The Idaho real estate market has definitely shifted throughout 2022 with properties staying on the market longer and an increase in inventory. However, demand for real estate in the state isn’t going anywhere.

The state’s real estate experts say that a year-over-year price appreciation for the real estate market is still expected, even if the percentage change is in the single digits instead of double. And, we’ve done our research to find the best real estate investments in Idaho. We’ll walk you through how to find a good investment property and where to look for them in Idaho.

Looking to Get In On Idaho's Thriving Real Estate Market?

While the real estate market in Idaho is shifting, it is still a great time to take advantage of the investment opportunities that this growing state has to offer. HomeLight can introduce you to the top real estate agents in your area with extensive investor experience so you can get the best deal (and the best bang for your buck). We’ve analyzed over 27 million transactions and thousands of reviews, get started today.

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How do you choose a real estate investment property?

Find a property you can afford. Buy it. Rent it out or flip it, and voila. Sounds easy enough, right? Wrong. While real estate investment is simple, it’s not always that simple.

Expert investors know how to look at the housing market and a specific property to decide if a property is worth their time. They also have preferences for what type of investment fits their lifestyle and needs best. A collection of factors make a property right or wrong for an investment. Here’s what you need to consider:

Your budget

There are many different ways to invest in real estate. Depending on your investment method, you may be able to finance your purchase, meaning you can invest as little as 20% of the purchase price, in some cases. Other investments require that you make a full cash offer, as certain sellers prefer cash, and some lenders might not lend on a home in need of extensive repairs. Even if paying with cash isn’t required, it can give you an advantage over other offers on the property.

Your budget determines the type of property you can look at and which areas will have the most options for you. Think about whether you want to pay for the property with cash or finance your investment. Make sure you know exactly how much money you are working with and communicate with your agent and lender about this amount.

Desirable area

In order for an investment to make sense, you need to buy real estate in an area where people want to live. This predicts property value appreciation as well as demand for rentals.

The specific area and neighborhood you choose also determines the options you have for renters. A college town would provide a consistent influx of students. Buying a property in a tourist town might make your property a better candidate for short-term rentals.

A growing economy/ job market

Buying real estate in a town with diminishing job prospects might be cheap, but that doesn’t mean it’s a good investment. While the general real estate market seems to be headed up in value, that doesn’t mean values are increasing everywhere. Do your research on the area you plan to invest in to find projections for job and economic growth.

Population growth

More people moving in means a higher demand for real estate. Looking at the population size of a city and its projected growth over the next ten years can help you estimate the future demand for real estate, whether you plan to rent out your property or sell it down the road.

Type of investment property

Real estate investors have the opportunity to invest in all kinds of different ways. From long-term rentals and vacation rentals, to fix-and-flip properties, and everything in between, you want to look for an area rich in the type of real estate you want to invest in.

If you are on the lookout for a multi-family unit in an area that is made up of single-family homes, you may have some trouble. Look for a growing area that offers multiple options for the type of property you want.

Cost of renovations

Not every investment involves renovations, but many do. Especially if you are looking to flip properties, calculate the estimated cost of renovations, including materials and labor. Make sure the estimated cost lines up with your budget. It would be a bummer to grab a great property, only to find out you can’t afford the needed renovations to make it livable.

Average rental rates

Planning to rent out your investment property? Knowing how much rental income you might be able to receive is an important consideration. Look at similar properties nearby to get an idea of how much rent you could make on your property.

You also want to make sure there is continued demand for rental properties in the chosen area. Areas where rental properties often sit vacant for multiple months probably aren’t the best place for you to invest.

Best cities in Idaho to invest in real estate

Now that we’ve reviewed what to look for to find the best real estate investments in Idaho, let’s talk about where to look. After scouring the listings and reviewing some expert advice, we found these cities to be top places to look for investment properties.

Blackfoot, ID

A smaller town just north of Pocatello, Blackfoot boasts a quiet community that’s great for raising a family. The Blackfoot housing market experienced growth over the past few years, but prices are still much more affordable than some other parts of the state.

“As the big cities are getting bigger and more developed, the outskirts to big cities are becoming a little bit more popular to develop and live in,” notes Elias Trejo, a Blackfoot, ID agent with 9 years of experience. The big cities aren’t the only place to find good investments, so looking in a rural area, like Blackfoot, can offer a great investment location with more affordable price options.

Median home price: $338,824

Average rental rate: $625/month

Population size: 12,332

Boise, ID

The time to snatch up killer properties at a stellar price has come and gone, but that doesn’t mean the Boise market no longer has space for real estate investors. This popular Idaho city is known for its thriving urban scene and strong growing economy. Current unemployment rates sit at 2.7%, a full percentage point lower than the national average.

This area skyrocketed in price over the last few years, but that doesn’t mean there’s no opportunity for investors. Trejo advises investors to look for Boise properties with price reductions from nervous new agents who are inexperienced with market shifts like the one currently happening.

Median home price: $559,000

Average rental rate: $1,677/month

Population size: 237,446

Burley, ID

Another smaller city, Burley is known for its sparse suburban feel and easy access to the outdoors. The construction of multiple new LDS temples in the area also means growth is expected in Burley, according to Trejo. The majority of Burley residents own their homes, so buying properties to flip could be a great way to make money as an investor here.

Median home price: $335,000

Average rental rate: $719/month (Cassia County)

Population size: 10,476

Coeur D’Alene, ID

Working families, professionals, and retirees all find Coeur D’Alene to be a top place to live. Plus, it’s an exciting vacation destination, so real estate investment opportunities of all kinds flourish in the area. While home prices are higher here than in other areas in Idaho, investors with a high enough budget can find great options here.

Median home price: $599,900

Average rental rate: $1,559/month

Population size: 56,726

Eagle, ID

Looking to cash in on the Boise housing market growth in a lesser known area? Look no further than Eagle. This rapidly growing city is right outside Boise, so it’s close to ample employment opportunities and urban life without being right in the middle of it all.

Home prices in Eagle saw an incredible 33.3% increase from 2021 to 2022, and while growth might not continue that quickly, buyers can still expect to see continued pricing appreciation. Prices in this area are on the higher end, but investors with the right budget can find opportunity here.

Median home price: $929,000

Average rental rate: $1,934/month

Population size: 28,145

Idaho Falls, ID

The third largest city in Idaho, Idaho Falls offers a more affordable housing market than some of the other big cities in the state. With a cost of living lower than the national average and close proximity to Yellowstone National Park and the Grand Tetons, Idaho Falls offers investment property opportunities for both short-term and long-term rentals.

Like the broader Idaho housing market, the home price increases in this city have dipped slightly. However, experts expect Idaho Falls and the surrounding areas to see continued housing market growth, so now could be a great time to invest.

Median home price: $420,000

Average rental rate: $800/month

Population size: 66,898

Meridian, ID

Investors hoping to find the next big thing in Idaho real estate investments can look to Meridian. Great schools, low crime rates, and a strong job market are just a few of things that make this city popular. The population size increased by 5.94% from 2021 to 2022 and growth is expected to continue.

Median home price: $579,900

Average rental rate: $1,798/month

Population size: 125,963

Pocatello, ID

Known as “The Gate City,” Pocatello is the first major city north of the Utah border. The city houses Idaho State University, so investors can look for real estate opportunities that cater to transient college students. And home prices are holding steady in the area even as higher interest rates have driven prices slightly down in other areas.

Median home price: $325,000

Average rental rate: $1,076/month

Population size: 57,092

Rexburg, ID

One of Trejo’s recommendations for expected property value appreciation? Rexburg. This small city shouldn’t be underestimated. Its proximity to outdoor attractions brings many tourists to the town. Also, as home to Brigham Young University – Idaho, Rexburg sees a lot of students come and go. All of this adds up to a high probability for consistent rental property ROI.

Median home price: $372,000

Average rental rate: $950/month

Population size: 29,064

Twin Falls, ID

A growing smaller city, Twin Falls may soon become a mid-size city due to its growth. The city boasts outdoor activities and a low cost of living. These features attract residents from higher-cost cities, meaning great property investment opportunities if you are looking for long-term renters.

Median home price: $395,000

Average rental rate: $850/month

Population size: 53,213

Tips for finding a great investment property in Idaho

Making the move on your first investment property is a big deal, and you will surely make mistakes along the way. But finding helpful advice on how to get started in real estate investment will help you avoid some of the bigger mistakes.

Partner with an expert real estate agent

Finding the right real estate agent is key to becoming a pro real estate investor. Many agents, however, don’t know as much about real estate investment on a larger scale — find an agent who does. Interview multiple agents to find someone who has a lot of relevant knowledge and experience.

HomeLight’s Agent Match tool can connect you with expert agents in your area. Start by finding a few who have real estate investment experience and go from there.

It’s ok to say no

“The best advice I ever got was that it’s ok to say no to the majority of opportunities you get into,” says Trejo. Real estate investment takes a solid plan and lots of patience. Know what you are looking for and be willing to say no until you find it. It can be exciting to make a purchase, but if you take your time finding the right property, you will be much better off in the long-run.

Understand your local landlord/tenant laws

Tenant laws vary by city, county and state. Check with your local government to get educated on the laws where you plan to buy a property. Trejo notes that the laws in Idaho are generally clear and easy to understand.

Hiring a real estate attorney can also provide the help you need to follow every law. The last thing you want is to buy a property only to find out you can’t rent it out the way you planned. Know the laws before you buy so you can make the best plan for purchasing a property.

Leave room in your budget for maintenance

Buying real estate means taking responsibility for everything on a property. And property maintenance costs can add up quickly. The average yearly maintenance costs for homes in Idaho add up to $15,772.

Plan your budget expecting to pay some maintenance costs. Make sure you have a good estimate on how much you may have to dole out in repairs and regular maintenance on the property, and account for these as you calculate your yearly ROI. Knowing every cost ahead of time will lead on the path to being a successful real estate investor.

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