Please point me to a new growing market in the Pacific NW

[Matthew McNeil]

After buying 3 SFHs in the Boise/Meridian Idaho Treasure Valley area, all of which are producing healthy positive cashflow, I'm ready to buy another SFH. However, the Boise area market is [arguably] the fastest growing in the US and home values are currently priced at levels that would result in zero or negative net cashflow because rents are not rising in proportion to values.  

Note; Even though the Boise area market home values are increasing by double digits annually, I’m not interested in anything that doesn’t produce positive cashflow (such as focusing on long term equity growth) for various reasons covered on other BP forums and blogs.  My real estate agent of 10 years, ranked as one of the best agents in the valley, confided to me that very few investors are currently buying rental properties in the Boise area – for the reasons listed above.

I'm ready to buy another SFH, and I’m looking for an alternative healthy market in Idaho or Washington.  Help me refocus on a new growing market.  Deeply appreciate anyone who can point me in another direction, based on what they're seeing and where they're investing after crunching their numbers.  Thanks!!

[Uwe G.]

Matthew, that is really good advice all around and I like the comment in the last paragraph which focuses on higher quality homes fetching higher quality tenants.  That is great advice!

Originally posted by @Matthew McNeil:

@Uwe G. 

I started investing in SFHs 10 years ago. My portfolio isn't as big was many of the other BP investors (I'm on my 6th SFH). I'm actually from Oregon and I started by doing comparative demographic studies for Washington, Oregon and Idaho that included taxes, cost of living, current rental rates, job market, etc. by looking at stats available online. Idaho came out on top by a large margin and I'm very happy with how our investments have done. Regardless, however, every market has its respective potential and upside, but it's up to the investor to carefully crunch their numbers and be as objective as possible without "losing themselves in their spreadsheets."

Yikes, here I am sounding like an expert which I’m not, but I’ll use that as a lead-in for my next comment. Honestly, it’s not my wisdom or investment skills that helped me become successful with my investments. Rather, I give credit to a team of professionals who have given me excellent counsel and advise; my attorney, my real estate agent and my property manager. I have never made a move without proactively seeking out their honest advice, and they’ve helped me dodge a few bullets and pointed me in the right direction – all of which have paid off.

As for “main drivers” you mentioned.I think its important to consider an amalgamation of additional drivers that include good schools, infrastructure (is the county planning and building for growth), local government policy, and economic cycles. And, it would be a mistake in today’s world not to study what Millennials are desiring. Finally, we only invest in newer properties less than 10 years old. Two main reasons which I’ve learned over time; maintenance budget is much less and you can get better quality renters able to pay higher rent.