by Marisa Owen
on Thursday, March 14th, 2019 at 1:43pm.
With Bozeman housing prices increasing every year, is it still feasible to find a profitable rental property here in Bozeman?
The short answer is YES. The rental market demand is STRONG, but there are simply not enough rentals with the number of students and additional residents moving to Bozeman every year.
"In Bozeman, the most recent American Community Survey figures estimate that 56% of households are renters and 44% are owners." In looking back since 2000, the number of renters vs. owner households has maintained the same high ratios (55-57% of households). The distribution of the renter households vs. owner households has not significantly changed in the last 16 years.
Right now (in 2019), we are seeing 3 bedroom households, renting anywhere from $500-$800 per room plus.
A studio or one bedroom apartment (depending on the proximity to Downtown Bozeman), can easily rent for $900 plus per month (that's a modest number).
The rental location, property amenities, and the ratio of bedrooms to bathrooms will dictate the rental income on the unit.
Downtown Bozeman rentals will hands down yield a higher rent due to the walkability to restaurants, shops, and bars. Higher rent will weigh on the amount of upgrades done to the property.
We are not seeing drastic fluctuations in rent for townhomes vs single family homes, or townhomes vs. condos.
Yard - Willingness to have pets in a rental could beneficially increase your rental income if done strategically.
MSU Undergraduate Numbers
Bozeman is a unique town in it's smaller size and vibrant city supported by a successful university, Montana State University (MSU). MSU's undergraduate student population is a staggering 16,902 students (this number excludes your graduate students). MSU set a new enrollment record in 2018. So with that success, the most obvious next question is "Where do all of these students find housing in a small town like Bozeman?" While there are options to live on campus, the opportunity to live on campus is certainly not a guarantee and is often times not as affordable as renting off campus. Students and the millennial population are a large subset of our renter demographic. In summary, there is a long lasting support to a strong rental market and MSU is not going anywhere.
WORK WITH A PROFESSIONAL
I understand FIRST HAND the ins and outs of the Bozeman rental market and work with many investors to help find them profitable investment properties. I guide my clients to be set up for success and remove a lot of the backend research for them:
Understanding the neighborhoods (high renter area?)
Evaluating lowest HOA fees
Reviewing Covenants regarding rental restrictions
Researching approved renter ratios in a Condo Association
....... And the list goes on.
But first, I will connect you with preferred local lenders to understand the downpayment requirements and loan programs best suitable owning a rental property.
FIND A RENTAL PROPERTY!
If you have a Financial Advisor, they will always tell you, diversify your assets. If you are sitting on some cash and weighing out the odds whether or not to invest, please give me a call or send me an email at (925) 785-2596 or Marisa@BuyBozemanHomes.com.
Source: City of Bozeman, 'Demographic and Real Estate Market Assessment 2018'; prepared by Economic and Planning Systems, Inc.