The property rental market in the Bitterroot, and specifically the southern end of the valley surrounding Hamilton, is very unique in several ways. If you own or rent a property in this area, understanding the market and what drives it is important to keeping your property rented with quality tenants, at a rental rate that can keep you smiling. The market forces that impact Missoula county generally do not apply here. The towns of Lolo and Florence, and even to some degree Stevensville, are close enough in proximity to Missoula that they are influenced by the market factors in the municipality. Closer to Hamilton the market operates on a rhythm of its’ own.
Hamilton rental rates are generally lower, reflecting the lower per capita average income. Property values, however, are often similar to those of the northern reaches of the valley extending into Missoula. Those values have come down from their peaks of several years ago, but many homeowners-turned-landlords owe more on their homes than they are currently worth, which drives homeowners to seek for higher rental rates to cover their investments. This keeps rental rates suspended a bit higher than they might otherwise be.
The pool of renters in the southern valley vary dramatically, as they do in every market. Renters range from low income earners that are domestically tied to the area, that are extremely price sensitive, to wealthy retirees looking to rent before buying their dream retirement castle. Depending on the property, it is important to price it right to target the type of tenant that you want in there. I have seen that pricing lower-end properties at “bargain” levels in an attempt to get them filled can attract those in the tenant pool that have poor credit and poor rental history, and in general serve as poorer, less stable, more transient tenants. Keeping housing better kept up and pricing it at median market-supported levels tends to attract less potential tenants in general, but potential tenants of a higher quality.
Understanding current market trends and looking to where things are trending in the future can pay big dividends in keeping vacancies down and attracting the type of tenants that homeowners are after.