Start here. Everything after this page is the evidence behind these answers, and it is there whenever you want it.
Yes. Rexburg is full and Teton Valley cannot house the people who work there. About a quarter of that workforce drives past Newdale twice a day. Two-bedroom apartments in the towns around you rent from about $1,200 in Rexburg to $1,800 in Teton, and the newer ones sit at the top of that. Your $1,500 is comfortably inside it.
No. The nightly rental business has gotten worse rather than better. The average Rexburg Airbnb brought in $15,400 all of last year. One steady tenant at $1,500 a month pays you $18,000, with no furniture to buy and nobody to clean up after. An annual lease is the better business.
The county counts this as one house, not three apartments. That matters more than it sounds like it should. A bank will treat it as a family home with a rented basement, and an appraiser has to point at other houses nearby that have actually sold in order to say what it is worth. There are not many, and the ones there are sold for a good deal less than what is in this building.
You built above what Newdale has sold before. That is a credit to the work and a problem for the appraisal. A buyer can love this house and still be told by their bank that it values for less than they offered. Our best read today is a range of $550,000 to $650,000, and Rick is pulling every comparable sale in the area this week to turn that into a real number.
Only if you can finish it for less than it adds. Because the county counts this as one house, an appraiser gives the basement a partial credit rather than counting the rent, so finishing may not return every dollar you put in. You built it, so your cost to finish is a better number than any estimate we could make, and it is the number the decision turns on. Send it over and we will run it both ways.
The alternatives that would bring a higher price all require you to stay in this building for several more years. If a clean sale is what you want, our recommendation is to sell it, price it where it will clear a bank appraisal, and accept that the last stretch of price is not worth six months and a failed escrow to chase.
The pages that follow show where every one of these numbers came from, including the assumptions we would want you to push back on. Rick will walk through any part of it with you.
You asked for a level read on the market before deciding what to do with the basement. Here are the three questions you put to us, and our answers to each.
Are the rentals up the road actually full?
Are there renters driving past Newdale every day because there is nothing available where they are looking?
Has the Airbnb market gone up or down?
Is short term still worth chasing, or has that window closed?
What is a level read on this market?
What does finishing the basement actually do to the value, and who buys this?
Before the strategy, the facts. These are the numbers a buyer and an appraiser will start from.
Taxes are a confirmed $3,205 a year, which is genuinely good news for the operating numbers and better than we had estimated. The one thing to check before we publish a pro forma is whether any exemption is baked into that figure, because an exemption tied to living in the house does not follow the property to a buyer, and the county will reassess once the basement is finished.
You were right, and the pressure is coming from further away than Rexburg. It is Teton Valley.
You are not fighting for tenants in a soft market. You are sitting on the commute line between a college town that cannot house its own growth and a resort valley that cannot house its own workforce. Filling two units in Newdale is a marketing problem, not a demand problem.
These are live listings and current market averages in your immediate trade area, August 2026.
| Market | Unit | Monthly rent |
|---|---|---|
| Sugar City | 2 bed, 1 bath | $1,300 |
| St. Anthony | 2 bed, 2 bath | $1,325 |
| St. Anthony | All types, average | $1,382 |
| Rexburg | 2 bed, average | $1,203 |
| Teton, Idaho | 2 bed, 1 bath | $1,800 |
| 180 Church St | 2 bed, utilities included | $1,500 target |
Your $1,500 sits in the upper half of the band but inside it. Utilities included is what justifies the position, and the solar array is what makes utilities included affordable to the owner. New construction, in-floor heat, and a full appliance package including washer and dryer put you at the top of what this area offers. We would plan on $1,350 and treat $1,500 as the good case.
A buyer's agent may hand you a report showing Rexburg at 13 percent vacancy with median rents falling. That number is real, and it is the student contract market, where a bed in a shared apartment turns over three times a year. It is a different product from a two-bedroom apartment with a private entrance and in-unit laundry. Do not let anyone quote it at you without that context, and it is not the number that applies to your units either.
You asked whether short term is still worth chasing. Here is the trailing twelve months for the Rexburg short-term rental market.
The average Rexburg short-term listing grossed $15,400 over the last year at a $147 nightly rate. One long-term two-bedroom at $1,500 grosses $18,000. The long-term number wins before you account for the difference in cost, and the cost difference is the real story: short term means furnishing two apartments, linens, cleaners between stays, guest communication, platform fees, higher insurance, and vacancy measured in nights instead of months.
We pulled the whole region so you can see the pattern. Short-term revenue tracks one thing: how close you are to the reason people came.
| Market | The draw | Active listings | Revenue per listing |
|---|---|---|---|
| Driggs | Grand Targhee, Tetons | 397 | $46,575 |
| Victor | Teton Pass, Jackson overflow | 347 | $41,330 |
| Island Park | Yellowstone west gate | 711 | $40,369 |
| Ashton | Yellowstone corridor | 93 | $22,000 |
| Rexburg | University visitors only | 271 | $15,400 |
| Newdale | No visitor draw of its own | Negligible | No established market |
Newdale is on the road to Teton Valley, but it is a real drive to the hill and a longer one in winter, and about an hour from Island Park. Being on the road is not the same as being at the destination. A guest choosing between a basement apartment thirty minutes from the hill and one of the 744 listings already operating in Driggs and Victor is choosing on price alone, and that is a race you do not want to enter with two brand new units.
Idaho House Bill 583 was signed in March 2026 and takes effect July 1. It is the broadest short-term rental preemption law in the country, and it strips cities and counties of the ability to require permits, fees, or density caps. It does not protect your returns. It removes the barrier that was holding supply down. More listings are coming into markets where daily rates are already falling.
Long term wins on this property and it is not close. It also happens to be the strategy that makes the building financeable and sellable, because a signed lease is an asset an appraiser and a lender can both use. A nightly booking is not.
The basement decision is not really about square footage. It is about which buyer you are selling to, and there are only three versions of that.
Basement stays unfinished. No income, no leases. You are selling a very large house in a town with few recent comparable sales. The buyer pool is an owner-occupant who wants exactly that, plus a handful of investors who will discount hard for the work and the risk.
Priced off: the finished value, less the cost to finish, less the margin a builder or investor takes for doing that work and carrying the risk. That deduction typically runs about one and a third to one and a half times the hard cost, so your cost to finish sets this number as much as the market does.
Trade-off: fastest and cheapest, and the weakest price. It is also the only one of the three that delivers the clean prompt exit you asked for, so it deserves more weight than its name suggests.
Same building, completely different buyer. Finished units mean the property can be underwritten on income instead of guessed at on comps. The 669 square feet becomes a family room and bath for the main level, not more bedrooms.
Priced off: projected income, verified by an appraiser.
Trade-off: real cost and time, materially better price.
Finish the units and get at least one lease signed before we go live. Now the income is documented rather than projected, and the buyer's lender can count it toward qualification, which widens the pool of people who can actually close.
Priced off: actual income.
Trade-off: strongest position, longest runway. The extra months are the cost of the extra price.
Every investor who looks at this will do one piece of math. Take the rent, subtract what it costs to run the building, and divide what is left by the price. That answer is called the cap rate, and it is how they decide what to offer. Move the sliders and watch it move.
Property taxes are the confirmed current bill of $3,205. One caution for the pro forma we hand a buyer: if any part of that reflects an owner-occupancy or age-based exemption, it does not transfer, and the county will reassess once the basement is finished. We should confirm the exemption status so nobody is surprised after closing. Insurance and utilities are still our figures, and both are editable above, so your real numbers can go straight in. Utilities sit at $3,600 because the solar covers the electric. Maintenance and reserves run at 8 percent of gross rent.
There are two ways this gets quoted and the gap between them is where deals fall apart. Gross yield divides gross rent by price and looks strong. Cap rate divides net operating income by price and is the only one a buyer's analyst will use. On our expense assumptions this property lands near 5.6 percent at $800,000. The next section is about what that actually means for price.
You asked what the market is doing. Here is every reference point we could find, from the national average down to our own back yard.
| Market or segment | Cap rate | What it tells us |
|---|---|---|
| National, all multifamily | 5.0% | Flat for several quarters, the longest plateau in 25 years |
| Boise MSA multifamily | 5.2% | Idaho's strongest market, priced tighter than the nation |
| Rexburg apartment buildings | 6.0% | Our nearest real comparison, university demand behind it |
| Small multifamily, national | 6.0 to 7.2% | Duplex and fourplex trade wider than large apartment complexes |
| Pocatello apartments | 6.3 to 7.7% | Secondary Idaho market, no university housing premium |
| Class C, tertiary markets | 7.0 to 9.0% | This is the bucket Newdale sits in, population under 400 |
The answer to your question is that 7 percent is the right target, and it may be generous. Newdale is not Rexburg. There is no university, no employer, and no depth of tenants if a unit goes vacant. Every one of those is a risk an investor prices in, and they price it in by demanding a higher cap rate. Nothing about that is a comment on the building, which is better than most of what trades in this region. It is a comment on the address.
Cap rates do not float free. They are anchored to what money costs, and money is expensive. Investor debt on a small multifamily today runs 6.5 to 7.25 percent. On a thirty year amortization that is an annual debt constant of about 8.2 percent of the borrowed amount.
Which means if the building returns less than the loan costs, every borrowed dollar loses money. Investors call that negative leverage, and nobody takes it on purpose. At a 5.6 percent return against 8.2 percent money, the more they borrow the worse they do.
At $800,000 the building takes in $44,983 a year after expenses, and a normal 75 percent loan costs $49,117 a year to service. The rent does not cover the payment, and lenders want it covered with about 20 percent to spare, so that loan does not get made. An investor could still close by putting far more down, and at 50 percent down the numbers work. But that is a cash buyer choosing to accept a poor return, not a financed buyer competing for the property. Above roughly a 6 percent return, borrowing stops helping, and that is what caps what a financed investor will pay.
Working backward from the same income model, holding rents at $2,200 for the main level and $1,500 for each basement unit. Operating costs are held constant at the figures above. Property taxes will change after a sale and after the basement is finished, and we have not modeled that. A higher bill lowers every price in this table.
| Target cap rate | Sale price | Rent vs payment | Who this clears |
|---|---|---|---|
| 5.0% | $899,700 | 0.81 | Nobody. No lender funds this. |
| 5.5% | $817,900 | 0.90 | Nobody financing it. |
| 6.0% | $749,700 | 0.98 | Cash buyer only, and they will still pass. |
| 6.5% | $692,000 | 1.06 | Still short of lender minimums. |
| 7.0% | $642,600 | 1.14 | Approaching workable. A strong buyer might stretch. |
| 7.4% | $607,900 | 1.21 | Clears a standard lender's minimum. |
| 7.7% | $584,200 | 1.25 | Comfortable. This is where an investor is happy. |
Debt coverage assumes a 75 percent loan at 7.25 percent over thirty years. The sensitivity is not symmetric. At $1,350 per unit every price above drops by about $45,000. At $1,600 it rises by about $30,000.
At a 7 percent cap this property is worth about $643,000 to an investor. At the 7.4 percent a lender actually needs to see, it is $608,000. Both are well below the $770,000 this was last listed at. If we market this as an investment property and lead with a cap rate, that is the conversation we are inviting. The next section is why we are not going to do that.
You have told us the lot will take three more units on top of what is there, for six in total. That is the best card in this hand, and it is worth separating what it is worth to a buyer from what it is worth on an appraisal.
A great deal. It is the difference between a large house with no comparable sales and a property with a future. Three more two-bedroom units at local rents would add roughly $47,000 to $54,000 a year in gross rent. It also explains why the wiring, the single meter, the commercial block, and the free parking on the city right of way all matter. Those are what make the sixth unit possible without tearing anything up.
Very little, which surprises most people. Because the units cannot be split off and sold separately, the leftover ground is what appraisers call surplus land rather than excess land. Surplus land has no separate highest and best use, so it is credited at a fraction of what a buildable lot would fetch, and occasionally at nothing at all. The capacity sells the property. It does not lift the appraisal.
The other thing worth saying plainly is that building them is not free money. Three units of roughly 800 square feet each would cost somewhere in the range of $360,000 to $480,000 to build, before utility hookups and site work. Once built and rented they would be worth somewhere near $470,000 to $540,000 at the returns investors are paying in this market. That is a real project with a modest margin, not a windfall, and a buyer will price the option accordingly.
The six-unit capacity is the strongest thing in this listing, which is exactly why it needs to be documented before we advertise it. A buyer's lender and their attorney will want the city's confirmation rather than ours, and we would far rather hold it in hand than have it questioned in the middle of escrow. So we need Newdale to confirm it in writing, along with whether city water and sewer can carry three more connections. If they confirm it, this becomes the headline of the listing. If they will not put it in writing, we can still raise it, described as information from the sellers for the buyer to verify.
An investor values this on a cap rate and stops at roughly $643,000. Somebody who lives upstairs and rents the basement does not use a cap rate at all. They compare it to what it costs them to live somewhere else, and that math is dramatically better. The catch is that their bank still has to agree, and that is where the county calling this one house starts to hurt.
The county counts this as one property, not three. That is settled, and it rules out the financing that would have helped most. A legally permitted two to four unit property lets a buyer put 5 percent down and count 75 percent of both rents. A single family home with basement apartments does not. Fannie's March 2026 update does allow accessory unit income on a one unit home, but only from one unit even when two exist, and capped at 30 percent of the buyer's income. The buyer still collects both rents. They simply cannot use both to qualify.
| Purchase price | Income needed | What that is |
|---|---|---|
| $700,000 | $109,700 | Households at this income level exist here |
| $750,000 | $119,400 | A thinner pool in Fremont County |
| $800,000 | $129,000 | Few qualifying households in this market |
Household income required at a 43 percent debt ratio, 5 percent down, 6.5 percent over thirty years, counting one basement unit toward qualifying. Had this been a permitted three unit, those same prices would need $78,300, $88,000 and $97,600, which is roughly $30,000 less income and a considerably longer list of buyers.
This part still works in our favor. Whatever the paperwork says, the buyer collects both rents once they own it.
| Purchase price | Full payment | Less basement rent | Net monthly cost |
|---|---|---|---|
| $700,000 | $5,056 | $3,000 | $2,056 |
| $750,000 | $5,402 | $3,000 | $2,402 |
| $800,000 | $5,748 | $3,000 | $2,748 |
| $850,000 | $6,095 | $3,000 | $3,095 |
Five percent down, 6.5 percent over thirty years, including taxes, insurance, and mortgage insurance.
Now the comparison that actually sells the house. A plain new three bedroom in Rexburg at $500,000 with nothing to rent costs that same buyer $3,613 a month, all in, and gives them roughly half the square footage, no second kitchen, no income, and a power bill.
At $800,000 the buyer of 180 Church Street pays $2,748 a month to live in a brand new 2,478 square foot ICF home with three bedrooms, three baths, a 635 square foot garage, in-floor heat, and no power bill. The same buyer pays $3,613 for a smaller ordinary house in Rexburg. They are roughly $865 a month better off in the far better home. That is not a cap rate pitch. That is a lifestyle and a payment, and it supports a price an investor never will.
A buyer who wants to pay $800,000 and can qualify for $800,000 still cannot close if the appraisal comes in at $600,000. As a one unit property, three things work against us at once.
You have built something better than what Newdale sells. Appraisers have a word for it, over improvement, and it is the most common reason a new build comes in low. It is not a criticism of the work. It is the opposite. It just means replacement cost on this building has very likely outrun what the local market will pay, and an appraiser is required to follow the market rather than the cost. Before we name a price, we are going to run the same comparable sales search an appraiser would run and tell you what can actually be supported. We would rather hand you that number now than lose a buyer to it in escrow.
An appraisal only sets the ceiling when a bank is involved. There are two ways around it, and both ask you to stay in the deal longer than you want to. We are not recommending either one, but the numbers are large enough that you should see them before you rule them out.
Taking payments with interest instead of a check at closing removes the bank, and with it the appraisal. On this property that is plausibly worth $75,000 to $100,000 of additional price. The cost is that you hold a note for years rather than walking away at closing, and because you built the house the federal seller financing exemptions do not apply if the buyer intends to live there, which narrows it to an investor buyer. Your attorney and your accountant would need to weigh in before this became a plan.
Finished and leased, the building produces roughly $62,400 a year before expenses. Holding it builds a documented rent history and gives a future appraiser something to work with that does not exist today. The cost is that your capital stays in the building and the work of being a landlord stays with you.
You have told us that a clean exit matters more than the last stretch of price, and we think that is a sound call at this stage of things. Say the word at any point and we will price both of the above side by side. Otherwise the plan is a straightforward sale, priced at a number a buyer can actually finance.
We market it as a home that pays for itself, because the payment story is what carries a buyer. But the number we put on it has to be one an appraiser will stand behind, and we do not know that number yet. The comparable sales study comes before the price. Based on what we can see today, the working band is somewhere in the $550,000 to $650,000 range, with the finished version at the upper end and an investor sale near $610,000. Treat that as a range to plan around, not a listing price.
Signed leases still help, though less than they would on a permitted triplex, and one kind of lease would actively cost you money.
It turns your opinion into a fact. A buyer's lender can count that documented rent toward what the buyer qualifies for, and an appraiser filling out a rent schedule has real numbers instead of estimates. It also answers the question every buyer in a town this size asks, which is whether anybody actually wants to live in Newdale.
On a permitted triplex, leases drive the appraised value directly. On a one unit property they do not. The appraiser is required to weight comparable sales over income, so a strong rent roll no longer buys you the appraisal. It helps the buyer. It does not move the ceiling.
This is the part worth remembering. An occupied main level restricts showing access, requires tenant notice under Idaho law, and removes the option for a buyer who wants to occupy it. Leasing the basement units creates neither problem. Rent the basement, and keep the upstairs clean and ready to show.
We are not accountants and this is not tax advice. It is a flag, because one of these choices disappears the moment you close and we would rather raise it early than have you find out afterward.
Because you built this yourselves, your cost basis does not include your own labor. If the hard cost was $450,000 and it sells for $600,000, there may be a taxable gain on the difference even though a great deal of the work was yours. There are also questions your CPA should look at around how the IRS characterizes a property built to sell, and around depreciation, which can apply whether or not it was ever claimed. None of this is unusual. It is just expensive to discover late.
If there is any interest in rolling the proceeds into another property rather than paying tax on the gain, a 1031 exchange has to be set up before closing, through a qualified intermediary. Once you sign and close without one, that option is gone permanently. It is the only item in this document with a deadline you cannot undo, which is why it is here rather than in a footnote.
It is the middle of August. Finishing two apartments and getting them leased would realistically put us on the market somewhere between November and February. That is the weakest window in this county, and it is a poor one for this property in particular: a large unusual home with gravel where the landscaping will go, shown in snow, to a buyer who already has to work to finance it. Our strongest listing season here runs April through July.
That gives you two clean choices rather than a spectrum. List as it stands within the next four to six weeks and take the market while it is still moving, or finish over the winter and launch in April, carrying the property in the meantime. Carrying costs on an empty building run roughly $1,500 to $3,000 a month once taxes, insurance and utilities are counted, so six months of waiting is real money and belongs in the comparison.
The list grew once we worked through the financing, and we would rather ask for all of it now than in pieces. The first two matter most. Everything else on this page stays provisional until we have them.