In the last 6 years, home prices in Bozeman have nearly doubled and the median price of a single-family home has remained in the $800K range. As a college town, investing in rental properties is common, and as a vacation destination tourism has driven short-term rental investments in the area. However, with recent changes to Bozeman's short-term rental ordinance and high prices, investing in Bozeman has gotten more difficult.
In 2023 Montana homeowners saw the largest increase in property taxes in our history because of high home values. According to the Department of Revenue, some appraisals increased as much as 40%. Increased property values are great for those who have already invested in a home or rental, but does it mean Bozeman is still a good place to buy?
This has created a substantial amount of wealth for Bozeman property owners and investors. With a rapidly growing population, the value of properties continues to rise, making it an attractive place to invest. Despite a slight market slowdown in 2024, Bozeman remains a promising option for those seeking profitable investment opportunities.
Low supply and increasingly high demand continue to drive the cost of rent higher and higher. In the last 5 years, rent for a 1 bedroom apartment in Bozeman increased by 30% while rent for a two-bedroom apartment increased by more than 60%*. According to a Bozeman Rental Housing Survey conducted in 2014, the vacancy rate for rentals in Bozeman was effectively zero. Since 2014, Bozeman’s population has increased by more than 3,500 people while enrollment at Montana State has increased nearly 8%. With Bozeman’s population growth showing no signs of slowing down, the housing market is struggling to catch up. Bozeman's highly competitive rental market makes investing in Bozeman an appealing alternative. In the past few years, supply has slowly been catching up with new construction of many large developments. The vacancy rate in Bozeman is improving and the average rent according to rentcafe.com is now around $2,217.
These days, with the median price of a single-family home in Bozeman moving above the $800,000 mark, it is nearly impossible for many to invest in a traditional home and get a ROI. This makes multi-family properties a more viable option. As of the spring of 2024 there were 130 condos and townhomes for sale within Bozeman city limits with prices as low as $335,900 and as high as $3,995,000. Click here to see all condos for sale in Bozeman, and click here for townhomes. Other great opportunities for investment in Bozeman are single-family homes with ADU's, duplexes, fourplexes, or complete apartment buildings.
Many people have been priced out of the Bozeman real estate market as the rush to grab a piece of the Bozeman pie drives prices higher and higher. The good news is that there are many affordable alternatives outside of Bozeman.
In Belgrade, the median sale price 24% lower than in Bozeman (this includes single-family, townhomes, and condos). A single-family home has a median sale price of $581,350 and a condo is just over $340,000. Prices are similar in Livingston, Three Forks and Manhattan where prices have increased since 2020, but remain more affordable.
While real estate in these areas may not be quite as lucrative as in Bozeman, as the growth in Gallatin Valley continues to spread property values will also continue to increase.
Click here to see a list of investment properties for sale in Bozeman, Montana.
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