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Why the Florida Rental Market is Growing…

…and why it won’t be stopping anytime soon.

  • 35% of all housing in the United Stated is renter occupied.
  • 1/3 of all renters in the U.S. are under 30 and another 20% of renters are between 30 and 45.
  • Nearly half of all rental property occupants in the U.S. are families – not individuals.
  • Nearly half of all of America’s renters live in SINGLE FAMILY structures

BIG CITY LIFE

As you might guess, the highest ratio of renters in the United State are in large, concentrated cities like New York, Los Angeles, Chicago, Houston, and Philadelphia. In fact, New York City boasts a whopping 50% renter rate, while Florida has about a 12.5% renter rate.

TAMPA BAY, FLORIDA

Those statistics, of course, are lifestyle based and aren’t real indicators on the direction of the Tampa Bay rental market. The Tampa Bay, Florida house rental market is driven by a number of factors that include climate, location, transportation, and employment opportunities.

The area that comprises greater Tampa Bay is a total of 6,515 square miles, with a population increase of 86,000 every year. The average Tampa Bay resident is 42 years old and 35% of the general population is college educated. These are long term residency indicators, which means that Tampa Bay isn’t nearly as transient as other American cities.

Tampa Bay has more than 80 institutions of higher learning and was recently named the 2nd best city for young entrepreneurs. The cost of living is low enough that young entrepreneurs can keep expenses low, making “Cigar City” an ideal place to start a new venture.

Tampa is the craft beer capital of the Southeast with Two Tampa Bay craft brewers ranked among best in the world. Frankly, it’s hard to be a real estate investor and not drink beer once in a while. So, if you’re going to drink beer, why not drink the best?

GROWTH

Tampa increases in population by about 86,000 people annually, over half of which will be renting the first year. That means that at least 43,000 new Tampa Bay area residents will be looking for a home to rent.

Florida is the 5th fastest growing state in the U.S., but has the most consistent growth of any other state in the nationfor the last 60 years! Even better, while Florida has the 4th largest population in the US, it’s still just 11 percent urbanized and 16 percent developed.

At 36.60%, the 2013 household based renter fraction in Tampa was at its highest level. The origin year for the series is 2005.
At 36.60%, the 2013 household based renter fraction in Tampa was at its highest level. The origin year for the series is 2005.

PEOPLE WOULD RATHER RENT

The rational behind rising and falling rental demand has always been that “when rents equal mortgage payments, renters will become buyers“.

In 2006, rental vacancy rates were just 8%, which led to rental property owners raising their rents. That of course led to an immediate increase of vacancy rates, peaking at near 14%, because rent prices were higher than mortgage payments for the same house. So, landlords again dropped their rates and vacancy rates also went down… resulting in a gradual recovery of the rental market.

LONG TERM FREEDOM

Today, buying is once again cheaper than renting, but contrary to the past, rental vacancies are even lower than they were in 2006, and the demand for rentals is still climbing. This of course is a continued repercussion of what happened in 2006 with a growing distrust of banks & government and a desire to be more free. More often, younger people are saying “no” to children & long-term debt and saying “yes” to freedom and travel. Renting is a no-brainer for them.

On the other spectrum, older people (the parents and major influences of younger people) want to shed their long-term debt and relive their carefree youth, so they’re also renting more often.

In fact, buying is now cheaper than renting across the board, in every town & city in the nation, yet demand for rental houses is still increasing.

All of this means that there is PLENTY of room for investor growth in the Florida residential-real-estate-investment market.

Now go buy some houses!

Statistical information for this article was derived from:

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