Apartment Rental Prices in the US
Rents in the US grew 2.5% nationally last year, but many experts are warning of a flattened growth curve this year. Yet the story for investors may not be national rental market stats, but rather the best cities offering the best demographics, average income and strong growth trends.
Are you looking to find an apartment to rent in another city in 2018? Or are you a property investor or property manager looking for new apartment rental properties? The report below will give renters a good perspective on rents in their city and offer property investors some insight on the cities with the best rental investment returns.
While renters want the lowest rent possible on the best apartments available, investors are keenly interested in the best cities where the rents are highest.
And the promise of big returns is what drives the construction of beautiful new apartment condominium developments. The current economic boom is encouraging new growth in apartment construction.
The market is on track to deliver over 250,000 new units in Reis’ top 82 markets in 2017, the highest level of new-supply growth since the late 1980s -excerpt from multifamilyexecutive.com report.
We’ll introduce you to some more property statistical resources too throughout this post. It’s important to have reliable stats and to hear different views on where the apartment rental market is going in 2019 to 2020. This should be helpful info for anyone looking to grow their property portfolio and grow their investment income. See our reports on Hawaii, California, and Arizona.
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The National Outlook for Apartment Rentals
Several data collection and forecasting sources believe 2018 will be a flat year for apartment rental prices, just as they believe housing prices will remain flat. Given the growth of the US economy and GDP, employment trends, and demographic shifts happening, it’s difficult to sit on the flatline forecast for long.
Demand for Aparment Rentals is Sure to Rise: Urban Institute
This quote from Urban Institute tells us that demand will only grow. There forecast of apartment rentals show renters will exceed owners by 4 million.
Our analysis projects that from 2010 to 2030, the growth in rental households will exceed that of homeowners by 4 million, with an increase of 13 million rental households and 9 million homeowner households. That’s five renters for every three homeowners. Compared with the previous 20 years, the increase in homeowners was almost twice that of renters, even with the housing crash: 8.8 million new rental households and 16.1 million new homeowner households. — from blog post on urban.org.
Which Cities will Have the Youngest Population of Renters?
As this chart shows, cities with the youngest renters have the most potential renters. However, average household income and apartment property prices will determine whether they’re a good bet for the next 5 to ten years for investors. Texas, Utah, and California are the most youthful states.
|3||New Brunswick, NJ||24||$38,400|
|5||College Station, TX||25||$33,400|
|6||West Jordan, UT||25||$69,400|
|17||Huntington Park, CA||27||$36,400|
|22||Santa Ana, CA||27||$53,300|
|25||West Valley City, UT||27||$52,800|
|San Francisco, CA||39||$78,400|
|Source: US Census Bureau|
Why Will Apartment Rents Rise?
While price trends have trended lower in the last 6 months, here’s 8 reasons why rents will likely rise int he next two years:
- renters income rising faster than rent prices
- demand growing from Millennials and incoming Generation Z
- more renters now compared to those who own homes
- many hot city markets have real estate prices too high for many to buy
- construction starts not keeping up with demand
- interest rates rising causing some mortgage holders to sell
- population is more mobile hence may not want to buy a home/condo
- % of cost-burdened renters in the U.S. still high at 49.7%
- credit is tight
If apartment rental prices do remain flat for 2018 nationally, there are still cities that are growing fast and therefore demand and prices should continue to rise in them.
Investors should key in on specific neighborhoods and cities to find rental apartment property worthy of investing in. There’s still room for capital gains in these cities.
Apartment Rents 2018
As this chart from Apartment List shows, apartment rents have leveled off for many months now. We’ve seen this lull in home prices too. The market might be trying to figure out where it’s headed for the next few years.
With moderate inflation and high demand from young renters, and demand from older affluent renters, it is difficult to support a lower rental price in the best growing cities in Texas, California, and Florida.
As you can see in this graphic below courtesy of Apartment List, some cities are enjoying phenomenal growth. Definitely worth investigating the sources/factors in why they are the highest peforming cities for apartment rental.
Cities with the Best Rental Price Potential
|City||Average Rent Price|
|New York, New York||$4,100|
|Buffalo, New York||$1,000|
|Corpus Christi, Texas||$970|
|Kansas City, Missouri||$940|
|Fort Wayne, Indiana||$730|
|St. Paul, Minnesota||$1,400|
|St. Louis, Missouri||$880|
|st louis, missouri||$880|
|Jersey City, New Jersey||$2,800|
|El Paso, Texas||$750|
|Greensboro, North Carolina||$840|
|Fort Worth, Texas||$1,050|
|Fort Lauderdale, Fl||$1,800|
|New Orleans, Louisiana||$1,090|
|San Antonio, Texas||$1000|
|Charlotte, North Carolina||$1,150|
|Durham, North Carolina||$1,100|
|Oklahoma City, Oklahoma||$740|
|Raleigh, North Carolina||$1,100|
|Raleigh, North Carolina||$1,100|
|Newark, New Jersey||$1,150|
|Albuquerque, New Mexico||$840|
|Virginia Beach, Virginia||$1,100|
|Las Vegas, Nevada||$970|
|Colorado Springs, Colorado||$1,060|
|Las Vegas, Nevada||$960|
|Washington, District of Columbia||$2,100|
|Salt Lake City||$1,100|
|Santa Ana, California||$1,800|
|Los Angeles, California||$2,300|
|San Diego, California||$2,000|
|Chula Vista, California||$1,600|
|Long Beach, California||$1,800|
|San Francisco, California||$3,400|
|San Jose, California||$2,600|
|Santa Clara, California||$2,700|
|San Mateo, CA||$3,000|
We’ll be updating this post frequently to add apartment rental data and opportunities in future. Please bookmark!
Investing in the right cities is a lot like choosing the best rental management software technology to manage it. For small portfolio managers, a simple, efficient solution makes your workload easier.
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See also: Best Real Estate Investment |Apartments for Rent | Renters Insurance | 2018 Rental Housing Market | Property Investing in Texas | How to Reduce Tenant Vacancy | Property Management Solution | Tenant Screening Service | Improve Property Revenue | Improve Property Cash Flow | Property Management Issues | Tax Savings for Property Managers | Real Estate Portfolio Tips | Starting a Property Management Business | How to Use Property Software | Best Property Management Software