Wednesday, 4 January 2012

Florida Rents Show Steady Growth

While Florida real estate prices have been something of a roller coaster, rents tell a different story and show consistent growth over time.
Take for example this graph of Tampa “Fair Market Rents” used for the purpose of calculating housing allowance from 1983 to present (Link to base data)

Analysis of the base data shows more consistent growth than the chart: The apparent “fall off” in 2006 is not due to decreasing rents but to changing the basis for the calculation (from the 50th to the 40th percentile).
While HUD projects a drop of over 3% in 2012 our experience has been the opposite with the same units renting for 5% more today than they did just last summer. One explanation is that the units we are renting are considerably more expensive than the 40th percentile rents represented by the chart.

In running credit checks on prospective tenants we have noted that a large number of residents could well afford to buy the units they are living in. The demand for higher end rentals is extremely strong, particularly in the larger units. 

This luxury TH rented for $1,650 on the day we closed: December  29th, 2011.