Monday, September 17, 2018

It's a perfect time to be a slumlord in Orlando

Posted By on Mon, Sep 17, 2018 at 1:04 PM

click to enlarge PHOTO VIA ADOBE IMAGES
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With rising home prices and slumping sales, Orlando is one of the best cities in Florida right now to really take renters to the cleaners.

According to new report from Forbes, Orlando joined the ranks of other ideal slumlord markets in Florida like Tampa and Jacksonville because, well, essentially we have a population of low-paid workers who are priced out of their housing market, which is something we've reported on extensively.

From Forbes:
In terms of both employment and population growth, Orlando really outshines. From summer 2017 to 2018, employment increased 4.3%, which is almost three times the U.S. average growth rate. Its population surged by 14% from 2013 to 2018.

The most common employment sectors for those who live in Orlando are accommodation and food service (12.3%), which includes workers of Orlando’s world-class resorts like Disney World and Universal Studios Orlando. Second most common sector is healthcare and social assistance (11.9%), followed by retail trade (11%)."

Rents grew 2.3% in the last year, which is well ahead of the U.S. overall growth rate. Rent yield in Orlando is markedly higher than in most other cities. Comparatively low home prices combine with relatively higher rent prices to create a city that is especially suitable to owning rental property.
As cheery as this report comes off for anyone looking for an exciting new rental property, Orlando's affordable housing problem isn't something to brag about.

The "rent yield" is higher in Orlando because renters don't have much choice. According to a recent report from real estate website Zillow, in the second quarter of 2018 nearly half of Orlando paid over 31.5 percent of their income on housing, and lower income workers (who this report is referring to) are spending a staggering 63.7 percent their wages.

This Forbes report only makes more sense when you compare it to today's August housing report from the Orlando Regional Realtor Association, which stated that Orlando home sales were down 5.8 percent compared to August 2017, and the total number of available homes also dropped by 10.2 percent.

"Like across much of the country, sales are sliding in Orlando as would-be buyers are either priced out of the market or are deciding to postpone their search until more homes come on the market," said ORRA President Lou Nimkoff, Brio Real Estate Services LLC.

This, along with the facts that 1) the City Beautiful is projected to have 50 percent fewer available apartments by the end of the year and 2) last quarter, Orlando's job growth was led entirely by low-paying service gigs, mean it's safe to say it's a great time to royally fuck over some renters.

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