Thirteen Cities Where Single-Family Rents Are Skyrocketing

Most Popular Reply

Alex Chin
Seattle, WA · Member since 2015 · 500 posts · 243 votes
11y

@Josh Caldwell - without looking at the data, I bet that rents in Ames, Iowa were really low and that 22% increase is something like median rents going from $400 => $500.

2Reply
See this reply in the discussion

16 Replies

Jump to latestLatest
  • Josh Caldwell
    Investor · Dallas TX, United States · Member since 2014 · 1k+ posts · 1k+ votes
    11y

    Good to know, Iowa seems strange on that list.  I wonder what I am missing in Iowa?

    0Reply
  • Alex Chin
    Seattle, WA · Member since 2015 · 500 posts · 243 votes
    11y

    @Josh Caldwell - without looking at the data, I bet that rents in Ames, Iowa were really low and that 22% increase is something like median rents going from $400 => $500.

    2Reply
  • Lonnie Pickard
    Wholesaler · Brighton, IA · Member since 2013 · 98 posts · 25 votes
    11y

    The average rent for a 3 bdrm. in Iowa City is approx. $1300/mo  and last time I checked, Des Moines was around $950.

    0Reply
  • Geoffrey Hoffman
    Real Estate Agent from Cleveland, OH · Cleveland, OH · Member since 2015 · 45 posts · 26 votes
    11y

    I think that many insurance companies are based in Des Moines?  I recently had a client in Cleveland who was relocated to Des Moines and she told me the housing market is really moving.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    I can vouch for Portland... this is also fueling the first time home buyer as our median price home payments are less than rent... and we are not an area that has a huge portion of the population credit challenged  great time to be in the PDX market in all phases.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    2Reply
  • Ray Mulli
    Investor · Minneapolis, MN · Member since 2014 · 133 posts · 29 votes
    11y

    @Josh Caldwell,

    This is what you are missing about Ames, Iowa: Industrial Property Tax Exemption – The Ames City Council has approved an ordinance for a partial exemption from property tax of the actual value added to real estate by the new construction of industrial real estate, research facilities, warehouses, owner-operated cattle facilities, and distribution centers. The amount of actual value added that is eligible to be exempt from taxation is as follows: Year 1, 75%; Year 2, 60%; Year 3, 45%; Year 5, 15%. Applications are filed with the Ames City Assessor and must be submitted by February 1 after the year of construction. Companies may file for prior approval.

    (Source, City of Ames). 

    Helps when city leaders are forward looking. :)

    1Reply
  • Andrew D.
    Investor · Cedar Rapids, IA · Member since 2014 · 71 posts · 38 votes
    11y

    I have seen quite an increase in rent prices in the Cedar Rapids area.  I generally try to keep rents stable for my long term renters but when I do have a vacancy I'm seeing a sizable rent increase.  At least 10%.  I just keep an eye on Craigslist and Facebook to see what comparable houses are going for and price accordingly.

    1Reply
  • Glenn McCrorey
    Investor · Cedar Rapids, IA · Member since 2013 · 494 posts · 407 votes
    11y

    @Andrew D.  I also look at the websites of property managers like Epic Property Management to see what they have and what they are asking for rent.  Rents are strong in Iowa but don't tell anyone.  

    2Reply
  • Hersh M.
    OP
    Engineer · Carlsbad/San Diego · Member since 2014 · 285 posts · 97 votes
    11y

    Out of curiosity, I was just looking at a few SFHs in Des Moines. 

    It looks to me that the 1% rule is still being met on majority of those but not the 2% rule. 

    Also for some of the homes, the prices haven't changed over the last few years but I saw a few where there was about 20% rise since 2012. 

    I know these are very broad generalizations but would you guys who are investing in Iowa agree with this assessment? And are you still buying aggressively? 

    0Reply
  • Andrew D.
    Investor · Cedar Rapids, IA · Member since 2014 · 71 posts · 38 votes
    11y

    @Glenn McCrorey Yeah lets just just keep that to ourselves!  I've seen Epic listings and they seem sky high but it seems like they're getting them rented.  Of course house prices are going up here to so it looks like 2009 till 2014 was the right time to buy.  I really haven't seen any good deals around lately compared to the good ole days.

    0Reply
  • Glenn McCrorey
    Investor · Cedar Rapids, IA · Member since 2013 · 494 posts · 407 votes
    11y

    @Andrew D.  I am closing on my first house of the year next week and have a few irons in the fire but that's OK.  My golf handicap has been coming down nicely.

    0Reply
  • Glenn McCrorey
    Investor · Cedar Rapids, IA · Member since 2013 · 494 posts · 407 votes
    11y

    @Hersh M. Aimes, IA is where Iowa State University is located.  Des Moines is where one third of Iowans live 1M of the 3M.  Cedar Rapids has Rockwell Collins which employs about 9K workers in CR and surrounding areas, they are the second largest private employer in the state behind a grocery store chain Hy-Vee.  The grocery store jobs are spread all over the state and I'm sure Rockwell's average salary is much higher.

    1Reply
  • Thomas Fosnaugh
    Investor · Marion, IA · Member since 2014 · 45 posts · 20 votes
    11y

    We just re-rented a couple units with nice rent increases in Marion a lot faster than I thought we would.  We've had a more dramatic increase in our larger/higher price point units (2-3 BR, 1-1.5 Bath) as opposed to our 2 Bed 1 Bath apts.

    Hospital jobs seem to have a big economic effect throughout Eastern IA as well.

    1Reply
  • Account Closed
    Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
    11y

    So let's put our investor hats on and run some numbers.  Let's compare the San Francisco and the San Antonio markets since both have the same increase.  Let's call it 12%.  

    Since San Francisco has about the best rent-to-price ratio, say .5%, then on that 12% increase of rents ($3,000 pretty typical rent) then the property has increased in value.  $3,000 X .12=$360 rent increase / .005 PTR ratio is $72,000 increase in equity.  That's $6,000 a MONTH!!

    San Antonio?  Here I'm guessing a bit, feel free to offer better numbers. 2% price-to-rent ratio, yeah kinda sucks, 1,500 rent X .12=$180 rent increase / .02 PTR ratio is ONLY $9,000 increase in equity.  That's $750 a month.  As much as that sucks you'll at least be happy come property tax time at least while you're writing the check.  

    SF taxes are protected on the $72,000 by Prop 13 so that's all equity in your equity bank.

    SF  $72,000 + $4320 rents= $76,320

    SA     9,000 + $2160 rents= $11,160  Plus possible tax increase.

    You'd have to own almost 7 SA houses to match SF but then you'd have all the additional expenses of roofs and other CapEx.

    2Reply
  • Andrew D.
    Investor · Cedar Rapids, IA · Member since 2014 · 71 posts · 38 votes
    11y

    @Glenn McCrorey I've got 2 so far this year with 2 more closing in the next month.  I'm still in the growing stage and trying to expand.  These aren't quite the deals I was finding back in 2010 thru 2013 but they'll cash flow well enough.

    0Reply
  • Sylvia B.
    Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
    11y

    From the linked article:
    "Sixty percent of low-income renters spend more than 50 percent of their income on rent, according to a report in May from New York University’s Furman Center."

    Apparently a whole lot of landlords aren't following the 'income must be 3x rent' rule.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free