Renter Crunch

According to a recent report by Harvard’s Joint Center for Housing Studies more than half the renters nationwide are having a tough time coming up with the rent.  It is generally accepted that one’s housing costs should be around 30% of one’s monthly income.  Today’s renters are spending closer to 50% of their total monthly income on rent.  At ALPS, Inc. we generally use the rule of 33% of one’s income as a qualifying guide, and in most instances our applicants meet that criterion, and if they don’t generally we won’t rent to them.  Nationwide the reason is that rents have and are continuing to outpace wages.  I don’t think that this is the general case in the Austin area, but it does seem that those coming into our area to rent housing are making “a very good wage.  Did you know that 53% of the Austin population rents?  Granted that includes about 42,000 UT students who are mainly renters but that still is a lot of renters.  Our situation is a bit different than most other parts of the country.  We also have a large part of our population who are young millennials and older folks, and both groups contribute significantly to our rental base.  I don’t see this trend changing much in the near future so us investors in Austin area residential real estate can continue to enjoy the benefits of that investment while providing housing needs.

Rick Ebert / Austin, Texas / 10 Dec 15