Rental Affordability Concerns Coming to OKC

[Rhett Tullis]

Ok so I may be wrong as I have been on a few other posts but here is what I see in OKC right now. And before you say it I know that it is worse in many other cities but this is a relatively new thing for the folks in OKC.

Median Income is $55k for a family in OKC.

It is recommended to spend 30% of your income on housing or less which equates to $1375 for all housing expenses including utilities.  The average Oklahoman spends $331 per month on utilities leaving $1075 per month for rent.

There are currently 1110 rentals listed on zillow for rent (this is the main site for real estate listing and leads on rentals in okc)

241 of those homes are listed for 1075 per month or less.

approx. 35% of Oklahoman's rent which equates to 225k people.  if you guess on the low side and say 10% of those are moving right now that means there are 22500 folks looking for housing right now.  (as the median income is 55k that means about 1/2 of the 22500 can only afford $1075 or less in rent)

This means there are approx. 10k fighting over 241 homes in Oklahoma city.  (you can even triple this if you like and say there are 750 homes that fit their needs off market and zillow and it is still worrisome) 

While this is a great thing for an owner with a house listed for rent in this market it does mean bad things in the long run for those same tenants ability to pay and keep up with their rent and other expenses.

It also is foreboding for the owners of the other 869 homes for rent over $1075 per month.  You have and even smaller group looking for your homes at any time as many of those higher income earners are not looking to rent but buy a home and therefore will not be looking at your home.

I am not preaching doom for okc though.  I still like investing in this market I just see where this can get very difficult for lots of middle to low income families.  It may also get uncomfortable for investors thinking they will have plenty of renters looking to pay $1500 plus for rent.  If my numbers are correct the inventory of renters in that price range is small and a large portion of those have the means to buy a home here still if they prefer and can find one.  If they are not able to buy it can at times be due to other financial constraints which again may make them not the "ideal" tenant you are hoping for. 

Feel free to jump in and correct me where I am wrong.