Why rentals over $1400 per month are difficult in OKC

[Rhett Tullis]

This recent article got me thinking a bit more about our market here.

https://www.marketwatch.com/story/renting-is-more-affordable-than-buying-in-47-of-these-housing-markets-and-they-tend-to-have-one-thing-in-common-2020-01-10

Currently there are 2476 homes for rent in the OKC Metro for less than $1400 per month.  There are 496 listed for rent for over $1400 per month.  As you can see the "meat" of the market here is under $1400 per month.

While there are plenty of folks that can afford to pay $1400 per month here the bigger question is why would they do it?  

The median house price in OKC Metro is $137998.  If you were to purchase such a home your loan payments would typically be in the ballpark of $650 per month.  The rent on a typical home of this price in order for an investor to "make money" and feel it is a good investment would need to be around $1400 per month. (I know I will get feedback on this and yes you can make money on this if you have appreciation but in okc overall that is very low.)

This brings us back to the Why pay that much for rent in OKC?

In other markets in larger cities your purchase price would be much higher so the answer is easy it is cheaper to rent than buy but here in OKC the opposite is true.

The reasons we see folks rent the higher end homes in okc are several

-bad credit/low on funds.  

-building a new home and need a place until done

-in town for short or limited time and need a place without the worry of selling in the near future.

(as you can see the first bullet is not the type of tenant we dream of and the second 2 are short term ones generally which do not help your bottom line.)

I think this in a nutshell explains why many out of state investors come in hoping to make money on their rental and are then sadly disappointed when it sits vacant for long periods of time.  

We manage many rentals that rent for over the $1400 mark but I will tell you that is not what most folks that call us everyday are looking to spend on their next home here in OKC.  

I guess my main point is that rentals for over $1400 per month in OKC Metro are not the bulk of our market and certainly challenging.  They do rent and it does work for many but it is not as easy as in a larger city, mainly due to the cost of living/cost of a home here in our little town.

Please let me know if there is something I am missing in my thoughts I look forward to any response I get.