Austin has been getting a lot of attention recently for its incredible food, outstanding live music, growing tech sector, and "weird" culture. The city has been featured on a variety of top 10 lists across the country, including best place live, best place to retire, as well as most affordable place to live.
Most recently the Austin rental market was voted as the fifth most affordable in the U.S., based on the average percent of monthly income spent on housing. The survey, conducted by a property management software company called AppFolio, found that Austinites only spend approximately 23 percent of their monthly income while renters in New York and Miami spend 50 percent, making these the two most expensive cities to rent in in the nation.
Austin Rental Market In 2017
Austin's rental market is in high demand with some the country's strongest supply and demand fundamentals and there are no signs of slowing down. Austin's population has been rapidly growing with an impressive influx of millennial job-seekers that are drawn to the city's low cost of living, compared to coastal markets, as well as growth in the internet and technology sectors. It should come as no surprise that Austin has become one of the most desirable metros for renters.
This is what Austin renters can expect to see this year:
Single-family rental vacancies dropping to 3.9 percent
Price of rent increasing by 2 percent
Austin's year-over-year employment growth increasing by 3.6 percent - the highest number in the U.S.
Choosing To Rent In Downtown Or Suburbia
Whether you're already an Austin resident or making the move for a job opportunity, the first decision you'll need to make is whether you want to rent in Downtown Austin or in the suburbs. Take into consideration how you will commute around Austin, how long that commute will take, the cost of your monthly rent, and the convenience of accessing amenities as well as if your needs are better suited for a house or an apartment.
Downtown Austin is the obvious choice for those looking for a short commute along because of its easy access to amenities and entertainment options. However, renters are being enticed by a new wave of suburban living. Developers have been moving towards the trend of constructing mixed-use developments and sub-communities across the greater Austin region. These communities are fully equipped with all of the amenities of downtown living along with impressive new condo buildings and townhomes.
These new developments are addressing the growing rental demand from Austin's population growth as well as providing more jobs opportunities within these mixed use developments, such as The Domain in North Austin. In fact, there are an additional 7,000 units expected to come to market in 2017 alone. There is so much supply in the rental market now that concessions are being offered in an attempt to beat out the competition.
So what does this mean for Austin renters and property managers? To stay competitive, these new buildings are being developed with outstanding amenities such as two-story gyms, fitness studios, yoga studios, and indoor dog washing stations. Additionally, renters are being offered concessions to sweeten their rental deal with a month of free rent or waiving the typically required damage deposit. These concessions are showing some surprising results, it appears as though they are causing the stabilization of Austin's rental market.
Investing In Austin's Rental Market
Austin renters are not the only ones excited about the outlook of the city's rental market, real estate investors are seeing some strong positive as well! With the increasing amount of population and job growth in recent years, Austin has one of the highest population densities for educated millennials, which translates to an all-time high amount of student loan debt, making it difficult for this group to graduate to home ownership.