Orlando rents increase as more millennials consider home buying

Orlando renters in large apartment complexes are paying $107 more on average per month than a year ago, according to a national analyst — and that coincides with a rise in millennials buying homes.

Orlando’s 8.4 percent increase in rent doubles the national average and tops RentCafe’s list for the 20 biggest U.S. markets in complexes with 50 or more units. Those rents came in at an average of $1,387, bringing them within $18 of RentCafe’s national average.

Rising rents are part of the reason millennials are buying more homes than they did in the recent past, said broker associate Dusty Sutton of Keller Williams at the Parks in Orlando. But their interest in homeownership started before rent began to skyrocket, she said.

“That’s what’s been pushing the market,” Sutton said. “First-time homebuyers are millennials; that’s who’s buying. That’s why anything in downtown Orlando under $400,000 is getting multiple offers.”

Some of it is just a rite of passage that long has existed in real estate, she said, as apartment life becomes tiresome.

But rent increases can make it cheaper to own.

“When it gets to the point where they can buy and finance, and have a mortgage that’s less than what they’d be paying in rent, that’s definitely going to be a factor,” she said.

Some become do-it-yourselfers, while others are “keeping the yard men busy,” while finding more fun ways to spend their time, Sutton said.

“I find on [neighborhood app] NextDoor, a lot of people are asking, ‘who knows a handyman?’ ” she said.

Overall, Central Florida landlords large and small are getting an average of $1,266, according to industry analyst ALN Data. That’s a 7.7 percent yearly increase despite a slight drop in occupancy of 0.2 percent since June 2017.

Part of the drop in occupancy stems from new units. The region including Dr. Phillips, Orlando International Airport and Hunter’s Creek has 3,963 units being built, according to ALN Data, with another 3,499 in Kissimmee and another 2,716 in downtown Orlando.

Two-bedroom apartments in RentCafe’s survey posted the highest year-over-year increase at 9.2 percent to reach $1,415, while studios without a bedroom drew the largest monthly increase at 2.5 percent to reach $1,009.

Only the smaller market of Hollywood in South Florida topped Orlando’s year-over-year increase, at 9.6 percent to reach an average of $1,444.

As RentCafe’s national average rent reached an all-time high of $1,405 in June, a 2.9 percent rise since June 2017, increases were seen in 88 percent of the 250 biggest cities in the country. The survey measures data from real estate analyst Yardi Matrix that checks apartment buildings with 50 or more units in the nation’s 250 largest cities.

One bit of relief in Orlando: 4 percent of landlords made concessions in June, according to ALN Data, which averaged 5.3 percent of the asking price.

Landlords who keep tenants happy can be a key reason not to buy, Sutton said.

“A lot of times, mom-and-pop landlords are not as expensive,” she said. “It could affect a decision not to buy if they’re happy with repairs, and feel like they’re getting a fair price with what they’re renting.”