Multiple factors contribute to increased demand for rental housing
Monday, August 20, 2012
If there's one business that has actually improved with the economic recession, it may be the rental industry, as more people are looking to rent apartments rather than buy homes.
Growth of the university population, major expansions at area hospitals and construction of the Isle of Capri Casino in Cape Girardeau have also given a boost to the rental industry, says Dave Soto, owner of Soto Property Solutions and president of the Cape Girardeau County Board of Realtors.
"Our occupancy rate right now is about 94 percent, which is pretty good," says Soto. That high occupancy rate means the vacancy rate is low, creating a "growing demand" for rental properties, says Soto.
"There is a lot of business going on right now," he says. "There's a lot of new talent coming into the hospitals and the university, and they're looking for rental properties." Soto has rented to a number of tenants in upper-level management jobs, as well as those involved in construction and development of the casino set to open this fall.
Wade Hartle, property manager for the brand-new Enclave Apartments on Sena Fawn Drive in Cape Girardeau, is also seeing an increased demand for rental housing. Hartle oversees 48 two-bedroom units and more than 20 one-bedroom units in five buildings near the intersection of Lexington Avenue and Sprigg Street. He has additional apartments down the road near his mini storage units.
"We have a nice mixture of some college students, some young professionals just starting out in their careers and several older folks who wanted to get out of a situation where they're maintaining a home," says Hartle. "We just finished one (building), and we're getting ready to build another one. The owner basically said as soon as the last one was built and occupied he wanted to start another one. The last one was full before we were even finished with it."
Hartle is aware that more apartment buildings are under construction near Southeast Missouri State University, including a three-story, 36-unit building at 547 Olive St., according to city building permits. Still, the demand at Enclave Apartments has not lessened.
"From the calls I get every day it seems like there is a demand. I think more people are moving to Cape, and the college is also a big factor. We're also getting calls from people who will be working at the new casino," says Hartle.
This month marked the completion of a $1.4 million 10-unit apartment complex for residents with mental illness in Cape Girardeau. The Boehme-Hinni Apartments at 549 N. Silver Springs Road were built by the Community Counseling Center with grant funds it received from the U. S. Department of Housing and Urban Development, according to the Southeast Missourian.
Additionally, MACO Development is revising plans for a large apartment complex for seniors at the north end of Silver Springs Road near Spruce Street in Cape Girardeau. Jason Maddox, MACO's executive vice president, told the Southeast Missourian there is a need for more senior housing in the Cape Girardeau area. MACO has built three such senior apartment complexes in the past, and there is a waiting list 80 names long.
When it comes to standard rental property, though, Soto believes the apartment boom is probably temporary, and that once the economy improves and settles down, people who are renting now will be ready to buy.
"Home sales are pretty good, but there are still a lot of people who are not ready to buy yet and are looking for someplace to rent," says Soto. "We have a lot of families looking for three-bedroom houses -- three-bedroom houses go in a heartbeat. We have a couple homeowners who decided not to sell, but to rent instead."
Some of Soto's tenants rent because they sold their house and don't have another place lined up, or because they bought a house and aren't ready to move into it yet.
"It's kind of a mixed bag. The economy has affected the business in that people are coming to us in hardship, then disappearing because they can't find the money to rent," says Soto. "Our business is doing pretty good. We do have struggles with late payments, but we do a pretty good job of filling the vacancies. We do background checks and find good tenants."