The best place to build a rental property is in a town or city with a shortage of rental properties and high rent prices. The ideal investment destination for real estate investors is one with a young population and almost unlimited job opportunities. This helps to ensure that prospective tenants are not only employed but also able to pay rent without defaulting. Oklahoma City, Oklahoma, is considered one of the best investment destinations for rental property developers. Keep reading to find out why is Oklahoma City is a great rental market for investors.
Brief Overview of Oklahoma City as a Rental Market
Oklahoma City is home to 681,000 residents, but the greater metropolitan area is home to over 1.4 million people. The city has one of the lowest unemployment rates in the country and one of the most robust job markets. In the last decade, over 330,000 new jobs were created in the Oklahoma metropolitan area. Property prices are high, while the supply is low. As a result, 40% of residents prefer to rent rather than own a home. This makes Oklahoma City a great rental market.
Importance of Professional Property Management Services
Managing a rental property is not a walk in the park. Many DIY landlords often end up deciding to hire a professional to help them manage their properties. For starters, the tenant screening and selection process is a task that requires great skill, a lot of time, and important tools. Most landlords are not equipped to screen tenants. Evictions can also expose landlords to legal liabilities. That is why it is good to hire a professional to manage rental properties.
What Makes Oklahoma City a Great Rental Property Market?
I. Favorable Demographics
Oklahoma City is a great investment destination for rental properties for many reasons. Below are a few of the reasons:
A. Population growth in Oklahoma City
The population in Oklahoma City has been growing at a rate that’s three times the population growth rate of Oklahoma State. The rate is nearly two times the average population growth of the United States. This means that there is a huge demand for new homes and rental units.
1. Influx of new residents from other states
Recently, the number of people who are relocating to Oklahoma City from nearby states has been on the rise. Millennials have been moving to Oklahoma City in search of employment opportunities, and they need a place to stay. This is what has led to a spike in demand for rental properties.
2. Growing demand for rental properties
The latest industry statistics show a huge gap between the supply and demand of rental units. There is a growing demand for quality rental units, but the number of units being constructed cannot match the demand. This presents a wonderful opportunity for real estate investors.
B. Age distribution in the city
Before investors can decide to invest in a given area, they usually look at the age distribution of the population in the city.
1. High percentage of young professionals
Oklahoma City is home to a youthful population, with around 63% of the population falling between the age of 18-65 years. This means that more than half of the population is within working age, so they can rent homes. Out of the 63%, around 38% are below 44 years. These young professionals usually look for rental properties because of the shortage of homes for sale as well as high property prices.
2. Increased need for quality rentals
The demand for quality rentals can be attributed to two key factors. The first is the high influx of a youthful population in the city who are looking for places to stay. Secondly, there is a shortage of properties for sale. These properties usually come with exorbitant price tags.
II. Job Growth Trends in Oklahoma City
As the population of Oklahoma City continues to grow faster than the state and national averages, so does the jobs market. It is estimated that over 330,000 new jobs were created in the last 10 years within the metropolitan area.
A. Diverse economy with various industries driving growth
Oklahoma City has a diverse economy. From hosting the headquarters of two Fortune 500 companies, Devon Energy and Chesapeake Energy, to healthcare and aerospace, Oklahoma City is an attractive investment destination for all.
Boeing Corporation recently expanded its manufacturing plant in Oklahoma City. AT&T, The Hertz Corporation, Sonic Corporation, OU Medicine, and American Fidelity Insurance are examples of major businesses that operate in Oklahoma City.
B. Impact on rental demand due to job opportunities
As the number of job opportunities increases in Oklahoma City, there will be an influx of young workers from around Oklahoma and surrounding states. This will further increase the demand for rental properties.
III. Affordability Factors in the Rental Market
Oklahoma City is a popular destination because it has a moderately-low cost of living.
A. Comparatively lower cost of living than other major cities
Compared to the city of Chicago and Los Angeles, Oklahoma City is comparatively cheaper to live in. The cost of living in Chicago is $2,372 for one person compared to $2,079 in Oklahoma City. On the other hand, the cost of living in the City of Angels is $2,975.
B. Higher average rent prices compared to national average
Oklahoma City has higher rental prices than other cities of similar sizes. Rental rates in the city are higher than the national average.
1. Potential higher returns on investment for property owners
Real estate investors can take advantage of the huge demand for rental properties in Oklahoma City and high rental rates to generate maximum returns from their real estate investments.
IV. Professional Property Management Services in Oklahoma City
The best way for real estate investors to maximize their returns and ensure their properties are well taken care of is to hire a property manager. Professional property managers usually take up the responsibilities of property owners, so they can take good care of your property and provide you with a consistent passive income.
A.Benefits of using a professional property manager
1. Maintenance and repairs coordination
A property inspection, maintenance, and repairs should be coordinated well to ensure cost-effectiveness and reduce tenant disruptions. Property managers know how best to coordinate repairs and maintenance.
2. Tenant screening and selection process
Screening of tenants together with tenant selection are two of the most important services offered by property managers. These professionals have access to tools and resources that are not available to the average person, so they can carry out effective tenant screening.
3. Rent collection and financial reporting
Property managers usually provide tenants with different modes of rent payment. After collecting rent, they usually forward the proceeds to the client on a specific date. They also generate financial reports to boost transparency.
B.Creating a positive experience for landlords and tenants
Tenant-landlord relationships can be complicated at times. Tenants always want repairs handled immediately, but they may not be able to pay rent on time consistently. On the other hand, landlords do not want to have rent defaulters on their properties. A property manager can help create a positive experience for both landlords and tenants.
1. Communication and conflict resolution
They provide multiple channels of communication and help with conflict resolution while shielding the client at the same time.
2. Ensuring compliance with local rental regulations
Property managers are aware of all local regulations, ordinances, and laws, so they can help landlords to achieve legal compliance and ensure the property is compliant at all times.
