Charlotte’s rents are on the rise, which is great news for landlords, but not such great news for tenants. According to Apartment List, the Charlotte area had the second highest rental rate jump in the state last year just behind Wilmington. The 5.1% increase from March 2016 brings the median rent for a 2 bedroom unit to $1,210. To put that in perspective, the state had a yearly increase of 4.2% and the nation as a whole only increased by 2.4%.
If you look at numbers produced by Zumper, median rent on a two bedroom unit was $1,270. Based on their figures, that is an 8.5% jump for the year and 3.3% up from the previous month. Zumper lists Charlotte in a tie for 25th most expensive metro area in the country.
This means that a tenant would need to make more money to keep their same quality of life as rents increase. According to Zillow, they would need to make an extra $384 annually. This 0.7% increase in median salary would allow a tenant to pay rent and still have the same amount of disposable income. Zillow pegs the median rental rate in Charlotte at $1,248. According to their predictions, rents will rise around $32 per month to $1,280 by this time next year.
If the Fed increases interest rates again, which is predicted to happen two more times this year, these additional costs could be passed along to tenants in the form of rate hikes as well. These figures also don’t take into account any other increases a tenant might have aside from rent so they could feel the squeeze from higher healthcare costs, higher grocery bills, or a host of other factors.
The Charlotte population is on the rise so there is plenty of interest in new rental units. In fact, Charlotte just topped the entire nation with the most rental units added in the first quarter of this year. Charlotte added 9,347 units for a 5.9% increase. This topped the 100 largest metro areas in the country. These numbers, from MPF Research, are encouraging and are well above the 1.8% national average.
Zillow predicts that there could be a slow-down of rent appreciation in hot markets like New York and San Francisco. It will be a welcome change for those areas, and could signal a change countrywide. There has been a push in most major metropolitan areas to add more affordable housing options to ease the affordability crisis. Charlotte is no exception to that trend. Affordable units are part of many of the newly announced uptown projects.
If you are interested in an investment property so that you can add a passive income stream, call us at (704) 525-4045. If you are done renting and want to purchase a home of your own, call us at (704) 525-4045. To view listings on our website, click here.