Feeling the rental gap

Matthew Strother

May 31, 2014

This is the first part in a series examining rentals in Troup County. This installment focuses on the availability of rental houses and pricing.

There is an apparent gap in available rental homes in Troup County, a divide that rental agencies say is caused by more demand for rental homes.

However, renters have complained that it’s not necessarily a lack or availability of homes, it’s a lack of quality housing in price ranges affordable to those of modest to low income. Houses available under $500 tend to be found more in high-crime areas and in poor conditions, while the apparent gap leaves the next best option homes that rent for $900 per month or more, something in the range of someone earning at least $36,000 per year.

Renter woes

The Daily News asked through social media whether readers felt local rentals were affordable, and their thoughts on the quality and availability of rentals. Here are some of the responses:

Rent is “affordable, but most affordable places are in bad neighborhoods, or are already rented out,” commented Ashley Evans. “And a majority of the really decent houses are expensive, and the realtor agencies are really strict. So basically you can’t win for losing. … If you can’t afford anything over 500-600 a month, then you will probably get stuck living in a sketchy neighborhood. Which is sad. Most decent places, in nice neighborhoods are 700 and up. Which is kinda hard to afford these days.”

“One problem that I see is the affordable homes in Troup County have very poor insulation,” commented Anna Kirkpatrick. “If you want a house that has proper insulation, your rent is going to be pretty high. For example, we’re renting a home for 775 right now (3 bed, 2 bath), and our power bill has never been below 300 dollars. I’d like to see some affordable and sustainable homes, but that’s wishful thinking.”

“The way I see this rental situation here is there is not enough homes in decent neighborhoods that people can afford,” commented Sandy Hill. “I would much like to have a nice family rent my house for less affordable rent than to make it so high people can’t pay the rent and have to keep moving. Also … the rental companies are too strict. If you don’t have perfect credit you can forget it, but they don’t look at why your credit score is low, which is silly to me anyway because if I had perfect credit I would be living in my own house not trying to rent one from you. Just because you’re poor don’t make you a bad person.”

Cherise Costley agreed with many others that finding a decent rental price on property in a good neighborhood. She added that she used to work for a rental company.

“I can say from experience, that it would probably shock you with the amount of money it takes to get some of these apartments back in order when the resident has done an extreme amount of damage,” commented Costley. “We can only HOPE to recoup that money and while SOME do pay their balance, the damage to the housing is still done and it is very hard to correct that damage. We simply have to try to recoup that money. Just simply maintaining the properties is extremely expensive as well.”

Other commenters said the rising crime rate in LaGrange makes rentals in many areas undesirable, because finding “safe” neighborhoods is becoming harder.

Availability and setting price

The Daily News reached out to several rental agencies in the area to get their take on the availability of rentals in Troup County, and how prices are set. The main point all agents agreed was a factor for deciding price: the old real-estate agent adage “location, location, location.”

Steve Daniel, a broker with Coldwell-Banker in LaGrange, said rental prices overall have gone up in the area. He said the increases seemed to be after the announcement of Kia’s location in West Point and the ensuing suppliers locating in the area, where a surge of rentals was expected.

A rush of people coming into the area did create a higher demand for rentals, especially in the sought-after $500 to $700 per month range. It also pushed higher prices on more premium rentals sought by executives who wanted to locate a home here, Daniel said.

“We had a lot of people that moved to our area and, with the economy being what it was nationwide, they came from other states and had trouble selling their homes in other states when they moved here,” Daniel said. ” … They may have a home in another state, but they rent because of the way things have been. The economy has not quite caught back up, with people not catching up with the equity in their homes.”

Other renters may be potential first-time home buyers who may not have the credit or money for down payment, Daniel said.

According to recent information from the National Association of Realtors, only about 27 percent of the market is first-time home buyers, compared to about 40 percent previously. Not as many people are buying homes because of increases in down payments and standards needed to get a home loan.

“For folks in rentals and homes, the market has been good,” Daniel said. “We’re blessed in that respect, but we would like to see it get back to the American dream where people want to own a home. I think it changed where a lot of first-time home buyers, the standards and restrictions that have been put on them - we’d like it to get back to where it was.”

Bill Mallory, president of Mallory Realty, which owns and manages rental properties in Troup County, said what is considered fair rent is subjective to each person, but he tries to base prices on location, property value and amenities. He said a potential renter recently told Mallory he had been paying about $650 per month for a place in a nice area of Atlanta, but Mallory noted areas in that price range are now hard to find locally.

“People are looking for quality rental property,” Mallory said. “Sometimes there’s just not enough to go around. I always just try to price (rentals) at what I feel is fair, based on the location of the property.”

Mallory noted increased property taxes have also lead to inflation on property values. Owners of properties may also request an increase on rent to cover their additional expenses.

Finding a home in the median price range and in a good area is hard, but not impossible.

“That’s sort of where people have to pick and choose,” Daniel said. “… You can find a three-bedroom, two-bathroom house that would be $650 per month in a pretty good neighborhood, but it’s not going to last long. They’re gonna go quick. There’s not a lot of properties like that out there.”

Stephen King, property manager for Spinks and Yates, echoed that rentals in the $500 to $800 range go quickly and are in high demand.

“Things start to slow down above about $1,200,” he said. “That’s a more narrow market. Anything below that I can rent fairly easily.”

“We have a shortage right now of better-quality properties. That goes for everybody,” Mallory said. “Some properties are harder to rent than others, and that probably has to do with location. Other properties are very desirable, but with a set rental price that you have to accept.”

Mallory noted that for owners of rental properties, the investment in the property can be expensive. In addition to the cost of general maintenance, when tenants move out, cleaning and refurbishing a home costs money. There is also the risk of having to repair damage by tenants, even theft of appliances and furniture.

“A lot of people come in and rent property for six months or less, but only stay for three months, then they disappear,” Mallory said. “We go back into the house, find out everything has been destroyed. We have to paint the walls, lay new carpet, new linoleum, fix busted floors and walls, change locks out. There’s a myriad of things that we can get involved with that’s taking money away from our pockets.”