Slow Market Creates Dilemma For Polk County Homeowners

Jon Brock was sure that Polk County’s rental home market would take off, just like property values did nearly two years ago.

In a typical real estate climate, higher Florida home prices drive a greater demand for rental units, he said. But so far, it hasn’t happened.

“It hurts,” said Brock, broker and owner of The Agency, a real estate and property management company in Lakeland. “It should be good but it’s not.”

Renting just isn’t as affordable as apartment complexes and condominium units. Those sectors of the rental market are quite healthy.

Across Florida, about 40 percent of the homes purchased during the peak of the housing boom two years ago were picked up by investors looking to make quick money by turning around and selling the property.

But many investors were caught in a high-stakes version of hot-potato in the latter stages of the boom.

When the market went cold, those investors were left with high interest Florida mortgages, exorbitant tax bills, large monthly payments and no buyers.

Their only options: Rent, refinance or suffer foreclosure.

Selling isn’t usually an option if the investor’s purse strings are tight and time is of the essence, even with Florida mortgage rates low.

Now those rentals have flooded the local market, giving renters a wide selection. But just like in the sales market, if they aren’t priced right the homes will remain vacant.

It’s a problem that property managers and Realtors have been struggling with: Getting investors to ask reasonable prices for their properties.

“The prices (of homes for sale) went so high that the rents were needed to cover the [Florida mortgages],” Brock said. “It hasn’t been an easy time for investors.”

Brock isn’t alone in his frustration with the market. Many other local property managers are having to take different approaches to the rental sector.

“I’ve been doing this for 17 years,” said Dottie Rowe, a Realtor and certified property manager for Alpha Property Management & Rentals Inc. in Auburndale. “For the first time this year, I’ve had people not show up for appointments. It’s a unique market.”

One of the reasons for the sudden problems with rental homes is a sluggish increase in median family income in Polk County.

For 2005, the most recent figures from the U.S. Census Bureau, the median family income was $44,025, a 6 percent increase from $41,442 in 2000.

“Just because it is common for someone to pay an $1,800-a-month rent in their city doesn’t mean that people can pay that here,” Rowe said. “You have to put the tenant’s hat on to view it like them.”

The majority of the problems with renting is with homes that have a price tag of $1,000 or more a month. Anything under that price is renting fast throughout the Central Florida housing market.

Continue reading this article on the Polk County rental market by following our link.