Real Estate Journal Online

In Midland, Texas, if you want to rent a home then you may have to get on the waiting list. In fact, you may not even be able to get a hotel room while you wait, reports one local apartment association member, Alex Garcia, as “all over the city the occupancy levels are at 98 to 100 percent.” While the area typically experiences hikes in leasing activity during summer months, Garcia notes that in early April leasing activity is already at peak levels matching those of summer 2008[1]. Historically Midland and other locales in the region have experienced lulls in rental activity followed by spikes as oil industry activity, a major employment contributor in the area, rises and falls. This year, however, with more rigs and a rising population, there does not appear to be any rental relief for would-be tenants on the horizon.

And the demand is not just for apartments; it is for rental homes as well. There were only 15 homes available for rent in the entire Midland area as of last Tuesday. Demand is also driving prices up, with the average rental rate for a one-bedroom in 2006 logged at $410; the average rent for the same apartment in 2010 logging in at $670 and rates expected to go higher this year.

Interestingly, one apartment manager has stated publicly that building more apartments will not ease the situation because higher rents in newer complexes make those complexes unattractive. Do you think that this is a situation in which a savvy real estate investor might consider new construction anyway?

Let us know if this looks like an opportunity to you.

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[1] http://www.mywesttexas.com/top_stories/article_00cc2657-fa2e-5aae-9bc9-f457c8e925ab.html#axzz1IwbQd558