Rent or Buy in Fort Myers, FL


In a tight Fort Myers Florida rental market, landlords have raised rents sharply, shocking even some loyal tenants, and making the idea of buying a home look more attractive.
Rents jumped by $200 or $300 per month or more in some cases with landlords taking advantage of high demand and recouping losses from lower rents charged in the wake of the Great Recession, property managers said.
“At this point the existing multifamily or apartment rental units have the ability to increase the rent simply because the demand has allowed for it,” said David G. Malt, president and owner of Malt Realty & Development, a rental property management and real estate company in Fort Myers.
That has hit many tenants hard, especially when their wages haven’t kept up with price increases.
Rents in South Florida and other places in Florida have exceeded growth in income over the past two years,” said Ralph McLaughlin, a housing economist with Trulia, which tracks real estate listings nationwide.
Last fall, Maria Sanchez’s rent increased from $515 to $700 at Gulfstream Isles Apartments in Fort Myers, and units like hers are now starting at $865. She had been accustomed to past raises in the $30 range.
“While my salary’s staying the same, everything around me’s going up,” said Ms. Sanchez, who is 53. “It’s hard.”
She has rented there for five years and likes the complex itself and the location near work; other family, including her brother Roberto Encarnacion and mother Yolanda, also live in Gulfstream and struggle with higher rents. On her salary, with school loans after going back to be a paralegal, a car payment, and her husband struggling to find steady work, $700 is a limit and $900 seems out of sight.
She searched similar complexes and found prices aren’t much better; although unlike Gulfstream, some have updated accessories such as kitchen countertops and carpets. Gulfstream also recently required all residents to purchase liability insurance, which adds about $10 per month to the bill, telling her most places recently started doing the same.
That may be because the owners of the complex, a national company called Waterton Residential that manages more than 19,000 units, get a discount on its own insurance by requiring it, said Alice Vickers, an attorney and director of the nonprofit Florida Alliance for Consumer Protection. The property manager at Gulfstream didn’t respond to messages requesting information about how rents and insurance costs are calculated.

The big jumps in price aren’t unique to Gulfstream.
Steve Hollister, who runs Twisted Vine Bistro in downtown Fort Myers, has lived at the Oasis condo building with his wife for four years. The rent increased at $50 or $100 increments, then jumped $300 to $2,050 for a threebedroom unit.
“It seems like the rent has gone up and the amenities are going down every year,” he said.
Chris Andruskiewicz has lived at the Franklin Arms Court building in downtown Fort Myers the last six years. A few years ago, her rent increased from $650 to $900, then last year to $950 for her one-bedroom with a den. Her lease is up soon.
“I’m scared to find out how much it’s going to go up,” said Ms. Andruskiewicz, a graphic designer at Florida Weekly. Another co-worker, arts writer Nancy Stetson, recently sought a new rental after prices forced her out of an old one. She found that costs for pets have increased as well.
“Places seem to think that everyone wants a luxury apartment complex,” she wrote in an email, “such as expensive stainless steel appliances and granite countertops... My priorities were: cost, size, location, safety.”
She added, “People keep saying this is paradise, so you should be willing to pay more. But you cannot pay your rent with sunshine.”
For rents in the $900 range, Ms. Sanchez says, she’ll think about buying a house instead. Realtors have jumped on this as a selling point.
“They could own a $200,000 home for what they’re paying in rent,” in some cases, said Ellen C. O’Day, managing broker with Coldwell Banker Residential Real Estate in Punta Gorda.
In South Florida metro areas, Trulia found, buying a home may be up to 55 percent cheaper than renting, a higher percent than anywhere else in the country. That assumes you have excellent credit and stay in the home for at least seven years, among other factors.
High rents may be a factor keeping young people from buying a home, said Trulia economist Mr. McLaughlin.
“In Florida and also places like San Francisco and Los Angeles where rents are high that’s an even larger hurdle to save for a down payment,” he said.
Little relief
Rental prices are determined by a “comprehensive analysis” including operating costs, repairs and market rates, Mr. Malt of Malt Realty explained. The steep increases demanded of some renters are in part a reflection of prices having fallen just as much after the housing crisis in the late 2000s. He believes rents will continue to rise in the next few years.
“I don’t see much change with anticipating some increase, not dramatic, but some increase to rental rates as opposed to decrease or even leveling off,” he said.
After the housing market crashed and construction came to a halt, the rental market surged in the late 2000s, said Randy Thibaut, owner of Land Solutions, a regional real estate company based in Fort Myers.
In addition, young people in their 20s and 30s are holding off on buying a home for various reasons such as going back to school and starting families later or souring on the idea of real estate as an investment.
“It’s clear that a lot of millennials are not buying homes as early or as often,” Mr. Thibaut said.
Now new apartment construction is starting to catch up with demand. Land Solutions has tracked 15 multi-family projects in Lee and Collier County in different stages of development from late to 2014 to March 2015 totaling more than 3,800 units.
But instead of increasing supply and lowering prices it could actually raise rents instead, Mr. Thibaut believes, at least at first, because renters will be covering the cost of new construction. But with housing prices compared to rents becoming favorable, Mr. Thibaut thinks rent prices will start to level off.
“I don’t think you’ll see price level increases,” he said, “Because very clearly people can only afford so much.”
Demand for rentals is still larger than supply, said Michael Depaola, operations manager for Premier Property Management in Naples.
“Rental rates in the last two to three years have gone up about 30 percent,” he said.
Mr. Depaola advises that an average moving cost is around $2,000, so if the increase is say up to $150 a month, consider staying at least one more lease cycle.
“I always tell people if you’re happy where you are now, you know what’s going on, at least you have a year to prepare,” he said.
In some cases, tenants interviewed for this story said they were able to strike a deal with landlords to pay what they can afford at least for a while, but that’s more likely to be successful with a mom-and-pop rental than a multi-family complex where rent policies are less flexible.
“The likelihood of being successful if you’re dealing with a management company with an onsite manager, it’s going to be harder to get them to back off a price,” said Ms. Vickers, the consumer rights attorney. “But there’s certainly no harm in trying.”
And there is no restriction on how much landlords can raise the rent.
“Obviously when you see rises in prices on residential rentals, that means the market is tight and they know they can charge tenets a lot,” she said, adding that Florida is “pretty much a landlord state in terms of our laws. They certainly have the upper hand.” ¦
2015 Rental Housing Wage
>> The hourly wage that a household must earn (working 40 hours a week, 52 weeks a year) in order to afford the Fair Market Rent for a two-bedroom rental unit ($1,012 in Florida), without paying more than 30 percent of their income.
>> Florida: $19.47 >> Charlotte County: $16.42 >> Collier County: $19.04 >> Lee County: $17.23 >> Palm Beach County: $23.19
>> A minimum wage worker in Florida would need to work 77 hours per week to afford a one-bedroom at Fair Market Rent.
— Source: National Low Income Housing Coalition
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