Manatee ranks 14th in national baby boomer rental study

mjohnson@bradenton.comJuly 13, 2014 

MANATEE -- Baby boomers love renting homes in Manatee and Sarasota counties. The same can be said for a lot of places in Florida --

Fifteen, to be exact.

It's no secret that the generation born between 1945 and 1964 has been moving to Florida for years, whether to buy retirement homes or to spend part of the year in vacation homes. But what has changed during the past six years is that boomers are driving the rental market in much the same way that they've fueled home sales.

According to new statistics produced by online housing data provider RealtyTrac, Manatee County is ranked as the 14th best, boomer-heavy place in the nation to get a great return on a three-bedroom rental home. Sarasota County ranked 15th. In all, Florida counties took 15 of the top 25 spots in the statistical survey.

That Florida is a popular place for the 50ish- and 60ish-set to rent comes as no surprise to local rental property managers. In the wake of a housing market crash and recession that stripped many boomers of their investment portfolios and homes, renting in the Sunshine State is a way to achieve a desired lifestyle without the risk of buying.

"Once they leave the working world behind, they are going somewhere the sun shines and the weather is nice," said Tom Heatherman, a spokesman for the residential property management division of Saraso

ta real estate brokerage Michael Saunders & Co.

For its survey, RealtyTrac looked at counties where at least 24 percent of the population fell into the baby boomer generation, and where that segment had increased as a percentage of the total population by at least 10 percent between 2007 and 2013. In Manatee County, 20.8 percent of the 324,834-person population falls within the boomer age range. In Sarasota County, 30.4 percent of 380,479 residents are boomers.

Charlotte County has the highest Florida percentage of boomers in the RealtyTrac data, at 32.9.

For property owners looking to rent apartments, condominiums and homes, the boomers are a target audience. Barbara Mayo, broker and co-owner of the Bradenton rental management company Home Rentals of Manatee, said boomers want to rent in communities that have active-living amenities, and often seek out gated neighborhoods.

Responding to the demand, investors including Blackstone Group, Colony American Homes and Beazer Pre-Owned Homes have bought hundreds of homes in Manatee County, particularly in the Lakewood Ranch area.

Recession-weary clientele

With this ready supply of well-appointed housing on the rental market, the temporary nature of renting has appealed to people who got caught up in the housing crash.

"Some of them went through short sales and foreclosures on their homes," Mayo said. "They think that it may not be in their interests to purchase right away."

Or ever. Scott MacBeth, a 67-year-old stockbroker and teacher, has rented a four-bedroom, 2,300-square-foot house with a swimming pool in Bradenton's The Inlets development for the past six years.

He doesn't want to expose himself to the risk of ownership. He said he has lived through three housing crashes, and doesn't know anyone in his circle of friends who isn't underwater on a mortgage.

Add homeowners association fees, home repairs and the cost of flood insurance into the equation, and MacBeth can't imagine affording a home as nice as the one he's renting.

"Why should I own?" said MacBeth, who has moved to Florida three times since first leaving his hometown of Ithaca, N.Y. to attend college at the University of Miami.

For landlords, having long-term renters can help pay down a mortgage, especially where there are high concentrations of boomers. The average gross yield on a three-bedroom rental in Manatee County is 10.85 percent, putting it well into the top half of 370 counties for which RealtyTrac generated overall rental statistics. The data showed that counties with high numbers of baby boomers generally gave a better return on rental property investment than those with small boomer populations.

Gross rental yield is a calculation of what percentage of a home's purchase price can be charged in annual rent.

The Manatee County percentage is based on the April 2014 median home price of $149,000 and average monthly rent for a three-bedroom property, $1,355.

Sarasota County notched a rate of 10.49 percent. Pasco County brought in the state's best yield for boomer counties at 20.93 percent.

A profitable rental climate has management companies including Mayo's seeing almost no available single-family homes for rent and a "less than average" number of condos for rent. That comes even as growth in rentals accelerates, dging up from a national average of 3.2 percent annual growth in April 2013 to 3.4 percent a year later, according to the Dallas-based rental data company Axiometrics.

Boomers rebounding

Improvements in the stock market have helped boomers' finances rebound. That means members of the post-World War II generation are out house shopping again as they look to buy the perfect Florida home, says Heatherman at Michael Saunders.

They have more choice now: Manatee County's inventory of single-family homes has jumped more than 29 percent since last year, according to Multiple Listing Service data.

Temptation to buy could even lure MacBeth into the buyer's market. While he loves where he lives now, his girlfriend, Emma Menendez, makes a good case for ownership. An interior designer, she is limited in how she can express her style in the couple's rental home. She can't even paint the interior walls.

"That's the other side of renting," MacBeth admitted.

If MacBeth and Menendez do wind up as buyers, there will likely be plenty of boomer renters to replace them. Both Manatee and Sarasota counties saw the percentage of boomers in the population grow by more than 20 percent during the RealtyTrac statistical period.

Those renters will likely have to pay more for their homes, too: Rents are increasing 4 to 7 percent annually, according to Mayo.

Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027, or on Twitter @MattAtBradenton.

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