When you think of the aerospace industry, does Tulsa come to mind? It should, as Tulsa is considered a leader in aerospace, especially since it is home to facilities where American Airlines maintains and overhauls its fleet. But that only begins to describe how important aviation is to the Tulsa economy.
While oil and gas once reigned supreme in this northeast Oklahoma city, Tulsa city officials' prescient diversification of its industry over the past decade has paid off. Tulsa's 70 aerospace companies provide 14,000 jobs while oil and gas, healthcare and manufacturing round out Tulsa's other major industries. This impressive array of economic drivers prompted Bloomberg Businessweek to put Tulsa on its list of the strongest U.S. metro economies.
Residents love Tulsa for its opera, two symphony orchestras, the "center of the universe" and arts district. Perhaps most of all, they love their short commutes - Tulsa boasts the second-shortest commute among major American cities.
Tulsa is popular with property investors for a number of reasons; chief among them is that rental properties here are downright profitable. When real estate information company Zillow researched where landlords make the most money in August 2014, it found that Tulsa landlords make more than their peers in all but two other metropolitan areas.
Q2 2015 Tulsa Rental Market Update
In Q2 2015, Tulsa was the seventh-best Southwestern housing market to own rental properties in and 43rd-best in the country as a whole. Since Q1 2015, Tulsa fell two spots in the Rental Ranking Report's regional rankings for the Southwestern U.S. and 11 spots in the national rankings.
The Tulsa rental real estate market is far from perfect. The local vacancy rate of 10.90 percent was one of the highest in the country in Q2 2015 - a whopping 62 percent higher than the national average. Sluggish job growth appears to be at least partially to blame here; Tulsa only experienced 0.52 percent annual job growth in Q2 2015, about one-fourth the national average for that metric and one of the lowest annual job growth rates in the country during that time period.
Regardless, Tulsa rental real estate can still be a lucrative investment. Tulsa rents jumped an impressive 6.05 percent year-over-year and property values improved by 6.90 percent year-over-year in Q2 2015, increases about 22 percent and 36 percent greater than the respective national averages for those metrics. Tulsa rental real estate also has a stellar 7.79 percent capitalization rate (a metric used to compare annual rents and property values), putting it in the upper quartile in the country for that metric in Q2 2015. Taken together, these real estate statistics indicate that despite not being the hottest market in the U.S., nor even in the Southwestern U.S., Tulsa still offers fairly good opportunities for rental property investors.
Q1 2015 Tulsa Rental Market Update
The Q1 2015 Rental Ranking Report found Tulsa to be the fifth-best market for rental real estate investment in the Southwestern U.S. and 32nd-best in the U.S. as a whole. Tulsa's rental market is most impressive at the moment for its phenomenal six percent year-over-year median rental price appreciation, the 10th-best rental price appreciation in the U.S. last quarter and 121 percent higher than the national average. "T-Town" also had a fairly impressive rental capitalization rate of 8.27 percent, slightly higher than the national average of 7.18 percent.
Tulsa lagged in Q1 2015 for most other metrics tracked by the Rental Ranking Reports. Its vacancy rate, property value appreciation and job growth rate, three metrics commonly used to gauge housing demand, were all significantly below their national averages. However, given Tulsa's rapidly rising rents and solid cap rate, these stats shouldn't dissuade prospective rental real estate investors from moving into or doubling down on the Tulsa housing market.
What data is this Rental Ranking Report based on?
To calculate the statistics found in the Q2 2015 Rental Ranking Report, All Property Management gathered data, including the most recent government housing and jobs data, for 75 metros across the United States. Specifically, we looked at home vacancy, capitalization, home value appreciation and job growth rates, changes in rental prices, and the median number of days properties have been on the market to determine which U.S. metros will give investors the highest returns on rental investments. Click here to learn more about the Rental Ranking metrics.
Should I invest in Tulsa rental property?
Tulsa has a strong rental capitalization rate, 7.79 percent, and experienced eyebrow-raising 6.05 percent annual rental price gains in Q2 2015. What more could a rental real estate investor ask for?
Thinking about renting out a property in Tulsa? Save time, avoid hassle and maximize your rental income by having a professional property management company operate your rental property for you. Click here to get a free quote from a local property manager or call 877-780-4510 to have the All Property Management staff get quotes for you.
All Property Management specializes in connecting rental property owners with professional property managers in communities across the United States. These property managers help set rental rates, advertise properties, screen and manage tenants, collect rent, manage vendor relationships and ensure compliance with local, state and federal housing regulations. They take the hassle and worry out of managing rental properties - all while maximizing rental property owners' rental incomes.