By Jill Nagy
A mix of millennials and empty nesters are keeping the Saratoga rental market booming.
One area property manager said that the proportion of those renters attracted to new, higher-end, apartments is far higher than the national average of 20 percent.
With rents on new luxury apartments ranging from approximately $1,600 a month for a studio apartment to $3,700 a month for a larger apartment, a significant portion of the apartment market is under-served.
“We are not serving the young professional needing something in the $1,000-a-month range,” said Jason Thomas of Roohan Realty in Saratoga Springs. They have to go to older properties with fewer amenities or, in some cases, join others in similar circumstances to rent a house together.
Be that as it may, Thomas and his colleagues in the business are optimistic.
Peter Rosecrans of Burns Property Management, which has numerous apartments in Saratoga Springs, said “things are going well,” both locally and in the rental industry as a whole. “Members of the millennial generation are really waiting on purchasing a house.”
They are more likely to look for a rental in an urban area with a walkable downtown where they don't have to cook dinner, "walkable safe areas that sort of have a culture," he said.
Although they may be able to buy a home, they are not interested in suburban living, he noted. In some cases, they feel that they cannot afford to buy a house with the amenities they can afford in a rental apartment. They may want granite and stainless, but can't afford it, said Rosencrans.
Another group feeding the boom, Rosecrans and others noted, are "empty nesters."
"They finally got their kids out of the house" and they are tired of paying high school taxes," Rosecrans said. "There is a strong demand for apartments from people selling their houses."
Thompson M. Herrick of Maxwell Property Management, agreed. He said a lot of people moving to Saratoga Springs.
"Saratoga," he said, "is one of the crown jewels of the Capital Region and Saratoga Springs is the crown jewel of Saratoga County."
In addition, first-time home buyers are moving very cautiously and more people are renting because of economic uncertainty.
Thomas sees restlessness as a factor, along with economic considerations.
"Many people don't want to buy because they want to be mobile," he said. People who are new to the area, many drawn by jobs at GlobalFoundries and other new businesses, are not sure they will stay.
Merrick said the typical person who relocated because of a job is reluctant to consider buying.
"They will rent until they know the area and are ready to buy," he said.
Rosecrans predicted that the boom is likely to continue for another five years or so. He sees new luxury properties renting as fast as they can be built. But there is a big gap in the demand for older properties.
Thomas noted, "a couple of projects are not going as well as people have wanted. Other, he said, are doing very well. The difference may be the presence or absence of a "proper kitchen," the size of the apartments, the parking available, nearby shopping, and location.
Rosecrans sees a growing "amenity competition" in the market, including such luxuries as heated dog walks. The "critical" amenities, he said are the ability to make online payments, access to high-speed internet and a good fiber optics infrastructure. Tenants expect things like a fitness center, a community room, outdoor living space, and a pet-friendly environment.
Rosecrans said the list of core basic fundamental needs are: safety, quiet, attractive light fixtures and granite or quartz countertops.
Herrick agreed that Wifi is critical. People also demand generous square footage. Both buyers and renters are looking for something pristine, not a fixer-upper. And, even for people who don't want to cook dinner, a good kitchen is essential, preferably with granite or quartz countertops and lots of stainless steel.
Thomas said "location is key." People want to be within a few blocks of downtown, but not right in downtown. "They want to be able to get on a bike and go downtown or go to SPAC," he said.
He said parking–preferably secure, out of the elements and convenient to the apartment entrance–is also important.
"People don't want to shovel their vehicle out," he said.
With rents approaching $4,000 a month for a two- or three-bedroom apartment, the difference in cost between owning and renting may not be significant. Rosecrans suggested looking at the median home price and then calculating mortgage payments, insurance and taxes. When that figure is close to rental costs, he said, rental occupancy will dip and people will begin to buy.