location, location, location

Houston lists among 5 U.S. cities where renters pay most for prime location

Houston lists among 5 cities where renters pay most for prime location

Houston, Highrise apartment views_May 2015, Skyhouse Houston
Houstonians pay top dollar for highly desirable locales.  Photo by RentCafe.com

In the world of real estate, as the old adage goes, three things are most important: location, location, location. That’s especially true here, where a new study finds that Houston is one of the top five cities where renters pay more than 50 percent more for a top-rated location.

Apartment rental blog RentCafe and Yardi Matrix looked at the difference in the average rent price between a rental in a top location versus a rental in a less desirable location in 50 U.S. cities. In the top 10 U.S. cities with the biggest rental gap between best and worst locales, Houston comes in at No. 4, while Dallas comes in at No. 8.

According to the RentCafe metrics, the average apartment rent for a top-rated location in Houston is $1,426, while the rent for a low-rated location is $910. That’s a price difference of $516, and 56.7 percent.

In Dallas, the average apartment rent for a top-rated location is $1,481, while the rent for a low-rated location is $1015, for a price difference of $466, or 45.9 percent.

The two Texas cities come in considerably higher in location disparity than the national average, where the average rent charged by top-rated locations is $1,655, which is 37 percent more than the average rent of $1,211 charged in lower-rated locations — a difference of $444 per month. 

The RentCafe study defines top-rated apartments as "in or near central neighborhoods (although not always), which also happen to overlap with most cities’ central business districts with high concentrations of jobs, as well as more entertainment, shopping, and dining within walking distance."

The study used apartment community location ratings defined by Yardi Matrix and rents from apartment communities of 50 units or more. RentCafe also surveyed 2,015 U.S. renters about their rental preferences. 

The survey finds that young renters prioritize being close to work and school. A clear majority of Generation Z renters (64 percent) want to live close to work/university, and for almost 30 percent of millennials, work/university is the first choice of location.

Houston renters who spend more for a good location can take solace in one key finding. According to the survey, rents in top locations are higher but increase slower than less-than-ideal locations.