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How many landlords are there in Seattle?
Hello, and thank you for asking about the number of landlords in Seattle. The short answer is that there are approximately 41,861 mom-and-pop landlords in Seattle. A summary of my methodology and findings follows.
METHODOLOGY
To best answer your question, I searched government and housing industry databases and reports, as well as articles that address the Seattle rental market and "mom-and-pop" landlords overall. I learned that Seattle's Department of Construction and Inspections requires landlords to register all rental units in the city, and registrations must be renewed every 5 years. The office classifies the size of properties according to the number of rental units (1-4 units, 5-9 units, and 10 or more units), but does not provide any statistical data regarding landlords.
I was able to estimate the number of landlords in Seattle by using census data and national landlord statistics. I then calculated the share of landlords owning 1-5 rental properties.
FINDINGS
The Seattle rental market is growing, with 10,000 new market-rate apartments scheduled to open this year. These apartments are largely a result of the city's construction boom and is transforming neighborhoods through the addition of many "cookie-cutter" apartments in large complexes.
Seattle's rents have grown faster than any other U.S. city, with a 9.7% growth rate year-over-year for 2016 vs. 2015. As a result of the increased supply, rental rates are expected to moderate this year, with increases anticipated to be in the 5-6% range. Demand for rentals has increased primarily due to two factors: an influx of out-of-towners moving to Seattle's for jobs (particularly millennials taking jobs in the tech sector), and local residents who are not able to afford to purchase homes due to rising prices. (The median home price in Seattle is $414,000).
Of Washington State's total population, 35.41% are renters, and specifically in Seattle, the annual share of real estate sales to non-occupiers reached a high of 23% in 2013. According to statistics published by the National Multifamily Housing Council (NMHC), the number of apartments in Seattle in 2015 was 117,457.
INVESTORS AS LANDLORDS
Smaller investors have identified rental real estate as an attractive investment. For those who have already paid off the mortgages on the homes in which they live, rental properties are gaining popularity as a way to save for retirement. Traditional savings vehicles such as CDs, savings accounts, and money markets are generating minimal returns. Therefore, savers are turning to real estate as a means for boosting their nest eggs and creating potential revenue streams in retirement.
Institutional investors began pulling back on the purchase of rental properties in 2014 as housing costs bounced back from the lows of 2009-2013. Smaller investors (many of the Baby Boomers) have been stepping in to fill the gap. In 2016, the number of smaller, mom-and-pop investors in the U.S. rental market hit a high of 37% of all properties bought during that year. Seventy-nine percent of these mom-and-pop landlords own 1-2 rental properties, and and additional 8% own 3-5 rental units. Adding the two together (79% + 8%) indicates that 87% of U.S. landlords own 1-5 properties.
CALCULATIONS
Pre-compiled figures for mom-and-pop (1-5 units) landlords is not available. However, I was able to calculate an estimate as follows:
U.S. Data:
Number of Landlords with 1-5 rental units:
There are approximately 41,861 mom-and-pop landlords in Seattle.
CONCLUSION
To wrap up, there are approximately 41,861 mom-and-pop landlords in Seattle. These landlords are primarily Baby Boomers who are looking for better investment opportunities than traditional vehicles, and are seeking to improve their returns as they prepare for retirement.
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