The expansion of Alphabet Inc (NASDAQ:GOOGL)’s Google Fiber might contribute to rising rent by as much as 11% in apartments where the service will be offered.
Researchers suggest that the expansion of Google Fiber might be responsible for escalating rent rates. This because the houses in the areas that offer Google Fiber are in high demand as people seek to experience the high-speed internet service. Landlords will, therefore, take advantage of this appeal for their property to earn extra cash by increasing the rent. The study reports that high-speed internet is one of the most important amenities sought after by tenants.
The research claims that the rent in areas offering high-speed internet services has increased by as much as 11%. It highlights the demand for internet especially from a demography of people who spend most of their time online. Most of these people stream videos online to cater for their entertainment needs, and some of them use the high-speed internet for online gaming. The introduction of Google Fiber is therefore expected to provoke similar results.
The Bay Area is one of the places that Google has been planning to launch its Google Fiber services, and if the conclusion of the report is correct, the rent rates in the area will spike. The service is already available in some areas including Austin, Atlanta, Kansas City and Provo. Salt Lake City, San Francisco, San Antonio and Charlotte are some of the areas that have been targeted to receive Google Fiber. The latter has been considered a game changer because it offers speeds reaching 1 Gigabit per second which is ten times higher than the average broadband speeds offered in the market.
The study seems to support that the majority of the users interested in the service are millennials.