If you’re curious about how your rental business will change with the market in the next few years, you aren’t the only one. Renters are asking questions too. Despite government assistance programs for renters during the pandemic, renters want to know if rent prices will become more affordable as house prices soar.
Unfortunately, no one can predict the future of the rental housing market. However, we can make strong predictions by monitoring fluctuations in house prices, average renter wages, and competitor rent prices.
Based on these factors and others, here are six rental market trends to look out for in the next few years.
1. Rental Market Boom
As we approach summer 2022, the rental market continues to experience rapid growth. Renting is an increasingly attractive housing option as the cost to purchase a house rises.
This means there will likely be an increase in supply, more property acquisitions, and higher prices across the country.
The growing popularity of renting in the U.S. also means that more short-term renters will consider becoming long-term by renewing their leases. For many renters, buying a home and paying off a mortgage simply isn’t an attainable goal in the current economic climate.
So, what does all this mean for landlords? To stay level with your competitors, you may need to match their prices. Also, consider upgrades and renovations that suit renters’ changing needs. For instance, long-term renters who weren’t expecting to stay long may appreciate better or different amenities once they decide to stay.
2. Higher Income
The average wage for renters is increasing alongside rent prices. Not all tenants rent because they can’t afford another accommodation. Many people (especially Millennials and senior citizens) enjoy the freedoms and lifestyle that renting offers.
As these individuals flourish in the workplace or retire after successful careers, many will seek stable rental housing instead of taking on a mortgage.
Higher income means you can still offer affordable housing to renters while making a substantial profit and offering your competitors a real challenge.
3. Work-from-Home Tenants
Even with the end of lockdown requirements, many employees still work from home. Remote employees are cheaper for businesses, more convenient for workers, and allow companies to hire from all over the country. It’s not surprising that many tenants plan to continue to work from home in the coming years.
Tenants who work from home have slightly different needs than tenants with in-office positions. For example, remote-work tenants need quiet, private areas to work in and outside of their rentals. They also need outdoor spaces or trails to get outside and high-speed internet, which is required for working remotely.
One way to adapt to the shifting rental market is to continue to accommodate WFH tenants in your rentals.
4. Demand for Property Managers
Landlords who acquire hundreds of units often can’t manage them independently. If you are a large landlord or have another day job, you need a property manager to handle day-to-day tenant management.
However, property management companies are growing at a slower rate than the demand for them. This means you’ll need to rely on software management and integrative tech solutions to keep your rental business afloat during growth surges.
5. Smart Rentals
Technology is always a bonus in a rental property. In 2022, many renters are looking for high-tech apartments equipped with the latest applications in smart technology.
This includes smart locks, thermostats, appliances, video doorbells, and other features.
One way to attract highly qualified renters in the next few years is to install smart home technology. Not only is smart tech an eye-catching feature with advertising potential, but it also prioritizes safety, security, and sustainability in your rentals.
6. Demand for Software Management
As mentioned, the rental market boom has increased the demand for property management software. If you don’t already use software, you will soon learn how it can help you manage your company’s growth as you try to keep up with screening, maintenance, taxes, and more.
Using software can also help you save money. If you’re on the fence about hiring a property manager, consider trying a free property management software platform. You might realize that with software automation of your accounting and communication, you don’t need any extra hands.
How Will You Manage Your Rental Business’s Growth?
If the above trends continue, chances are that your business will experience growth in the next few years. How will you prepare? By thinking about your ideal tenants, adapting to the needs of today’s renters, and using property management software, your business will be well equipped to face whatever the future holds for renting.