Education and news for smart DIY landlords!
As the world recovers from the COVID-19 pandemic, there's an increasing demand for rent. But in the past year, there's been a lack of available rental properties, driving the increase in rental prices.
This article will discuss whether this trend continues this year and what you can expect to see in the next few months. Here are 5 rental market trends that landlords and property managers should know in 2023.
This year's rental demands will still be increasing as the borders have reopened and more migration takes place. Moreover, many homebuyers opt for rent instead due to rising mortgage expenses and homeownership costs.
Anticipate a wider range of renters this year. Baby boomers now make up a significant portion of renters in the US, and more millennials enter the housing market as renters first. In addition, more families shift to both onsite and work-from-home set-ups, so expect the type of properties that they may want to look for.
The cost of living continues to increase this 2023. And with the lack of rental properties, landlords have the upper hand in rental pricing. In fact, a survey showed only 2.6% of landlords are extremely likely to negotiate with a new renter, with 14.4% being somewhat likely to negotiate.
Ownership costs continue to rise, but more landlords are looking to buy properties rather than sell. Even if around 80% of landlords reported an increased cost in ownership, their gains are still high because they also increase the rent prices.
More individuals are also investing in the rental real estate market. This increasing competition leads property managers to up their game. Landlords are now advised to upgrade their property and services.
The pandemic has pushed most people to migrate from major cities to the suburbs. And while most are returning to the biggest metro cities like New York and Washington DC, an increasing number of renters still choose to stay in the suburban areas to save up this year. Some tenants also look for safer, quieter neighborhoods with larger indoor and outdoor spaces.
Over the past five years, almost every sector has had a digital transformation. Now, nearly all renters look for houses on the internet. Some even reserve a slot without stepping foot on the property itself. This is because of virtual tours available online like 3D tours and drone videos.
Inflation will continue to rise, so most households will continue to have difficulties in budgeting. Landlords and property owners may also have challenges with regard to mortgage rates. Yes, you can always increase the rental price, but it may take a toll on the renters. So, be on the lookout for the incoming months and adjust your marketing strategy to avoid vacancies.
These predictions can help you decide on what adjustments you need this year. But remember that these are only trends and predictions. Things can change immediately in the real estate market. So be ready for any sudden changes and always have a backup plan.