Rental Market Trends For 2020
Knowing current and expected leasing and rental market trends can help landlords and property managers stay ahead of their competition and keep their tenants happy. As a landlord, you should always be interested in finding ways to attract and retain more tenants. Real estate trends vary depending on location. But there are some rental trends that you should look out for no matter where you’re located.
The following are expected to be some of the biggest leasing and rental market trends for 2020.
Affordability is a major concern
Many renters are concerned about affordability. Nearly half who are moving from one community to another area are doing so to seek lower rent, according to Appfolio.
This is especially true in major markets, where rent may be too high when compared to income. Depending on where your properties are located and the income of your typical renters, you may want to make affordability more of a priority.
In-demand, affordable amenities are the way to go
Renters are interested in finding a place to live that offers certain in-unit amenities. According to appfolio.com, many of these aren’t very expensive for landlords and property managers to provide. These include garbage disposals, which more than half of tenants say are mandatory when considering a rental. TV wall mounts, microwaves and in-wall USB ports are also highly valued by renters and are inexpensive for landlords and property managers to provide.
Rent control will spread more widely
Rent control was enacted last year in several high-cost housing states, including Oregon, New York and California, according to The Motley Fool. Experts predict this trend to continue as legislators limit the percentage that landlords can increase their rent in a year.
As more jurisdictions consider imposing rent control, property owners will find it harder to justify investing money in maintenance and upgrades. Renters will ultimately be hurt as owners may reasonably decide to cut down on these expenditures.
The profile of the ‘typical renter’ is evolving
One of the consistent rental market trends of your pool of renters being primarily young is changing. Renters previously tended to be a part of younger generations, with renting seen as a first step taken before moving toward homeownership, according to rentometer.com.
Today, renting is a lifestyle choice for any age, and as a result, landlords and property managers must be prepared to change their marketing and retention tactics accordingly. Young professionals, families and retirees may be included among your target renters, and you can benefit by offering rent prices that appeal to a variety of income levels.
Technology will become more important
As technology plays an increasingly larger role in daily life, it also continues to play a greater role for landlords and property managers. Tech solutions will continue to grow in 2020, according to rentometer, and you can use them to market your properties via apps or the Internet.
Technology can also make many other actions easier, including landlord communications, online rental payments and security and social communities.
Quality of management matters
Dissatisfaction with the quality of management is the second most common reason residents cite for moving to a different property (behind the amount they’re paying for rent), according to appfolio.com. In 2020, it pays to focus on improving your residents’ overall experience since it’s cost-effective and helps you retain more tenants. Seek feedback via surveys and reviews and take action to improve areas that are consistently mentioned.
Also, make sure to check online reviews of your properties. Most renters check these, so it can pay to politely solicit reviews from satisfied renters. If you receive a negative online review, a calm, well-reasoned response can help lessen its impact.
Rent growth is likely to level off
Since wage growth and inflation are expected to level off this year, rent growth is expected to do the same, rentometer.com says. Previously, rent growth has risen at an annual rate of about 2.3 percent since June of last year. But low mortgage interest rates should lead to rents holding fairly steady in 2020.
For landlords and property managers, it pays to keep track of the latest rental market trends affecting property rentals and leasing. This can help you make sure you’re providing the marketing, rent prices, amenities and management quality that your clients are looking for.