2025 Rental Market Trends Every Broker Should Know

The rental real estate market has consistently provided healthy returns to investors, on top of offering other advantages like appreciation and tax benefits which help make it the most popular real estate strategy. 2025 is shaping up to be a pivotal year for long-term rental investments, with interest rates changes, home supply, and shifting demographics sure to have major impacts on the industry. As a broker or wholesale lending partner, keeping up with these shifts is crucial as it helps you offer better, more relevant advice to your clients.

Continue reading as we break down some of the key rental market trends that will affect the market this year, and how you can stay competitive considering these changes.

1. The Suburban Shift is Still Going Strong – But It's Evolving

One of the most significant trends to come out of the pandemic era is the migration of young professionals from urban centers to secondary and tertiary markets, including suburban areas. With the rise of remote working, living close to the office has become less of a concern for many workers. Instead, the affordability of homes in areas which still have significant draw factors has taken center stage. As a broker, focusing on identifying these markets and providing financing solutions for the investors targeting them will help you expand your pipeline and grow your business.

2. Rising Rents, Slowing Appreciation

Rental rates have continued to rise in many markets in recent years, but this has had another effect on rental properties as well. Home appreciation is cooling, to the level where homes are neither gaining nor losing value but instead remaining at the same level. As a result, investors have been focusing on the cash flow potential of investments rather than equity gains over time.

For brokers, this means emphasizing opportunities to acquire properties with high cash flow, and matching investors with financing like DSCR programs, where cash flow matters more than a borrower’s income.

3. The Built-to-Rent (BTR) Boom

Real estate markets across the US are still experiencing a lack of home supply, and this presents a great opportunity for new construction investors. Build-to-rent investments have grown in popularity, especially in family-friendly areas offering residents good amenities. These homes are in high demand not only because they are new but also because of their location. As a result, they can fetch high rental prices and have extremely attractive cap rates. As a broker or wholesale lending partner, you can help investors conduct due diligence to identify markets ideal for these investments and connect them with construction lenders that offer construction-to-permanent loan programs.

4. DSCR and Alternative Lending Options are Taking Over

While conventional financing methods like mortgages offer attractive interest rates, qualifying for one is becoming more difficult as loan criteria tighten. As a result, investors are turning to DSCR and other asset-based lending options. These loans offer borrowers a way to finance properties without the limitations of conventional financing, and they can still qualify for a loan with less-than-ideal credit or non-W-2 income.

Staying educated on alternative financing options like fix and flip loans, bridge loans, and portfolio loans will become crucial for brokers in the coming year. Offering a wide range of lending options also lets you reach more clients, and you can position your brokerage as a one-stop shop for financing solutions.

5. Tenant Expectations Are Changing

Today’s renters have higher standards, but that also means that well-maintained properties with included features are in high demand. Investors would do well to make property improvements that appeal to tenants and encourage good retention. Brokers play a key role here, helping clients understand how the quality of the property impacts financing and investment returns. Guide them in choosing upgrades that will improve cash flow at little cost. Focusing on improvements to high-traffic areas like the kitchen, living room, and bathrooms will yield the best returns.

Bonus tip: Advise clients to perform property upgrades before seeking out financing to secure the best terms.

6. Growing Insurance Costs Drive Rental Demand Up

Many potential homebuyers are being priced out of the market due to rising insurance costs and instead choosing to rent. In certain markets, this has driven up rental demand, especially for single-family units in suburban areas. These homes have great investment potential, and as a broker you can help clients identify suitable properties and markets to invest in. It is also important you stay up to date on the changes in these markets, so you can offer the most relevant advice to your clients.

RCN Capital

The best way to save on a real estate investment is to obtain financing from a lender that can provide you with the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate professionals. If you are looking to finance a rental property investment, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.