Rental Properties Are Booming—Here’s How Brokers Can Benefit

The rental property market has become increasingly rewarding for investors, as both interest rates and rising home prices have resulted in higher demand from would-be buyers. Rental pricing continues to grow, often leading to increased margins for rental property operators. On top of this, solid appreciation potential and attractive tax benefits make rental properties some of the best investments on the market. Brokers and lending partners would do well to focus on rental property financing to meet this growing demand and tap into a new market of investor clients. Read on as we explore the trends shaping today’s rental real estate market, and some strategies brokers can use to grow their businesses with this high-demand asset class.

The Rental Market Boom: A Quick Look at the Data

Both rising rents and poor housing affordability have contributed to the boom in the rental market as of late. Baselane reports that 85% of landlords raised rent somewhere between 6-10% in 2024, and 78% plan to increase rents in 2025 by a weighted average of 6.21%. At the same time, most people in the market for a home can’t afford their monthly mortgage due to high interest rates, pushing more people to choose renting over buying. All this means that demand for rental properties and rental financing will remain strong throughout the year, and the brokers that can capitalize on this demand are set to grow their pipelines and businesses.

How Brokers Can Position Themselves for Success

Brokers who take the time to prepare for a variety of investment scenarios are better positioned to win in the coming days. You can win more business by offering a wide range of loan products, from standard 30-year mortgages to DSCR loans and portfolio financing. Offering a variety of diversified loan products prevents you from having too much exposure to the same category and can protect your business from market downturns. At the same time, your clients can appreciate that you are able to solve any one of their financing problems, and you transform into a one-stop shop for borrowers looking to fund investment projects.

Rental Loan Products Brokers Should Know

Let’s take a deeper dive into the various rental property loans you can add to your product offerings:

• 30-year mortgages: these are your standard Fannie Mae and Freddie Mac loans. While they offer attractive interest rates, they also have a longer application process and more restrictions than private loan options. They are great for new investors but will not be a one-size-fits-all solution.

• DSCR loans: offered by private lenders rather than standard banks or credit unions. They generally come with less-stringent criteria since loan approval is based on the Debt-Service Coverage Ratio of the property rather than the borrower’s credit. Loans can be approved faster, and they are also ideal for funding multifamily investments.

• Portfolio loans: designed to help clients finance multiple properties with one loan to consolidate and simplify their monthly payment. Be sure to explore a number of different options from both conventional and private lenders.

Why It Makes Sense to Partner with a Wholesale Lender

Working with private lenders gives brokers access to many benefits which they don’t typically get when working with conventional loan providers. This includes DSCR and portfolio loans designed specifically for rental property investments. Private loans also offer unmatched flexibility, with the ability to fund projects that banks might not be willing to approve loans for. This can also be said for borrower income requirements, as private lenders are more focused on the property being financed than a borrower’s credit score or source of income.

They also offer more scalability for brokers, since it allows you to provide a range of solutions to help you navigate any sort of financing roadblock a client might come to you with. Along with that, wholesale lenders often provide training, marketing resources, and a dedicated support team to help you become a more effective financing partner.

Bonus Tips for Brokers

We want to end with some tips on how to make the most of rental property financing and how you can begin reaching this target market to close more loans. Don’t neglect the power of networking; attend industry events and join real estate investor networks to make solid connections with rental buyers. Be sure to offer free educational services like webinars on rental-related topics to get the conversation started with new clients. This helps position you as an investment advisor, and not just another loan source. Finally, partner with a reputable wholesale lender who offers flexible rental loan products, and take time to ensure they have a proven track record of delivering rental property financing and providing quality service to both their borrowers and financing partners.

RCN Capital

To help your clients maximize the returns on their next investment, partner with 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 investors and lending partners. If you are looking to offer rental property financing to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.