Trends and Opportunities in Long-Term Rental Investing

The tried and true method of operating rental properties is still incredibly effective for building long-term wealth. There are lucrative opportunities available to investors across the nation, provided that they’re willing to put in the work to find them. By identifying and utilizing trends in the rental market, investors can also significantly boost their returns. Knowing how to identify these trends is another story. In this piece, we’ll cover the ways investors can make use of the trends and opportunities in the rental real estate market to find success.

Start with a Current Market Analysis

You can get a pretty good idea of the health of a real estate market by taking a look at some key indicators. By obtaining accurate data on population and job growth, you can determine whether an area is expanding or shrinking. Similarly, you can take a look at rent and vacancy trends to see if prices are going up or down, or if there is a high volume of vacant properties in the area. From there, you can compare the numbers for different markets to help you decide which one will make for a better investment.

Bonus Tip: An area experiencing significant infrastructure development can be a sign of rapid growth, and a timely investment in one of these areas can have a huge pay off.

Growing Housing Costs

The combination of rising interest rates and high property values means more and more people are choosing to rent over owning a home. For the high-demand markets that feature expensive properties, you may notice a significant increase in rental pricing and a decrease in vacancy rates. This presents a unique opportunity for you as an investor to benefit from the growing demand for rental housing. Consider doing some market research to identify some of these high-demand areas, as it can lead to significant investment returns.

As a result of high property values pricing people out of their markets, many are choosing to move to different areas which has led to some newly emerging markets. Investing in one of these emerging markets can also be a very wise move. Remember that you don’t have to limit yourself to markets near you. You can manage a rental remotely by hiring a property manager who will take care of day-to-day operations, leaving you to focus on your investment strategy.

Multifamily Properties

A great opportunity in the rental real estate space is multifamily properties. Multifamily homes often have a higher entry price, but they make up for it with higher cap rates and a greater potential for appreciation. Multifamily properties are generally easier to manage than multiple single-family homes, and they are more suitable for third party management. On top of this, multifamily rentals are less impacted by vacancies since they have multiple sources of rental income to compensate for the lost revenue.

Technology Integration

Another growing trend in the real estate industry is the integration of technology into the home. The new demographic of renters expect a certain level of features in their homes, and this often means some form of smart technology. If you’re looking to implement technology into your existing rental property, some good low-cost options include smart thermometers, smart locks/security systems, and doorbell cameras. Many of these features can be controlled remotely and in the case of smart thermometers, they can even save you money. These features can also become marketable selling points when you are trying to fill vacancies in your property.

Sustainability and Energy Efficiency

Sustainable construction and eco-friendly features are becoming increasingly important to both renters and homeowners. An easy way to implement these features into an existing property is by replacing older, less efficient lighting and appliances with newer and more efficient options. Replacing older windows is also a relatively cost-effective move as it can bring significant monthly energy savings. If you want to take things one step further, consider investing in solar panels as they can increase your property’s value while also saving you money. Just like the smart-home features, these upgrades can also become selling points in your listing when advertising the property to potential renters.

Flexible Spaces

The pandemic trend of remote working has not slowed down, with around 22 million employed adults working entirely from home in the U.S. This trend has also changed the way we view rooms in our homes, with many looking for flexible spaces that can easily be converted into a home office. If you can take time to renovate your property to include one of these spaces, you may be able to attract a wider audience of renters. These spaces can also serve a variety of purposes like being turned into a crafting station, or even just providing extra storage space.

Real estate investing rewards those who are willing to plan and implement some creative solutions to boost their investment returns. By utilizing the trends we covered, and highlighting them in your listing to potential renters, you may stand to benefit greatly. The great thing about owning a rental property is you have control over your investment’s success. There are many opportunities in our space, and you can be rewarded with a strong return if you’re able to find one of them.

RCN Capital

The easiest way to save on rental property financing is to find a trusted lender that can get you 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. RCN Capital also has flexible and competitive loan options available. Are you looking to purchase or refinance an investment property?