Rental Market Growth In 2020

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Rental Market

The rental market remains one of the most successful niches in the real estate industry. With tenants always on the lookout for a new home or apartment, there’s potential for significant growth as a property owner. Even throughout the pandemic, many people are opting to rent over buying homes, providing owners with increased opportunity to generate additional income. As the demand for rentals increases, many owners are relying on support from property managers to streamline operations.  

What other trends inspired rental market growth in 2020? 

Transformation of Typical Renters

Up until recently, many people rented housing until they were established enough to become homeowners. A large portion of this demographic included young tenants who recently entered the work force. However, a shift in the economy has led to many people considering renting over home ownership. While they may have a desire to own a home, they’re not in the financial position to do so. The pandemic accelerated this trend as many individuals experienced salary cuts or lost their jobs. The industry is now seeing a surge in renters across all age categories, and not just limited to younger generations. 

Extensive technological use

Technology is a large factor inspiring growth in the rental market. With the Covid pandemic causing a lockdown and stay-at-home orders, finding rentals became a challenge. As traditional in-person tours became obsolete, rental owners had to explore other ways to showcase their properties in order to avoid vacancies. 

Fortunately, technology inspired the use of apps and other channels featuring enhanced virtual tours. Despite location, people can now engage with potential landlords virtually. Owners working with property managers avoided this stress altogether by relying on a team to showcase units across social platforms and other online channels. By eliminating these challenges, property owners continued to experience significant growth.  

Rise of Generation Z

Unlike the past generations, Gen Z doesn’t display an immediate desire to own a home. As this generation continues to flood the job market, experts anticipate a significant rise in the rental market. It’s important to note that this generation is tech-oriented, so owners should consider installing tech powering accessories such as Wi-Fi and other smart devices.  

Availability of rental incentives

The pandemic’s impact on the job market has left many individuals unable to afford their rent and mortgage payments. To relieve this burden, some properties are incentivizing tenants with lower rates.  From online payments to discounted lease contracts, this shift is fueling growth. 

Accidental landlords are exiting the market

Reports indicate that in 2020, a large number of accidental landlords exited the rental market. The changes in property laws, such as the increase in taxes, made it particularly difficult to service their rentals. To combat this financial strain, many landlords opted to sell their properties to large real estate companies. Interestingly enough, landlords who remained successful in the market were those working with property management companies. 

Wrapping up

Many trends played a crucial role in the rental market growth in 2020. From technology to lifestyle changes, the pandemic and generational shifts, the demand for rentals increased. With a surge in new renters, owners experienced profitable growth with the help of property managers who were able to navigate the challenges of the previous year. As we look ahead to 2021, how can a property manager like FYVE  help you achieve your goals in renting out your property?

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