Renting out property has always been, and continues to be, profitable. When managed properly, your rental property is a good source of steady income.

But there's a caveat - landlords have had to adapt, as discerning tenants expect them to stay in step with societal changes. To remain relevant in the competitive world of property rental, you must stay informed about new trends in the market, and adapt accordingly.

Here are 6 must-know facts for landlords in evolving rental landscapes.

 

1. Shifting Rental Market Trends

Rental market trends are echoes of the shifts in society at large. They affect everything from rental prices to tenant expectations. This is clearly illustrated by the move towards more remote work opportunities. It has led to tenants wanting more flexible leases, not only in the US but also worldwide.

However, shifting rental market trends can also be more relevant to specific locations, so stay up-to-date with local trends. For example, if you're in San Jose, the Rental Market Blog for San Jose offers a detailed analysis of how rental trends affect your area.

 

2. Legal and Regulatory Changes

Stay informed about rental law and regulation updates, particularly on rent control, eviction procedures, and tenants' rights. Recent noteworthy updates include the Biden-Harris administration's blueprint for a Renter's Bill of Rights, and their proposed actions to promote rental affordability.

Rental laws can also differ slightly from one state or region to the next. Compliance with local laws and regulations will help you avoid costly legal issues, so stay informed, and stay compliant.

 

3. Technology Integration

As technology advances, its influence is felt everywhere, including the property rental market. One of the simplest changes you can make is to start using property management software.

Today's landlords use this to reduce the admin burden and automate processes including tenant screening, rent collection, and maintenance scheduling. If you're not using property management software yet, there are countless tools online to choose from.

And that's not the only way technology can help you. Recent innovations in smart home technology have influenced tenant expectations in the property rental market.

If you don't want your properties to be seen as outdated, introduce a few smart devices. They give even the most basic rental unit a modern appeal. Don't stress if you don't know where to start. We have some great tips for retrofitting an apartment into a smart home.

 

4. Tenant Demographics and Preferences

Have you noticed any changes in your tenant demographics and preferences lately? You're not alone. Many landlords have seen these shifts, especially in this era of digital nomads and remote workers seeking more flexibility in their leases.

Tenant demands can differ widely between the generations, too. For example, a single millennial will have very different needs from an older person or a family. But regardless of generational differences, modern tenants are becoming more selective in what they're looking for in rental properties.

Do the research, and determine the demographics of your property area. Which age group is most prevalent? Are there mostly single households, or families? Are there many pet owners?

Statistics like these are relatively easy to find online and will give you insights into the tenants your property may attract. This allows you to make changes that fit your desired target market.

 

5. Sustainability and Green Initiatives

The real estate market has a growing demand for eco-friendly and energy-efficient homes. And the property rental market has had to step up its green game too with sustainable property upgrades that appeal to more environmentally-conscious tenants.

If you want to attract more of these tenants, show you're as committed to the eco-friendly cause as they are. One of your best options is installing solar panels. These are not only suitable for free-standing properties. There are solar panels for apartments, too.

 

6. Financial Management and Investment Strategies

Buying and renting out a property can be a good investment, delivering passive income for years to come. But landlords everywhere are realizing how managing these investments wisely protects their property investments in a fluctuating market.

Here are our top tips:

• What are the area's median rental prices, and are they subject to seasonal changes? How much competition do you face? Do the research! These factors affect what you can charge in rent, and how much profit you'll make.
• Buying properties to rent out establishes you as a business that can be structured as a sole proprietor, partnership, or limited liability corporation (LLC). Choose wisely! The sole proprietor option puts personal assets at stake in the event of business debts and losses.
• Maintain a distinction between business and personal finances. Keep separate bank accounts and credit cards. Separate financial records not only simplify taxes but also make it easier to calculate profitability.
• Use a property management service if you're renting out multiple properties. They can streamline rental processes and minimize tenant turnover and vacancies to keep you profitable.