The rental market is an ever-changing one that is affected by a multitude of factors. Things like demographic shifts, the economic environment and population changes all affect the balance of supply and demand for rental properties. As a rental property owner, it can be hard to navigate the changes without having information about what to expect in the future and how to adapt in the present. By staying on top of current rental trends, you can make informed choices about how to manage and market your rental property. There have been huge changes in the demands of the rental market since the beginning of the pandemic. This has a direct effect on real estate owners as they seek to rent out their properties. By understanding what tenants are looking for, you can help position your property favourably to appeal to today’s tenants.
The Rise of Working from Home
One of the biggest rental market trends we’re seeing is the shift away from urban living. Due to the pandemic, many companies transitioned their employees into working from home and have not had them return to office. This means that for many people, they’ve been able to move further away from their workplace and into more suburban areas. Renters are choosing larger properties in the suburbs that have space for a dedicated office area instead of working from their kitchen table in urban condo properties. The growing work from home movement, as well as an increased preference for neighbourhoods that are quiet, safe, and lower density, means that there is less demand for properties located in downtown areas.
There have been studies on the shift away from urban living conducted in the United States recently that have significant findings to support this trend. A Joint Center for Housing Studies analysis of Census data shows that 1.2 million Americans left core neighborhoods within large metro areas in 2021, continuing a trend that began in 2020. They moved to small and mid-sized cities, which gained 539,000 residents in 2021; suburban neighborhoods outside of large cities, which gained 428,000 residents; and rural areas, which gained 235,000 residents. This trend of moving away from urban areas holds across every age group, though middle-aged renters have left downtown neighborhoods at the highest rate. This is coupled with the fact that there’s been a 12-percentage-point shift away from urban neighborhoods, with 68% of the survey’s respondents now residing in suburban and rural areas.
How You Can Use This to Your Advantage
What does this mean for you as a property owner? If you own properties in core downtown areas, understand that it’s possible that you may see a decline in the demand for these properties. You may also have a smaller tenant pool to choose from. This also means that as more renters make the transition to suburban living, you can expect to see a growing demand for properties in these areas as well as a greater chance of being able to charge higher rental rates. It’s important to also incorporate your knowledge of rental market trends into how you manage and market your rental properties. Knowing that a larger percentage of the population is working from home, you can outfit your rental properties with a dedicated office space to help appeal to potential tenants. You can also make sure that your properties are located in areas that have access to high-speed Wi-Fi, as well as ensuring the house is properly outfitted to be connected to the tenant’s internet provider.
It’s important as a real estate investor to be able to easily adapt to new developments in the market. By staying informed about current rental market trends, you can ensure that you’re updating your properties in the most efficient way to appeal to your ideal tenant. If you’re looking for help managing your rental properties, it might be time to bring in an expert! Flex is an Ottawa property management company that has experience managing a wide range of property types. Whether you’re buying a real estate property or renting a real estate property, it helps to have someone on your team who understands the market inside and out. We understand the rental market in Ottawa and have a wealth of knowledge about real estate investing in Ottawa too. Book a call with us today and let us help you manage your rental properties effectively in today’s real estate market.