The rental market is rapidly changing and it’s important as a property owner to keep up with current developments. The strategies that worked a few years ago when marketing and managing your real estate investments may no longer be as effective in today’s rental environment. With major changes occurring in terms of rental costs, housing supply and the economy as whole, the rental market we’re facing today is filled with challenges for renters and property owners alike. By understanding the current rental market climate, property owners will be better able to understand how to position their properties to appeal to the right tenants at the right price.
What’s Different About Today’s Market?
One of the major changes in today’s rental market is the drop in moving rates. Not only are fewer people moving overall, but they’re also moving less frequently than before. This is due to a combination of factors, namely the lack of housing supply and the rising household expenses and rent costs. Housing supply has recently become much scarcer due to increased building costs and supply chain interruptions. According to an article published by CBC, Ontario is already grappling with a shortage of about 500,000 homes and needs another one million by 2031 to satisfy forecasted demand created by a growing population — a goal Ontario is unlikely to reach. This shortage of low to medium priced housing is driving up rent costs due to the growing demand for dwindling supply. These factors are making it increasingly harder for new renters, and renters wanting to move, to find affordable rental housing.
The decrease in moving rates has occurred even among the two main groups who historically tend to move most often: young adults and renters. There have been studies done in the United States that have reported results to back up this noticeable difference. According to a Joint Center for Housing Studies analysis of data from the Census Bureau’s Current Population Survey, just 17% of renters moved in 2021—a decrease of six percentage points in comparison with the previous decade. In addition, moving rates among 18- to 24-year-olds fell by four percentage points; and they declined nearly as much among 25- to 34-year-olds in comparison with the previous 10 years.
How Can Property Owners Adapt?
How can you, as a rental property owner, harness the knowledge of what’s happening in today’s real estate market and use it to your benefit? Firstly, it puts you at an advantage to have insight into the challenges your ideal tenant is facing. By having a clear idea of who your ideal tenant is and what their ideal situation looks like, you’re better able to attract and accommodate them. Knowing that people are moving much less frequently, it’s important that you market your property as a place that they can call home for several years. Adding comfortable finishes and thoughtful touches to your property will give it a leg up over bare-bones listings that potential tenants may not want to occupy for a long time. Putting work into the maintenance of the property both inside and out will also give tenants confidence that you’re proactive in preventing future repair issues. You should also consider investing in minor renovations or undergoing some landscaping to make your property really feel like home. All of these measures also help to add value and justify the market’s higher rental costs.
Having a solid grasp on what’s happening in the rental market can help you adapt your property marketing and management strategy. If you’re looking to outsource some of the legwork of buying an investment property or renting an investment property, consider hiring a property manager. Flex is an Ottawa property management company that has years of experience working with Ottawa landlords and managing properties of all types. We pride ourselves on being up to date with the latest trends in the rental market, which allows us to manage your property in a way that benefits both you and your tenants. Book a call with us to learn more about how we can help you manage and maintain your valuable real estate investments. We’re your go-to team for full-service property management and tenant placement services in Ottawa and the surrounding areas.