MARKET & TRENDS
2023 RENTAL TRENDS
5 Expected 2023 Rental Property Investing Trends THE COMING YEAR WILL OFFER MANY LUCRATIVE OPPORTUNITIES FOR INVESTING—AS LONG AS INVESTORS ANALYZE THE MARKET, USE RELIABLE DATA, AND FOLLOW RECENT DEVELOPMENTS AND FORECASTS.
by Daniela Andreevska
he last few years have witnes- sed a series of crises in the
monthly travel expenditure in the U.S. surpassed the pre-pandemic level (April 2019) for the first time, by 3%. Short-term rentals are directly related to traveling. This means that as more people resume traveling, the demand for Airbnb-style rental properties will increase, allowing for higher daily rates and pushing up return on investment. If you are interested in this rental property strategy, you should focus on markets with strong Airbnb demand. According to nationwide analysis conducted by Mashvisor, a real estate data analytics company, these cities boasted the highest Airbnb occupancy rates in the U.S. market in the summer of 2022: Portland, Oregon (67.5%); Seattle, Washington (67.4%); Tucson, Arizona (67.3%); and San Francisco, California (66.9%). 2. STRONGER DEMAND IN SECONDARY AND TERTIARY MARKETS The second 2023 trend in the rental property investing industry is the continued growth of small, rural markets. The pandemic and the consequent switch to remote working across numerous industries affected the real estate market in major ways. One of the most
significant changes to keep in mind as an investor is the massive move from primary markets like New York, Los Angeles, Boston, and Chicago to secondary and tertiary markets. Because work-from-home policies are expected to remain in many businesses, the trend to smaller markets is forecast to continue into 2023 and beyond. Many professionals and families prefer the peace, comfort, and security small towns and rural areas offer. Although some people might choose to buy a home, others will decide to rent, creating an opportunity for investors. For those considering investing in a long-term rental property, smaller markets will offer more demand and higher return. Importantly, such locations come with lower property prices, which makes them affordable even for new investors. 3. GROWING INTEREST IN LONG-TERM AIRBNB RENTALS Another important trend the global pandemic stimulated is the emergence of a hybrid rental strategy that combines the benefits of investing in short-term and long‑term rentals. As traveling nurses and other traveling professionals need temporary housing in various
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real estate market in general, but specifically in rental property. The COVID-19 pandemic, the hottest residential market in decades, and the recent rise in mortgage interest rates have all impacted the industry and affected the ways in which investors think and act. Neverthe- less, things seem to be stabilizing in real estate at the moment, sending positive signals to all who consider investing in rental properties in the coming months. With that in mind, let’s take a look at the five most important trends expected in 2023. 1. RECOVERY OF THE SHORT- TERM RENTAL INDUSTRY Although the pandemic had a major debilitating effect on the vacation rental industry, the slowdown was relatively short, and the market has already started recovering. The recovery is expected to continue during the remaining months of 2022. By 2023, short-term rentals are expected to have reestablished their position as the more profitable rental strategy when compared to traditional, long-term rentals. The most encouraging sign is the return to travel. In April 2022, the
56 | think realty magazine :: september - october 2022
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