This content was originally published in our residential property management newsletter, Pillow Talk. Sign up here.
Zillow recently reported that a near-record 2.3% of homes listed for rent on their platform were previously listed for sale. This is the highest percentage since November 2022, and they add the trend may not have peaked yet. What this means practically speaking is that the number of accidental landlords entering the rental market is big, and still on the rise.
Why? Because we’re still in a tough selling environment across most of the US. Buyers want to buy, but sellers can’t get the price they want. As Marc Cunningham covered in this video back in January, many sellers have favorable interest rates. In fact, as of January, roughly half of primary mortgage holders nationwide have interest rates of 4% or below. Because their monthly payments are manageable, these sellers are deciding to wait it out, and rent their property instead of taking a haircut on the price.
What this means for residential property management
On one hand, this is good news, because it means there are way more owners in the market for a residential property manager. Maybe we’ll see the downward trend of average leads per month take a turn for the better.
But on the other hand, it’s bad, because it’s affecting rent rates. More supply entering the rental market puts downward pressure on rent rates. Jay Parsons recently shared on LinkedIn that single-family rent growth has slowed to a 10 year low, and multifamily has slowed to a 15 year low.
Jay also recently shared that the median age of rental stock in the US is now at an all time high of 45 years old. Odds are, your clients’ properties are relatively old, which means they could see increased maintenance events in 2026, depending on how much they’ve deferred in the past.
How residential property managers can be prepared
These two factors, slowed-to-flat rent growth and good odds at increased maintenance events in the next year, add up to something your clients are going to hate 👉 poor cashflow.
My advice: Get proactive, and start telling owner-clients the ugly truth TOMORROW.
Get ahead of what’s looking to be a tough leasing season. Owners will be disappointed when they don’t get the rent rate they hoped for. Identify owners with old homes that have deferred maintenance, because they will be very frustrated when big maintenance bills eat up their already-disappointing draws. I know it, you know it, but they DON’T. And it’s up to you to tell them.
This might seem like a counterproductive idea. Why would you intentionally share bad news? Because it builds trust.
They’ll appreciate the heads up. And if you’re wrong, well that’s good news! And if you’re right, now you’re the expert whose advice they can count on.
Shameless plug incoming
Slowed rent growth means optimized rents will be more important than ever this leasing season. When every dollar matters, rent guesstimates aren’t an option. That’s why we built Property Analyzer, our next-gen rental estimate tool.
Enter an address, and Property Analyzer instantly generates a rent estimate, market comparisons, and way more. We use premium data for unmatched accuracy, so you can set rents with confidence.
Let’s get you hooked up with Property Analyzer over a quick 15-minute call.
About Blanket
Blanket is transforming the property management industry with its innovative platform that helps property managers grow their portfolios and retain owners. By combining AI-powered insights, automated lead generation, and seamless integration with existing property management software, Blanket provides property managers with the tools they need to succeed. Blanket is backed by leading Venture Capital Funds like Foundation Capital, Symbol, Operator Partners, RE Angels, and industry-leading Angel investors. Together, we’re shaping the future of property management.
