Emerging Rental Trends of 2016

rental-property-trends As you move further into 2016, it is important you stay ahead of the rental trends that are emerging this year.  Being as prepared as possible for any upcoming changes in the rental property business, especially in the Baltimore County area, is one way you will be able to turn an annual profit and hopefully become more successful than last year.

Nationwide trends are pointing optimistically towards a strong rental market for 2016; this we know.  With employment rates increasing, the economy stabilizing, and population growth continuing, one thing is undeniably true: people need a place to live.

Luckily for landlords, many Americans are still shying away from home ownership despite the improvements that the country has seen.  Today we will take a look at some of the most powerful rental trends you can expect to fully emerge this year.

Rental Trends of 2016

Demand for Rentals Will Continue to Rise

According to the U.S Census, rental property vacancies have hit an all-time low in America.  But why?  More job opportunities are being created every day, people are recovering from the recession, and purchasing a home is still less expensive than renting.

So why is it that over 85% of Americans are still, in 2016, choosing to lease a home that costs them 30% of their annual take home pay, rather than lessen the burden and purchase a home?

Well, let’s take a look at what tenants are saying:

  • Renting is more expensive than buying and that very fact (ironically) is making it too hard to save for a down payment.
  • Despite the research saying it is cheaper to buy than rent, in some markets luxury homes for sale are outpacing rental rates in the same areas.
  • Millennials love the simple, low-maintenance way of life found with leasing a home.
  • Many Baby Boomers are entering retirement and no longer can or want to manage a home ownership.
  • Immigration is on the rise and purchasing a home proves difficult when new to the United States.
  • The recession’s effect on credit scores are making it hard to qualify for a home mortgage.
  • Increasing tuition rates means student debt is lingering for longer.

The truth is, there are several factors contributing to Americans’ continued desire to lease homes.  Although some are an unfortunate result of the recession, some are also a due to changing lifestyles older generations are not used to seeing.  In the end, it doesn’t matter why your tenants want to continue to lease your rental home, it just matters that they do.

Mortgage Rates Are Increasing

Just as it was predicted both last year and this year, mortgage interest rates are climbing and they are not expected to stop any time soon.  In fact, it has been noted that the Federal Reserve is actively taking part in guiding the interest rates up, which is making it harder for the average person to purchase a home.

So what does that mean?

Monthly mortgage payments will increase as well as the debt-to-income ratio used to qualify people for home loans.  This may also spur those with variable rate mortgages to sell their properties leaving more inventory for rental property investors to snatch up and lease to tenants for a profit.

Because of the steady interest rate increases, people will likely be forced to continue to rent their homes until they can safely afford a mortgage.

Rental Rates Will Increase

As the demand for more rental homes increases because of the first two rental trends, you can expect another rental trend to emerge: increasing rental rates.


Rent.com conducted a survey just last year and found that a whopping 88% of landlords raised their rents in the last 12 months.  They also revealed that 68% of property managers surveyed predict that rental rates will continue to climb throughout 2016 as high as 8%.

This true but disturbing trend (for tenants) is one of the major driving forces behind increased demand for rental homes.  However, for landlords, this true and appealing trend is bringing in supplemental income like never before.  With home ownership hitting a 50-year low, owning rental property has never been this lucrative.

More Investment Opportunities

Still tying in with the rental trends of increased rental home demand, rising mortgage interest rates, and hard to manage rental payments, there is the opportunity for rental property investors to really build their rental property portfolios.

Landlords are finding that in order to keep up with the demand for rentals, and partake in the financial advantages, they need to invest in more properties.  Since home buying is in general less expensive than renting and rental rates are expected to be inflated, landlords win on both ends.

In addition, as single-family-home construction begins to pick back up again, many new properties will again be within financial reach of landlords who only have a few rental properties.  In the past, as the recession carried on, builders were mainly focused on developing high-priced community homes, most of which were financially out of reach for the average landlord.

Now with demand increasing across all income levels and the prices of raw supplies for building homes leveling out, home developers are once again interested in building family friendly, middle-class homes.  This is great news for landlords looking to bump their portfolio up with a couple of new, yet affordable, properties.

Property Management Groups Will Expand

With emerging rental trends looking positive for landlords on all levels, you can expect property management groups to improve and expand as well.  As landlords invest more and tenants continue to fill properties, there will be an increased need for property management services.

Knowledgeable and adequate staffing, improved technology and software, and competitive management fees are all going to come into play as property management groups vie for your business.  In preparation for this competitive demand, property management groups will have a unique chance to make you and your tenants happier than ever by providing top notch customer service.


If you own a Baltimore County rental home, are looking to expand your portfolio, or are just in need of a high quality property management group consider contacting Bay Management Group for all of your property management needs.

Dealing only with property management, and having one of Maryland’s lowest monthly management fees, Bay Management Group can help you stay ahead of 2016’s rental trends.  As you increase your portfolio, take on more tenants, and make more profit annually, you can rest assured Bay Management Group will be with you every step of the way so that 2016 ends as your best year yet.

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