Looking back on the 2024 rental market, the primary theme was the looming effect of the increased cost of living, mass construction growth, and rent stabilization. In 2024, we experienced a significant decrease in rent prices across the nation, allowing the market dynamics to shift towards stability and forcing property owners to re-evaluate rental rates and long-term goals. Because of these market conditions, property investors experienced the importance of flexibility in rental prices to maintain a successful Orlando rental property operation, attract and retain tenants, and generate revenue.
As rent prices fell and the cost of living continued to rise, new unit construction increased by 12.4% year-over-year across the nation with a total of 1,448,800 new units. The construction of new units, many of those being luxury apartment complexes, significantly raised renters’ expectations of amenities and unit specifics while still seeking lower rental rates.
From 2020-2023, Florida rental property owners were able to lease or renew some homes with a staggering 20%+ increase. As the market has stabilized, significant increases like these were rare in 2024.
In 2024, Florida cities did not see strong rental growth. According to rent.com:
- Rents in Florida have decreased -4.15% year over year.
- Orlando’s rent has decreased -1.99% year over year and -.04% month over month
- Tampa’s rent has decreased -.96% year over year and -3.38% month over month
In addition, if we look at rent trends from a macro perspective, single-family rents as a nation have fallen. As an Orlando rental property owner, it is essential to stay prepared and educated on rental market trends. Property owners must understand that listing your property for rent even at the same price as a year ago may not be beneficial and will result in extended vacancy and added costs.
Preview of What’s to come In 2025
Rental Rates Declining & Renters’ Preferences Shifting
While rental rates decreased significantly in 2024, the market is ever-changing and frequent fluctuations are common. With that being said, your rental property remains a valuable asset. Long-term rental property ownership will allow you to optimize your income, increase equity in your real estate asset, and your property will continue to appreciate in value. While market conditions won’t always be in favor of landlords, seeing through the fluctuations and holding onto your Orlando rental property asset will lead to long-term wealth, a lifetime of passive income, and financial freedom.
In 2024, the mass construction of new apartment buildings throughout the state contributed to the decline in rental rates amongst single-family homes in Florida, however, the market has begun to stabilize. While we are no longer seeing sharp declines in the rental market, there are some changes in tenant preferences that landlords must consider in 2025. The influx of brand new state-of-the-art complexes have made a mark on tenant preferences and expectations of rental units. While single-family homes will always be in demand, some landlords may need to consider home upgrades, move-in specials, or rental price adjustments to accommodate the new standard of rental property trends.
However, with high mortgage rates and insurance premiums, rental demand is expected to remain strong in 2025. Many Florida and United States residents looking to purchase a home are choosing not to do so at this time, holding out until mortgage rates decrease. Therefore, we predict an increase in competition and a gradual increase in rental pricing throughout the year.
Financial Health of Renters
In 2024, we saw an annual inflation rate of 2.7% for the 12 months leading up to November. As the price of living increases across the board, Florida renters are having a difficult time keeping up with their financial obligations. In an attempt to compensate for the significant inflation rate, Florida renters are seeking lower rent prices — and many of them are not willing to compensate.
Florida has a 90 days or more past-due credit card delinquency rate of 11.68%, making Florida the state with the second highest credit card delinquency rate in the country. As most rental properties have strict credit score requirements, this high delinquency rate contributes to the struggle many are experiencing in qualifying for rentals across Florida.
In addition, while Florida’s minimum wage was raised to $13 per hour in 2024, those earning minimum wage are struggling to keep up with the income requirements for rental properties. With a lack of affordable housing and an average rental rate of $2,400 across Florida, many Florida renters are not making nearly enough money to qualify for properties that require tenants to earn 2-3 times the monthly rental rate.
Hiring a Professional Property Manager in 2025
In an ever-changing rental market, we here at The Listing Real Estate Management have several strategies in place to ensure that you and your property remain protected and financially strong in the coming years.
One major component of success for your Orlando rental property this coming year will be resident retention. As a professional property management company, we know how to implement strategic improvements and focus on resident retention for your investment property, while minimizing vacancy time during turnovers, should that occur.
To achieve this, property managers must place emphasis on improving and negotiating vendor prices to ensure they are providing you with both competitive pricing and quality prompt repairs for an even more efficient maintenance operation. It is essential that you seek a property management company that has established strong relationships with a network of licensed and insured vendors.
How can a Property Manager Increase Resident Retention?
A vacancy is a rental owner’s largest expense. Losing a tenant to a huge renewal rate increase or overpricing a rental property between tenants is an expense you can avoid by understanding the importance of retaining the tenants in your home. A property manager can increase resident retention with full-service property management and:
Best-in-class Hospitality:
Always responding promptly to tenant inquiries and concerns in a professional manner. Tenants are less likely to move out due to an overall better living experience where they feel heard and valued.
Regular Maintenance and Repairs:
Proactively addressing maintenance issues. Well maintained properties = happy residents that are more likely to renew their lease. The #1 reason tenants do not renew their lease is due to maintenance issues not being addressed.
Lease Renewal Pricing:
Offering tenants market rate lease renewal offers such as reduced or minimal annual rent increases. In today’s environment no longer are tenants likely to renew at an annual 5% + increase year over year. Especially when other similar properties are on the market for less. We are heading into a more normalized & steady rental market where renewal rates should remain between 3-5%.
Effective Communication:
Our technology and support staff help maintain open and transparent communication with your tenants at all times. Providing them with the resources and information they need, when they need it. Effective communication increases a resident’s overall satisfaction while living in your rental.
In summary, resident retention is important because it contributes to financial stability, reduces costs, improves efficiency, and enhances the overall quality of your property. It’s not just about retaining residents; it’s about creating a positive living environment that encourages residents to stay, resulting in longer leases and a more stable rental income for you.
Although we may see significant change in the Orlando rental market in 2025, your property will continue to thrive, especially in the hands of a professional Orlando property management company. Our experienced team is highly educated and knowledgeable about the rental market and how to proceed in times of change. Our property management team conducts all operations with your best interest in mind. Our suggestions are always in favor of optimizing & protecting the success of your rental property.
We are here as a resource for you and we believe it is important for our property owners to also understand and stay informed on the ever changing climate of the rental market. For more information, contact us today. We look forward to guiding you to success in 2025!
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