What Will the Rental Market Do This Upcoming Year?

As we head into another year, things have certainly been a whirlwind. If we weren’t in the throes of the pandemic, we were on the way out of it and trying to get to our new normal – if there is such a thing. The one industry that not only persevered throughout the COVID crisis but actually soared was the real estate market. Since we’re heading into 2023 with interest rates on the rise and the cost of living skyrocketing, what will it mean for next year’s rental market? These are our property management in Charleston predictions for the year ahead.

Rentals Will Likely Experience Low Inventory

When the cost of living soars and interest rates go higher, then more people are shut out of homeownership. Over the past few years, we have experienced historically low interest rates, but that is changing. As the interest rates rise, it will price out many who had considered being homeowners from doing so, pushing them into finding rental options. With more people looking for a temporary place for the upcoming year, rentals will be harder to find and more competitive than they have been in quite some time.

What Will Rental Prices Do?

As with anything else, low inventory leads to higher demand and increased competition. This competition breeds higher prices for rentals in the Charleston area. If there is a surge of people looking to rent, rent prices are going to go up – which might not be great for those who need to find a rental, but it is profitable for those who have rental properties in the area. Whether you have a short-term rental, a vacation rental, or are renting annually, you will likely find an easier time maintaining fewer vacancies and lower turnover.

Tourism and Renting

However, if there is a slowdown in the economy, then fewer people will be able to travel and enjoy leisure time away. South Carolina is one of the most popular vacation states in the US, so although tourism might still be thriving here, it is bound to experience a bit of a slowdown if that becomes the trend around the nation. That can lead to lower rental prices or perhaps higher vacancy rates for those who aren’t planning ahead.

How Can You Combat Rental Conditions?

If you are a property owner in the Charleston area, then you might enjoy a windfall over the next several years if the real estate industry slows down and the cost of borrowing continues to remain high or even go higher. Although we don’t have a crystal ball to forecast exactly what will happen, there are several steps that you can take to maximize your profits and minimize your losses. That all begins with the expertise and experience of the Charleston property management group you hire. Using things like peak rental rates, balancing vacancies against the cost of renting, and maintaining your property to hold strong over the next several years is a must.

As we head into 2023, it is impossible to know what exactly will happen in the rental market. But there are some indications that we use at Sea Turtle Properties to pivot and adjust your rental rates so that our property owners are always getting the most for their rentals, decreasing vacancies, and staying on top of maintenance must-dos. Contact our office today to ensure that your rental is competitive no matter what conditions come our way in 2023!

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