In our quest to track rental industry trends so you can better navigate the landlord landscape, TurboTenant sends bimonthly surveys to our renters and landlords. From these surveys, we create the biannual State of the Rental report. As we round the corner on 2023, it’s important to know how many landlords are planning to raise rent (vs. those who already have), which we’ll examine in this article.
We’ll also tackle questions about renters’ desire to purchase property, landlords’ portfolio plans for 2023, and what percentage of landlords’ income comes from rental properties.
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Raising Rent in 2023
When asked, only 36.4% of landlords indicated they hadn’t and didn’t plan to raise rent in 2023. Nearly half of all respondents had already raised rent while another 18.4% said they planned to increase monthly rent costs in 2023. 1% of landlords couldn’t raise rent due to their local rent control program.
Rising rent costs could spell disaster for tenants. Though the standard budgeting advice suggests spending a maximum of 30% of one’s income before taxes on rent, most tenants pay significantly more.
Nearly half of the renters surveyed reported paying more than 39% of their income toward monthly rent. With more money going toward rent (and an increase on the horizon for many), renters are going to struggle to make ends meet – particularly since over 60% of renters have less than $5,000 in savings.
For many, that doesn’t leave much of a soft place to land when rent prices climb. However, that fact doesn’t stop renters from wanting their own property – it simply colors their reality a few shades dimmer as desire conflicts with ability.
Now that we know how tenants are looking at the housing market, let’s check in on landlords’ property plans and portfolio composition.
What Will Landlords Do With Their Portfolios by 2024?
66.2% of landlords have no plans to change their portfolio before 2023 wraps up, but some have other plans. Nearly one-third of respondents are hunting for more rental property to purchase, and less than 5% plan to sell off units this year. The remaining 1.9% of respondents who answered “other” mentioned managing but not owning properties, being unsure of their plans, and being open to a good deal if one comes along.
Based on this information, it’s safe to say that the housing market will stay fairly competitive through the end of the year, despite high mortgage rates and low housing supply.
As many landlords look to expand their portfolios, it’s worth examining how much this business influences their overall income.
How Much of Landlords’ Income Comes From Rentals?
For most landlords, their rental income supplements their coffers but doesn’t make up its majority.
Nearly 70% of respondents reported that their rental properties comprise less than 25% of their income. That said, the majority of landlords’ household income is significantly above the national median household income, which was $70,784 per the latest Census.
As we close out 2023, the TurboTeam will continue sending surveys and collecting feedback about the rental industry. To learn about our other insights, including how landlords and tenants feel about the proposed Renters Bill of Rights, subscribe to our weekly newsletter, TheKey. To stay up to date with industry best practices, subscribe to our YouTube channel today!