The Rental Side of the Market Is Heating Up — Here’s the Data
- jfennimore
- 10 hours ago
- 2 min read
Most of what we share covers the fix-and-flip side of the business. But the rental market is showing some interesting movement — and it matters even if your original plan is to sell.
Rents are rising across major markets — with the Northeast leading the way.
Single-family rents increased across the 50 largest U.S. metros during the first half of the year. Some of the strongest growth came from the Northeast and Midwest, which accounted for 8 of the top 10 markets. Buffalo led the country, with markets such as Pittsburgh and Cleveland also showing strong growth.
Occupancy remains healthy and rental demand is holding up.
SFR occupancy remains around its long-term average. At the same time, elevated mortgage rates and affordability challenges continue to keep many would-be homebuyers in the rental market. For investors, that helps support a steady pool of potential tenants.
Cap rates have improved.
SFR cap rates have increased by nearly two percentage points since 2021 as rents have caught up with valuations. For investors purchasing today, that can mean more attractive going-in returns compared with just a few years ago.
What does this mean for a fix-and-flip investor?
It means you may have another viable exit strategy.
If a property no longer pencils out as well for a sale — whether because the comps softened, your timeline changed, or the expected resale margin became too thin — converting the property to a rental may be worth considering.
That can be especially relevant in markets like New Jersey and Pennsylvania, where rental growth has been particularly strong.
The key is having flexibility.
Whether your strategy is fix-and-sell or fix-and-rent, First Funding can structure financing around both. And if you're already working on a property, a refi-to-hold strategy may provide an alternative to selling into a softer market.
Have a deal you're evaluating? Let's talk through the numbers and see which exit strategy makes the most sense.
First Funding Loans
Jarrod Fennimore
Managing Partner
📞 +1 732-991-5216
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