Looking back on the 2023 long-term rental market in Tampa, Florida, the primary theme was the looming aftermath effect of the pandemic. As Tampa rental property owners know, the pandemic led to a sharp increase in demand for rental properties in Tampa as people fled urban areas and sought more space.
This, combined with a decrease in the supply of rental properties, led to a surge in rental prices here in Tampa. In 2023 we experienced an adjustment in rental rates and longer days on market for properties to lease. In 2022, some rental property owners were able to lease or renew their homes with a staggering 20%+ increase. As the market is changing, significant increases like these are no longer achievable for landlords and real estate investors in Tampa, Florida.
How Much Has Rent Gone Down in Florida?
The main concern property owners currently have is evaluating how much rent has gone down in Florida. The success of your property relies on how accurately its rent price reflects the current market.
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
If we look at rent trends from a macro perspective, single-family rents as a nation have fallen for 15 consecutive months, according to DSNews. As a rental property owner going into 2024 you must be prepared to adjust your rental prices. In addition, it is essential to 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.
Tampa & Florida Rental Property Laws
This past year also brought us legislative challenges regarding rental properties. Landlords and rental property owners were faced with navigating the complexities of the everchanging local ordinances and rental mandates pushed onto housing providers by city & county officials such as:
Orange County Stabilization Ordinance: which limited rent increases for certain residential rental units in multifamily structures to the average annual increase in the Consumer Price Index, and requires the County to create a process for landlords to request an exception to the limitation on the rent increase based on an opportunity to receive a fair and reasonable return on investment.
Orange County Rental Notice Ordinance: requiring landlords to give a 60-day written notice for rent increases of more than 5%.
Pinellas County’s Tenants Bill of Rights: Mandated landlords to give 60 days’ notice when raising rent more than 5% in an annual lease renewal.
These ordinances produced many operational challenges amongst landlords and property management companies, and resulted in many inconsistencies across Central Florida counties as each local government had their own mandates in place.
Fortunately, pandemic era legislative policies were overturned with the signing of law SB 102, also known as the “Live Local Act”. This massive housing bill prohibits local governments in Florida from pursuing any kind of rent stabilization or rent control, now or in the future. This is a significant advantage for your rental property investment.
2024 Florida Rental Market Predictions
In addition to the slowing of a significant migration to Florida following the pandemic, other factors, such as an increase in construction and rental units coming online, will impact the rental market in 2024. According to CoStar, major Florida cities will see a significant and record-breaking level of construction.
The mass construction of new apartment buildings throughout the state contributes to the continuing decline in rental rates amongst single-family long-term rentals in Florida. The construction of apartment complexes offering luxurious amenities and central locations has begun to take precedence over the demand for single-family homes. Often, these brand-new state-of-the-art complexes will attract residents with an appealing discount. A move-in discount of 50% off the first month of rent or a waived security deposit is often enough to convince someone to sign a lease.
As we saw between 2020 and 2022, when the demand for housing exceeds the supply, the rent prices rise. However, as more rental units come online in Florida in 2024, the supply will begin to exceed the demand. There has been a large increase of new multifamily units, vacation rental conversions, and single-family homes hitting the market which will continue to cause a significant drop in rent growth.
In 2024, it will become even more challenging to win over quality tenants than in the past three years as prospective tenants have more options. However, conservative renewal rate increases will ensure the continued success of your rental property and tenant retention.
Financial Health of Florida Renters
From August 2022 to August 2023, there were 14,696 eviction filings in Tampa. During 2022 alone, about 16,000 evictions were filed in Orange County. This rate is up 15% compared to pre-covid averages. Why is this? Simply put, Florida renters are having a difficult time keeping their finances up following the rental spike of the past three years. Combined with inflation, Florida renters are struggling to pay their bills on time and in full.
Florida has become the #1 moved-to state in the nation. As nearly 444,500 people moved to Florida between July 2021 and July 2022, rental rates increased significantly, thus causing living costs to become less affordable.
In addition, Florida currently ranks #2 in the nation for the highest credit card delinquency rate, with a +.12 percentage point change since pre-pandemic. Low credit scores and delinquency rates will deter prospective tenants from qualifying for a rental property, making it more challenging to find quality tenants.
Should I Hire a Tampa Property Management Company?
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 resident retention and retaining the tenants in your home. When you work with a property manager, resident retention operations and strategies decrease vacancies and increase success. For example, at The Listing Real Estate Management, our following services allow for short vacancy periods and an overall successful Tampa property management journey:
- Best-in-class Hospitality: By 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 is one of the most essential aspects of providing a satisfactory living experience. Well maintained properties equal happy residents that are more likely to renew their lease. The number one reason tenants do not renew their lease is due the lack of attention and solution to maintenance issues.
- Lease Renewal Pricing: Offering tenants market rate lease renewal offers such as reduced or minimal annual rent increases makes lease renewals more appealing. In today’s environment, tenants are less likely to renew at or over an annual 5% increase year over year, especially when other similar properties are on the market for less. With the current state of the market, renewal rates should remain between a 3-5% increase.
- Effective Communication: Our technology and support staff help maintain open and transparent communication with tenant’s at all times. Providing them with the resources and information they need, when they need it is an essential key to overall satisfaction and success.
Resident retention is essential 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 renters to stay, resulting in longer leases and a more stable rental income for you.
The Key To a Successful Tampa Rental Property
As a rental property owner, one of the most beneficial things you can do is hire a property manager in a changing market. Professional property managers are experienced and well-educated in how to take on the challenges of the everchanging rental property market. At The Listing Real Estate Management, we know what is best for your property and we strongly believe we will play a pivotal role in increasing tenant retention and optimizing your income and financial returns.
A property manager will also relieve the stress that comes with managing a rental property on your own. With our comprehensive services, our property managers will take care of everything from answering tenant inquiries to sending licensed vendors to address maintenance issues.
As professional Tampa property managers with over 15 years of experience, the current rent decrease is nothing we haven’t seen before. Properties priced according to the current rental market will continue to thrive.
If you are a rental property owner or landlord, this is one of the most critical times to stay informed on the market trends. Hiring a professional property management company in a changing market can significantly benefit your investment and overall success. For a FREE rental property price analysis, contact us at The Listing Real Estate Management, your boutique property managers, to connect with our local expert property managers today! We’d love to be a resource for you and your rental property.
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