The Overlooked “Upside” That Will Make Future Landlords Rich

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 7 March 2025

⏱️ 38 minutes

🔗️ Recording | iTunes | RSS

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Summary

Your rental properties are about to make even more money. There’s one often overlooked real estate investing “upside” that, over time, makes rental property investors and landlords rich without any extra effort. This is one upside that Dave is exceptionally bullish on and is one of the most compelling cases for rental property investing. It’s not home price growth, it’s not tax benefits, and it’s not zoning changes—it’s simple: rent price growth. Rent has steadily grown throughout the history of the housing market and shot up at an extreme pace during 2020 - 2022. Now, the pendulum is swinging in the other direction as rents soften and tons of supply hit the market. But how far are we from going back to the days of solid rent growth? And with the new housing supply already starting to be absorbed, could we get to above-average rent growth again? We brought Chris Salviati from Apartment List on the show to share his team’s rent research. Over time, your rental income will rise significantly while your mortgage payment stays the same, boosting your profits. So, where are rents poised to grow the most? Will we ever experience 2021-level rent growth again? And will 2025 be the year strong nationwide rent growth returns? We’re breaking it all down today so you know exactly where rents are headed next! In This Episode We Cover: Why “rent growth” is one of the most underrated “upsides” of real estate investing The 2020-2022 rent price explosion explained and why rents skyrocketed What has been keeping rent growth suppressed for the past few years Markets with rent declines that could quickly reverse (significant buying opportunities) The property classes (A/B/C/D) experiencing the most rental demand (it’s NOT the nicest ones!) Multifamily vs. single-family rent trends and whether new apartments drive down home rent prices And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Ask Your Question on the BiggerPockets Forums BiggerPockets YouTube Apply to Be a BiggerPockets Podcast Guest! Apartment List Research Join the Future of Real Estate Investing with Fundrise Grab Dave’s Book, “Real Estate by the Numbers” Sign Up for the BiggerPocket Real Estate Newsletter Find an Investor-Friendly Agent in Your Area Rent Prices Are “Guaranteed” to Increase Over the Next Two Years—Here’s Why Grab The Apartment List Research Or Email [email protected] Connect with Dave Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1092 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	The potential for future rent growth is one of the main reasons I believe that investment
0:04.6	properties will drive great long-term returns for real estate investors in the coming
0:09.3	years. And it's one of the best upsides investors can consider taking advantage of when
0:14.9	buying deals today. Today, I'm going to explain why.
0:23.3	Hey, everyone, I'm going to explain why. Hey everyone, I'm Dave Meyer, head of real estate investing at Bigger Pockets, where we teach you
0:28.2	how to achieve financial freedom through real estate investing.
0:31.9	Real estate investing is like any other business in that maybe the single most important
0:35.6	factor in success is how much
0:37.8	revenue you can generate.
0:39.8	And for rental property investing, that basically just means how much rental income your
0:44.1	properties provide every month.
0:46.3	And for a very long time, that number, how much rent you could collect and how much it was
0:51.1	going to grow was a relatively predictable number to project
0:54.6	over the course of 10, 20-year hold period that you might have a rental for. Rents would rise and
1:00.1	fall with the economy or market trends, but on average, they grew about the pace of inflation or
1:04.9	about 3% each year. And that is a really critical point, that they were growing at least as fast as inflation, if not higher.
1:13.4	And then COVID happened.
1:14.8	And from the beginning of the pandemic, rents were soft for a little bit, but we all know it happened from 2020 to 2022 when rents shot up about 20%.
1:24.3	And then the pendulum really just swung back in the other direction. And from 2022 to now,
1:30.0	rents have been relatively flat or fallen a little bit. And those crazy swings, of course,
1:35.6	make it much harder to predict what's going on with your portfolio and what kind of returns
1:40.8	you can project. And this makes it particularly hard to buy or to get into the
	...

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