The rental landscape is always changing; and with economic uncertainty, new laws, shifting tenant preferences and more, it’s easy to feel overwhelmed, and anxious about the future of your investments.

But here’s the good news: there are a number of steps that you can take to help future-proof your rental property investments. Of course, we can’t predict the future, and there’s no silver bullet strategy that can guarantee continual ongoing success. But the great thing about rental properties, and especially single-family rentals, is that it is a tremendously resilient asset class. Even during times of economic uncertainty, people will always need housing, and single-family rentals offer a measure of long-term stability for investors. They’re not bullet-proof: no investment is. However, with the right investment property, the right financing, and great property management, they can offer an investor solid returns year after year. 

The good news is that there is a lot that you can do to help set your rentals up for success. In this article, we’ll look at eight ways that you can help to future-proof your rental properties, helping them to be more resilient in the face of uncertainty.

How Do You Future-Proof Rentals for the Future?

Future-proofing is anticipating and mitigating potential risks and problems before they occur or become too problematic.

So, what should rental property owners be future-proofing against?

1. Changes in Tenant Lifestyle and Preferences: Tenants look for properties that match their lifestyles. Not being in tune with what tenants need could mean empty units and missed rental income opportunities.

2. Economic Uncertainty: In times of economic uncertainty there can be increases in the cost of living, spikes in inflation and a loss of job security. Aside from potential increases to operating costs, higher prices may leave some tenants scrambling to make ends meet.

3. Regulatory Changes: Staying compliant with the latest regulations is a constant challenge as landlord-tenant laws continue to change, from zoning ordinances to rent control or fair housing laws. Failing to comply with the rules could result in costly fines, legal disputes, or even damage to your reputation as a property owner.

4. Home Prices and Interest Rates: Fluctuations in home prices and interest rates can impact the affordability of rental properties for both landlords and tenants. If you’re an investor looking to purchase a new rental, knowing if the timing (and financing) is right for you is a skill that could spell a difference in your long-term returns and rental income.

5. Environmental Concerns: As tenants become more environmentally conscious, looking out for properties that minimize their carbon footprint. The government is also on board, offering incentives for energy-efficient homes that qualify.

8 Ways to Help Future-Proof Your Rental Investments

1. Conduct Careful Market Research (When Buying)

One of the simplest and most effective ways to future-proof your rental property investments is by conducting local market analysis before you buy. Keep a close eye on factors including:

• Housing prices
• Rental rates
• Rental demand: Price-to-rent ratio
• Population changes
• Neighborhood developments
• Economic development
• Unemployment

“Real estate investors should be on the lookout for red flags, such as a lack of income, poor location, tax or other liens, and an obvious lack of maintenance or upkeep. Getting a detailed inspection, checking court records for liens, and researching rental trends for the area can help you gauge an investment property’s short- and long-term potential,” Christopher Rogers, partner at Capital Fund Law Group, tells U.S. News. 

By analyzing the local housing market, you can assess whether a potential property is a good deal, or overpriced. 

Stay in the know while you’re on the go. Here’s a round-up of our Top 16 Real Estate Podcasts for Landlords and Real Estate Investors.

2. Use Technology

Proptech or property management technology can make your life easier by streamlining landlord tasks. You can use it to collect rent, screen tenants, and even manage your entire portfolio. But technology’s benefits aren’t just for landlords. For tenants, online platforms make renting as easy as ordering pizza, and smart thermostats can adjust a home’s temperature before they even think about it. 

Here are simple ways of incorporating technology into your rental management:

• Use online tools for rent collection, tenant screening, and more.

• Make sure your rental properties are listed on online platforms to reach a wider audience. You can even take it a step further by showing off your properties with virtual tours or videos that potential tenants can access at their convenience.

• Smart thermostats, locks, and security systems make life easier for tenants and improve the conditions of your unit.

• Keep in touch with tenants through messaging apps. Quick responses to their questions or maintenance requests can vastly improve their renting experience.

3. Go Green

Prioritizing sustainable properties, materials, and practices can also be a smart strategy. By being more environmentally conscious with your rental you could enhance tenant satisfaction and reduce operational costs.

You don’t have to go big straight away, so don’t feel you need to install solar panels and a heat pump right away to be sustainable. Go green slowly but surely by making easy swaps like installing energy-efficient lighting or low-flow water fixtures.

For more actionable tips, read Eco-Friendly Solutions for Your Rental Property That Can Boost Savings.

4. Comply With Laws

Complying with landlord-tenant laws is an important part of risk mitigation for landlords. Doing the right thing also helps to build your reputation and establish trust with your tenants. When you follow the rules, you’re showing your tenants that you care about their rights and their safety.

Nobody wants to deal with fines, legal battles, or a bad reputation in the rental world. Here’s what you could do to stay legally compliant:

• Regularly check for updates on local laws and regulations that govern rental properties. This includes keeping an eye on changes to eviction rules, rent control ordinances, and fair housing laws.

• Draw up comprehensive and legally sound lease agreements that establish clear roles and responsibilities for both landlords and tenants, and make sure these are compliant with state laws. Address key issues like rent payments, lease terms, property maintenance, and dispute resolution procedures.

• Subscribe to newsletters or alerts from local housing authorities, landlord associations, or legal organizations to receive updates on regulatory changes that may affect your properties.

5. Explore Other Asset Classes

The investment rule of never putting all your eggs in one basket rings true. With diversification, you can add a layer of risk mitigation to your portfolio. 

Here are some rental investments that may be worth exploring:

• Student Rentals: Consider tapping into the demand for student rental housing near colleges and universities, which can offer steady rental income and potential for long-term appreciation.

• Worker Housing: Consider investing in properties near major employment centers or industrial areas to cater to the growing demand for affordable housing for workers.

• Vacation Rentals: Vacation rentals can offer high rental yields during peak travel seasons and provide opportunities for personal use. Just take care with these investments; returns may be higher during the busy seasons, but you will need to factor in the slow season as well. You will also typically have higher expenses when running a vacation rental as well.

6. Focus on Tenants

When tenants are happy with their rental home, you encourage them to stay longer. If you want to be a great landlord, you should do more than just provide a roof and walls. How does one add value?

Will Moxley writes in Housing Wire, that in order to do this well, landlords need to, “…Thoroughly understand resident preferences and invest in the right amenities, services and experiences to meet their expectations.”

Here are more tips to make the tenant’s experience better:

• Get Creative With Amenities: Practical things that make life easier (like a washer and dryer) or touches that make the unit cozier (a reading nook or plants) can make the property feel even more like home.

• Stay On Top of Maintenance: Don’t wait for tenants to report issues. Stay ahead by scheduling regular maintenance checks and property inspections. Addressing issues promptly makes for happier tenants and also prevents many small problems from turning into costly repairs.

• Be Responsive: When it comes to keeping your tenants happy, nothing beats top-notch customer service. Make it a breeze for them to reach out to you with questions or issues, and make sure you use a communication channel that’s convenient for them.

• Offer Flexible Lease Terms: Cater to evolving tenant needs with flexibility with lease terms. Some examples include month-to-month leases, short-term rentals, or furnished apartments. Being open to reasonable requests and negotiations can attract a wider range of tenants and help you to keep your rentals occupied.

Finally, don’t forget about tenant screening. One way to help future-proof your rental is to find qualified tenants who want to stay put for longer. Implementing an airtight tenant screening process can help you to find these candidates who will be able to pay the rent on time each month and follow the terms of the lease.

Download our FREE guide where we discuss what tenants really want in a rental home.

7. Get Landlord Insurance

Let’s say your rental unit got flooded and isn’t habitable for a few weeks, you’ll be out of income and saddled with out-of-pocket expenses. Landlord insurance acts like a safety net that could help you if things go south.

Plus, knowing you’re covered in case of emergencies can help you sleep better. With the right coverage in place, you can weather events like natural disasters, accidents, or tenant disputes while keeping your investment covered for the long haul. 

Here are some tips for getting insured:

• Shop Around

Don’t settle for the first insurance policy you come across. Compare quotes from different providers to find the best coverage at competitive rates.

• Understand Your Needs: Consider factors like the type of property you own, its location, and your risk tolerance when choosing insurance coverage. Carefully review your policy to make sure you understand what’s covered and what’s not, so there are no surprises down the road.

• Don’t Skimp on Coverage: It can be tempting to cut costs by going for the cheapest policy, but skimping on coverage could end up costing you more in the long run. Invest in comprehensive coverage that adequately protects your investment and provides peace of mind.

8. Consider a Professional Property Manager

Having experts manage your property is another great way to help future-proof your rental investments. That’s because a good property manager can help streamline the management of your rental by helping you to find great tenants and overseeing your property for you. Because they’re your boots on the ground, and are able to handle all of the time-consuming day-to-day tasks, they can help to free you up to focus on more important things: like taking a proactive approach to portfolio management. This includes keeping an eye on the housing market and economic conditions, as well as monitoring your properties’ performance, allowing you to assess when it may be time to sell an underperforming asset, or add to your portfolio. 

Nobody knows for sure what’s going to happen next in real estate or the economy; but the best way to survive and thrive in this industry is to stay informed and adaptable, or to hire someone who helps you get there. Keep your finger on the pulse of market trends, regulatory changes, and emerging technologies. Remember that success isn’t about predicting the future, it’s about being prepared for whatever comes your way. 

For more investor tips, be sure to check out the Renters Warehouse Education Center. And if you’d like to learn more about outsourcing property management, reach out to one of our local property managers to help make your plan a reality.