The housing market is not going to crash tomorrow. It’s also not going to boom soon. We’re not in 2008, and we’re also not in 2020. We’re in a strange […]
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Dave:
Housing demand is up, but prices are dropping. Mortgage rates have been a little bit better, but layoffs are all around us. The upside down economy that we’ve been in for years is rolling on, but we’re here to help you make sense of it. Everyone, welcome to On the Market. I’m Dave Meyer, joined by James Dainard, Kathy Fettke and Henry Washington today to talk about the latest news and try and instill some sense, some narrative that makes sense about what’s going on. Kathy, I think I’m gonna call on you first ’cause you got an uplifting story here about the housing market in the economy. Share it with us.
Kathy:
Yes. Everybody could use a little good news. So this is an article from Housing Wire. It is housing demand now reflects a positive trend. And this is written by Logan Mo Shami, who I know we all follow. He tracks weekly data. And what he says in this article is so much of the data that we see in headlines is dated. Mm-hmm
We’re constantly talking about it being a buyer’s market and the shift and so forth. But that is dated news. And what is more current is that the housing inventory data showed 33% year over year growth earlier in the year. And that’s the story people are talking about. But now it’s down to 16% year over year growth. So what we’ve seen in the last few months is obviously mortgage rates have come down a bit, and we’ve talked about this for a long time, that as soon as mortgage rates come down, there’s a whole bunch of people that can enter the market. It’s doesn’t make it more affordable for everybody, but it makes it more affordable to some people who were just on the edge and given the massive number of millennials out there in that house buying era in the mid thirties, give them a little leeway and they’ll take it. Right. So that’s what we’re seeing. And we’re just going into a season where there’s less inventory anyway because it’s the holidays. You don’t really wanna show your house, um, during Thanksgiving or Christmas. So inventory levels tend to go down anyway. And because mortgage rates are lower, Logan was kind of worried like, dang it, I’d liked the higher inventory. This is better, healthier for the housing market. And now we’re kind of going back to less inventory.
Dave:
Well I’m so glad you brought this story here Kathy, because it is probably one of the most misunderstood parts of the housing market right now is you see on social media all the time. Yeah. There’s no buyers, no one’s buying homes. That’s not what’s
Kathy:
Happening. Yeah.
Dave:
Actually we see that home sales is up a tiny bit year over year, but when you look at mortgage purchase applications, it’s up year over year. Yes. From this time last year. And it’s because rates have gone down. And I know it doesn’t feel like rates have come down that much, but they were at 7.2 in January and now they’re at 6.2. Like that matters. One full percent that matters, that’s hundreds of dollars a month. So people are noticing that and coming back into the market, the reason sales prices are dragging is because of inventory. But as Kathy pointed out, we’re getting that correcting kind of vibe where people are realizing it’s a bad time to sell. So they’re not selling. Uh, and so that’s why we’re probably in a normal sort of correction, but that is not because there’s no one buying. People are still buying homes at the same rate they have the last few years. It’s just a little bit different vibe.
Kathy:
Like you said, it’s increased a little bit. Um, I think, I think it was 4.02 million or something. Sales volume. Yeah. Which is up, it was, it was under 4 million.
Dave:
It was,
Kathy:
Uh, before. So yeah, just it, it’s different per market and that’s where people are like, in my market, my stuff’s not selling. I mean, I just talked to someone who said I’ve, he’s had his flip on the market somewhere on the East coast and for a long time and it’s not selling. Uh, so that would just tell me it’s not priced right. Right.
Dave:
Kathy:
Yes.
Dave:
For most normal eras, interest rates fluctuate by 0.25%. Doesn’t really change anything. Or 0.5% doesn’t change anything. Now people are like, oh, I’m gonna jump in this week. You know, there’s inventory rates are down. Last week it was 6.1%, like if you jumped in, that’s the best rate we’ve seen in years. Yeah. You know, and, and there’s better inventory. You have better negotiating leverage. This is the buyer’s market. It’s not great for sellers, but buyers are, I think, gonna start coming outta the woodwork ’cause there’s gonna be better opportunities to buy.
James:
You know, one thing that does drive me bonkers is when people start talking about trends and it’s been two to three months.
Dave:
Mm-hmm
James:
But you know, I feel like inventory is going down because people are kind of in this panic because they’re like, I’m gonna miss the moat. I’m gonna throw my house up for sale. And then they’re canceling too quite a bit.
Dave:
Mm-hmm
James:
And there’s a lot of canceling inventory coming off, but it’s just a slow thick in the mud grind market right now. But I mean, it just, for me, it’s not trend until it goes past. Like, like we have to see what if we go into first quarter in 2026 and it’s slow then that’s a trend to me. But I feel like with the seasonals and the three months of information, like they just kind of gotta ride the waves and to quit panicking because we don’t know what we don’t know.
Kathy:
Yeah. I just, I feel like, what I hear a lot and I see in the notes of, of these shows that we do is people saying, oh well you know, you’re giving bad advice and we’re in a bubble and there’s gonna be a housing crash. And the thinking is always, well, prices are so high, it must be a bubble. And that’s not the right thinking. It, it makes sense because in 2008, prices were high and then they crashed. But that didn’t have to do with high prices. It had to do with mortgage rates adjusting and they were on short term rates. All of a sudden their payment doubled in many cases and they couldn’t afford the payment. If that didn’t happen, we wouldn’t have had the crash. So we don’t have that right now. Mm-hmm
Dave:
All right. Well I I thank you for sharing this one Kathy. I think this is a really important context for everyone. Especially when we go into these correcting markets. People start to panic. But if, if you really understand, you know, markets and prices, they’re dependent on both supply and demand. And for a real crash you need to see demand deteriorate. You need supply to explode. That’s what, when a crash happens, we’re not seeing either of those happen. We’re seeing demand relatively stable supply has increased, but it’s already starting to level off. Uh, and so these are indicators that although we don’t know for sure, much more likely that we’re in a correction than in a crash like we’ve been saying for a long time. But the data does really bear that out. Let’s move on to our next story, which I’m going to share ’cause I think it’s kind of related here because I know a lot of people who are saying, I’ll get into the market when we get mortgage rates down to 5% or five and a half percent
Henry:
Here. Oh no.
Dave:
Yeah. They said the path to 5% mortgage rates is if the Fed does mortgage backed securities, quantitative easing. Oh,
And I’m gonna be honest, I feel pretty validated about this ’cause I have been saying this for a while. The only way you’re getting down that low is quantitative easing. Yep. If you’re not familiar with quantitative easing as it’s basically when the Federal Reserve buys mortgage backed securities or buy government bonds, which is for all practical purposes printing money, they take money outta thin air and they buy mortgage securities and they buy bonds. And this has been an important part, especially after the financial crisis of stabilizing the market. Like they’ve done this to good effect in the past. I think most people in retrospect would say they probably did a little too much of it following the COVID downturn, which contributed a lot to the unaffordable levels that we have in housing right now and inflation. And so I agree with this. I think it’s gonna be really hard for mortgage rates to get to 5% unless they do this.
I guess my thinking is the probability of this happening to me is going up. I’m curious what you guys think, but if the labor market deteriorates and President Trump has stated many times that he wants mortgage rates to come down, that’s a tool after he almost certainly will replace Jerome Powell in May of 2026. It might be a tool he can influence. And I think the likelihood of this is going up, which can mean more mortgage rates, but also comes with a host of other trade-offs. So curious if you guys think this is even in the realm of possibility.
Kathy:
It, it already is. The Fed has already said they’re going to stop their quantitative tightening.
Henry:
Mm-hmm
Kathy:
Which is selling off the stuff that they already bought. They already did this. This is why rates were so low. It’s called financial engineering. It is funny money. It is not great for the population because the Fed goes in debt over this, which is basically, uh, US who has to pay it back. Um, but it is what they do behind the scenes and um, you know, it’s great for those who own assets.
Henry:
Mm-hmm
Kathy:
James:
Dave:
Yeah.
James:
And like I feel like we’re kind of in the mud right now and then we’re gonna take off and then I don’t know what’s gonna happen after that. I, you know, I think in the short term it could have a very positive effect for real estate investors in the long term. It’s probably not a good thing. It’s not probably, it’s not a good thing.
Dave:
Stuff.
James:
But
Dave:
Dude, my gold portfolio
James:
Is crushing
Dave:
Right
James:
Now.
Kathy:
James:
Is on fire right
Kathy:
Now.
James:
Why I think like even right now I’m contemplating pulling some houses off the market because it’s just slow. There’s a lot of fear, a lot of weird things going on and then just dropping ’em in the hot spot because real estate’s about timing. Yeah. And honestly, I do think next year there’s gonna be some juice pumped in this economy and that’s when you’re gonna wanna dispo off anything you don’t want anymore.
Henry:
Yeah, that’s a good perspective. I’ve been considering doing the same thing because of the slowdown here and going into the holidays. Although the Fed did drop rates again, and I know that’s probably not gonna affect interest rates like people think it is, but I don’t really care what actually happens. I care what people think is going to happen
James:
I got five
Henry:
I believe you
James:
You know what comes down to the sweet spot of the market ’cause things are moving. But yeah, if, if you’re outside that sweet spot, it makes more sense to pull it off and put it back on.
Dave:
I’ll just say, I, I, I agree with you what you all said, especially Kathy, like I think short term it could help real estate. I think long term this introduces some really significant issues. First and foremost, it’ll just make housing unaffordable again. Like this will make it affordable for a minute and then it will get unaffordable as soon as they stop mortgage backed securities, which they’ll have to do at some point because inflation will get out of control. The other thing that I think will compound that, and this is, I’ve been trying to say this for the last like three to six months, I’ve gotten increasingly concerned that long-term interest rates are going up long-term mortgage rates not a year or two or three years, but five to 10 years we might be in eight to 9% mortgage rate territory. I don’t even know buying mortgage-backed security and new monetary supply that in itself could do it.
But considering that we have such a high national debt, the temptation to keep printing money is gonna be pretty high to devalue the dollar to pay off that debt. And bond investors don’t like that. And if bond investors don’t like it, they’re gonna demand a higher interest rate that’s going to push up mortgage rates. And so one of the reasons I’ve been saying a lot and for my own portfolio really been focusing on fixed rate debt. Mm-hmm
’cause I don’t, I don’t trust that in five years when I have to refi or seven years when I have to refi that rates are gonna be lower. I think you have to hedge and assume that they might be higher. So this is something perhaps the biggest thing to watch next year. Honestly, I I think this is, would be an enormous shift in the housing market and would change my personal strategy a lot if this started to happen. So, uh, something I just kind of want to bring up and share with everyone and we’ll keep an eye on it. All right. We gotta take a break. But when we come back we have more stories about buying opportunities in different markets across the country and the impacts of some of those high profile layoffs that you’ve probably been seeing in the news. We’ll be right back. Welcome back to On the Market. I’m here with Henry, Kathy and James talking about the latest news. We’ve talked about housing demand, how it’s up the potential for quantitative easing. Now Henry, you’ve got some more housing news for us. What is it?
Henry:
Absolutely. So I wanted to talk a little bit about, uh, housing prices and when they will drop. So there is a sentiment that people think housing prices are going to drop. And the reality is in some markets prices have come down a little bit. And so, uh, I wanted to talk about this article from Yahoo Finance called When Will housing Prices drop Costs have already decreased in some major Metro areas. And I thought I would like to have a little fun with you guys. So we’re gonna have you guys guess you all get to pick two cities that you think are on the top 10 list for housing prices dropping and you can’t pick Austin ’cause I know you’re all gonna say that.
Dave:
And what’s the time period since last year?
Henry:
This is price decrease since September 24.
Dave:
All right.
Kathy:
Okay.
Henry:
So the article is essentially saying that, uh, the typical Home First sale spent 62 days on the market in September, 2025. And that’s a week longer than it took a year ago at this time. It also talks about, according to the US Census Bureau, that the median home price in Q2 of 2025 was 411,000. And it’s down from 423,000 at the beginning of the year. Uh, and so it is showing that the median price has come down and it’s also saying that the National Housing inventory is lower than before the pandemic. And it’s unlikely that we’ll see a huge jump in listings until mortgage rates fall a little more. It’s just telling us all the things that we’ve kind of talked about earlier on the episode. We’ve kind of debunked some of these things, but there are markets where housing prices have fallen and I know that there’s a lot of people interested in where those markets might be.
’cause this could be a place where there’s some opportunity to buy. ’cause a lot of these cities are big cities and they’re not gonna stay in decline forever. So we’ve talked about it with cities like Austin, like if you want to invest in Austin, this may be a time to get in because yes, prices are down. We know it’s a city where people want to live. And so I expect that markets like this rebound. So knowing where these cities are, if you either invest in these cities are interested, investing in these cities could provide you some opportunity to get in while prices are low. So you can monetize if and when values go back up. So with that being said, Dave, give me two cities.
Dave:
Okay. I’m just trying to think. I I gotta think that they’re in California, Florida, Texas, or Louisiana. Those are, those are like my, my big states for them.
Henry:
Okay. Okay.
Dave:
I know Cape Coral’s like big, but I don’t think it’s gonna be on this list ’cause it’s too small of a city. So my first thought was San Francisco or San Jose.
Henry:
Okay.
Dave:
Like that whole Bay Area.
Henry:
Okay.
Dave:
Then I think James lives in one of ’em. Phoenix is my other guess. And I think Nashville where like three of them I had up there. I would’ve said Austin. But those are my other ones.
Henry:
James,
James:
Gimme
Henry:
Two
James:
Cities. Ooh, two cities. You know what I’m going with the ones I do live in ’cause I’m feeling it the most.
Dave:
Wow.
James:
So I’m going to Seattle and Phoenix. The, the two places I, uh, have most of my money in right now.
Dave:
So this is for personal
Henry:
Experience.
Kathy:
Uh, Seattle and San Francisco.
Henry:
Seattle and San Francisco. All right. Drum roll please. The winner is Dave Meyer. He nailed both cities. He got, he got San Jose specifically said San Jose and Phoenix. No, that’s not doing well. So you’re,
Kathy:
Wow.
Henry:
But San Jose was six on the list. Phoenix is number seven. Number one is San Diego with a 5%, 4.9% price decrease since last year in September 24.
Kathy:
Ooh. Buyer opportunity
Henry:
Number two, Miami, Florida, 4.8%.
Kathy:
Yeah, that tracks
Henry:
Number three. Kathy, I thought for sure you were gonna go hometown. Los Angeles, 4.8% decrease.
Kathy:
I did not know that.
Henry:
Number four Austin. Number five. New York City, New York, New Jersey.
Kathy:
Really?
Dave:
Yep.
Henry:
I
Kathy:
Didn’t
Dave:
Know
Henry:
That. 4.7%. San Jose, 4.6. Phoenix, 4% Dallas Fort Worth 3.3%. Boston, 3.3%.
Dave:
Boston. Okay.
Henry:
Boston 3.3%. And number 10 is Sacramento, California with 3%.
Dave:
Okay. All right. Well that was fun. Yeah. We should do more trivia.
Henry:
Absolutely.
James:
I feel like Austin has had zero rebound since the rates have spiked. Like it’s the only one that hasn’t gone like this. It just keeps just kind of going like this.
Dave:
Yeah. Even if you look at like the California markets, they’ve kind of been up and down the last few years. It’s like sort of random. Florida’s been sort of consistently down. Mm-hmm
James:
About news article from Yahoo Finance was all, all good things. It says layoffs hit Amazon’s up target and it’s fueling more cuts. And so Amazon announced over 14,000 layoffs. And this has been a trend with just all big tech right now is just slowly cut things back. And a lot of this is due to AI. And then also they were just being very frothy during that hiring process. You know, like during the pandemic there was like these tech wars going on where there was recruiters and they were stealing people and throwing money out. And I think there’s just a lot of bloat going on to where they’re starting to cut that back. And the reason I do feel like this is so important is because as investors, I’m really trying to get planned ahead for 2026. What do I wanna buy and what do I want to target?
And these are not like low paying jobs. Like a lot of people were speculating that it was gonna be like kind of lower tech paying jobs that were being replaced with ai. The average salary for these layoffs were about 110 to $135,000. And that does not include the vesting in the stock that these people also receive, which is on average around 20 to $40,000 a year. And so these are 150 to $160,000 jobs. And many of these tech cities, uh, Kathy, I think you would agree, like there’s a lot of dual income buyers out there. Like you got dual tech buying. So that’s a purchasing power of three to $400,000 that is really starting to get laid off. And not only that, it’s making that buyer pool very afraid to make any kind of decision because they don’t know what’s happening with the world of ai. They are very not confident in their job. Whereas in the pandemic, if you were talking to someone in tech, they’re like, oh, I’m getting offers everywhere. I mean, the amount of people I saw go from Microsoft to Amazon to Apple and like a two year period. Yeah. They’re just moving, moving now. No one wants to move. I can tell you that much. And so, you know, I, I’ve really been digging into where’s the buyer pool, you know, I’m in Washington, there’s a lot of tech going on that demographic of buyer, they’re typically buying 1.2 to $1.5 million houses. And that’s exactly where we’re seeing the gap in our market right now.
Henry:
Mm-hmm
James:
Henry:
Do you feel like this is gonna have an impact on inventory from people who may have already purchased and now may not be able to stay in their home?
James:
Um, you know, with that buyer pool, from what I saw, most of those buyers were trading up anyways. So their down payments were pretty hefty. They weren’t like your low down 5%, 10% down buyers that were buying these 1.5. So a lot of these buyers were putting 30, 40% down when they were trading up. And so I think their, their current mortgages are okay and they’re not gonna be selling unless they get transferred to a different region. But I do feel like the consumer spending’s gonna drop quite a bit. You know, it’s gonna go back to like, Hey, I need to pay my mortgage and then whatever I left over, I’m gonna go spend money elsewhere. And so I don’t think we’re gonna see a lot of inventory coming there, but I definitely don’t think we’re gonna see a lot of buyers in that range.
Kathy:
Yeah. We are experiencing something that our ancestors never had to experience and it’s going to be massive transformation over the next five years. And anyone who thinks things will be the same old same old is just not paying attention. AI is going to change everything. And this has been predicted, I’ve been new doing news stories on this for 10 years, that the, actually the white collar jobs are the ones at that the most risk. And it’s the blue collar job so far, not as much. We are going through major transformation and if you are not paying attention, you’re gonna be in trouble. That’s the bottom line. It’s a very interesting time that we’re living in.
Dave:
Yeah. I am simultaneously terrified by AI and also think it’s way overblown. I I just, you know, those are completely contradictory ideas
Kathy:
Yeah. Think about a year from now, five years from now, it’s, we can’t even imagine. But I think
Dave:
That’s good though, Kathy. ’cause I, I feel like it will drip in a little bit more than people feel like it’s gonna be this cliff where it’s like, oh my God, everyone’s getting replaced. It might happen a little bit more gradually, which hopefully will give time for the new jobs that will come in an AI economy to, to come in. But just in general, I think this is just bad for the economy right now. Even though like I was trying to pull together data. ’cause we’re not getting government data right now on unemployment because there’s a shutdown. But I was looking at state data and private data and like, it’s not that bad. If you look at the overall unemployment rate, it’s really not changing all that much from the data that we have. But it’s high profile, high paying jobs. And if you wanna go one step deeper, if you look at consumer spending right now, I think it’s 50% of all consumer spendings by the top 10% of earners right now.
It’s crazy. And so if you start to see pullbacks in spending from the top 10%, corporate profits are gonna start to see that. Like, you’re gonna start to see that reflected in the stock market, I would think. And so I I do think more than it’s really an emergency, it might have a psychological effect on the rest of the country. And as James said, a lot of it’s just done about uncertainty. It’s not like a lot of these people are necessarily, you know, they’re gonna get foreclosed on or they’re going delinquent, but they might delay making big financial purchases just given. There’s just so much uncertainty right now. It feels like it’s sort of inevitable for purchasing, especially on big ticket items like housing to, to start to feel it at some point
James:
When the people are getting rehired too. They’re just getting rehired from what I was reading. Like it’s just a little bit less too, right? So their, their income’s dropped 10% or so as they’re getting rehired. So it’s not like there’s just, they’re all at the food bank line looking for, you know, like Right. They can’t find work, right? They’re finding work. But that’s why it’s so important to pay attention to that kind of median income in whatever city that you’re in, right? And what’s going on around you. You can listen to everybody and the different strategies, but where are you investing? Where’s the job growth? Where’s the job cuts? And you really gotta pivot with that. And they’re everywhere, right? Midwest, Ohio, they saw 40,000 layoffs in 2025 manufacturing corporate cuts. That’s not the same income bracket, but where, how much are those people making? And then look at what do they buy? What do they rent? ’cause there could be a gap in the, in that market.
Dave:
All right. Well this has been a great episode. Thank you guys. I, I thought all these stories were really, uh, helpful. So just to summarize, Kathy brought us a story about how housing demand is actually up year over year, but despite that we are seeing prices decline in a lot of markets as Henry shared. We’re also seeing layoffs, which I think is a big thing to watch as we go forward. I don’t think it’s an emergency just yet, but obviously if this is the beginning of a trend that’s gonna impact the market. And then of course we have quantitative easing to look out for in the next six months, which is the big X factor that we all get to wait and see if that comes around again. But this has been a lot of fun. Thanks for listening. We’ll see you next time.
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This article is presented by Connect Invest.
U.S. commercial real estate is under mounting pressure as vacancy rates hit record highs—first in offices, and now creeping into multifamily and industrial properties. A decade of cheap capital and aggressive development has caught up to landlords facing slower rent growth, higher refinancing costs, and rising delinquencies across several sectors. Moreover, both commercial and residential real estate is undergoing profound changes as large metro areas cease to be automatically attractive as job destinations.
Why are multifamily markets turning risky, and what strategic changes can investors make to mitigate the risks and protect their margins?
Warning Signs for Commercial Real Estate
According to CBRE, total investment volume is still expected to rise roughly 10% this year to $437 billion, but much of that activity is concentrated in distressed sales and recapitalizations. Meanwhile, the Mortgage Bankers Association reports that delinquencies ticked up across lodging and industrial assets in Q1 2025, signaling stress that could spill into housing credit next.
The market segment that is most obviously ailing is the commercial office segment. According to a press release from Moody’s Analytics, the vacancy problem faced by the office real estate market is severe enough to signal a “structural disruption rather than a temporary downturn for the multitrillion-dollar sector.”
Office vacancy rates in major commercial hubs, notably San Francisco and NYC, have reached unprecedented levels (27.7% and 23%, respectively) as of the second quarter of 2025, according to recent Moody’s data. The pre-pandemic vacancy rate in San Francisco was just 8.6%.
The decline of office space vacancy is creating a tense situation for owners-investors and commercial building landlords. They are facing refinancing problems with lenders, who are increasingly viewing this type of investment as risky. This problem is exacerbated by the fact that many lenders of commercial space loans are smaller regional banks, which are even more likely to make these lines of credit more expensive in order to protect themselves from increasing default activity.
Adaptive reuse, aka apartment conversions, may solve part of the problem, with some success stories. However, this too is risky, since converting office spaces into apartments is fraught with structural and legal challenges.
Multifamily Markets in Trouble
The most obvious answer for investors considering pivoting away from office space is multifamily real estate. But is investing in apartment new builds as safe a bet as it once was?
There are indicators that the multifamily market—long considered the safest corner of real estate—now faces its own headwinds. A wave of new apartment supply, softening rent growth, and stubbornly high interest rates have compressed margins for developers and owners alike. For lenders and investors, that means reevaluating credit exposure and shortening duration risk.
After nearly a decade of rent growth turbocharged by the surge in demand during the pandemic, the multifamily market is stagnating, with growth of just 0.2% recorded this year, according to RealPage numbers. The multifamily building frenzy in response to unprecedented demand for housing in popular relocation areas like the Sunbelt has finally caught up with this segment of the market.
The situation is unlikely to improve in 2026 and beyond; with interest rate decreases to below-6% levels on the horizon, many renters will inevitably become homeowners in the coming years.
These are normal market fluctuations that inevitably result from supply-and-demand imbalances and economic ups and downs. However, what investors must understand going forward is that there are larger shifts at play here—they are societal, not merely economic, and likely to be permanent.
The fates of the office market and multifamily segments are profoundly interlinked. Both are suffering from a historic shift in how Americans work, and what is happening to urban areas as a result.
A substantial majority of people are no longer prepared to simply rent an apartment close to where their office is; they no longer have to. Renters actively choosing multifamily developments are now likely doing so for other reasons, like great amenities or a walkable and exciting downtown area, where they can enjoy life outside work.
Refining Your Portfolio Is Key
A multifamily investor’s biggest concern is no longer so much falling rents as uncertainty about long-term occupancy prospects.
The most obvious solution here is refining one’s portfolio-building strategy and shortening debt duration whenever possible. What does refining mean here?
Think of the multifamily investing of years past as a blunt tool: You go wherever rents are currently the highest. Now, however, selecting where to invest requires a detailed understanding of the overall health of a specific metro area. What does it have to offer renters in the long term?
A more refined portfolio cherry-picks multifamily investments that offer the best longitudinal occupancy rates. Going forward, this will be the best way for investors to mitigate risk, secure favorable financing, and protect their margins.
Simply chasing rent growth just won’t do as a viable investment strategy in 2026. It’s all about choosing lower-risk, shorter-term investments in locations where multifamily real estate remains attractive for a plethora of reasons—not just the one reason (high rental yield) that was good enough circa 2019.
Connect Invest
This is exactly where Connect Invest’s Short Notes come in. By funding diversified, short-term real estate debt investments, investors can earn fixed, high-yield interest while limiting exposure to long-horizon vacancy and rent risk. Connect Invest’s underwriting process actively stress-tests each project against occupancy and income fluctuations—so even if vacancies rise or rents fall, investor returns remain stable.
Instead of worrying about the next vacancy report, investors can keep their capital moving—and their returns steady—with Connect Invest’s data-driven approach to short-term real estate credit.
Buying a rental property isn’t only about how much money you earn, but also how much debt you have. If you plan to get a loan to finance your investments, maintaining a healthy debt-to-income ratio is essential. For investors, particularly those with several properties in their portfolio, carrying a lot of debt can be an issue, which is why offsetting it with high income is paramount.
The Federal Reserve has just released its national debt-to-income map, which shows where the best-qualified buyers actually live. For fix-and-flippers and landlords looking to buy and hold, it provides an invaluable snapshot of what lenders look for in borrowers and the regional shifts at play.
The map shows that most qualified buyers are not necessarily where you think they are.
What Is DTI?
A debt-to-income ratio, as the name suggests, measures a person’s debt when measured against their income. The highest DTI averages—over 2.0—mean residents carry $2 in debt for every $1 of income.
When it comes to DTIs, less is more. The more income, the less debt wins. For example, if half your monthly income went toward paying off your recurring monthly debt, your DTI would be 50%, which is not good. A DTI of 35% or less is considered favorable by lenders.
Shifting Debt-to-Income Ratios: The 2025 Landscape
Historically, the wealthier states on both coasts have been renowned for both high housing prices and equally high buyer and rental demand. That’s because many of these areas are considered “barrier” markets, i.e., there is a barrier to land availability, forcing prices up.
According to the Federal Reserve’s map, however, the most favorable borrowing environments are not found where the uber-wealthy live in New York and California, but rather in the Midwest—Pennsylvania, Wisconsin, and Ohio— here, DTI rates are lower, meaning that qualified buyers here are more likely to receive loans.
For flippers, it means these markets offer a greater likelihood of finding qualified buyers. For landlords, the lending environment here is more favorable for buying investments, assuming the prospective buyer falls into a favorable DTI category.
Mortgage Balances and Buyer Limitations: Local Trends
This might not come as a surprise, but debt in America is on the rise. The combination of low inventory and higher interest rates creates a toxic borrowing environment, pushing up house prices and mortgage balances, particularly in some coveted urban areas.
The Quarterly Report on Household Debt and Credit for the second quarter of 2025, based on the New York Fed Consumer Credit Panel, showed that total household debt increased by $185 billion from the first quarter to $18.39 trillion. There are now 67 cities in the U.S. where the mortgage balance averaged $1 million or more as of June 2025, according to the credit reporting bureau Experian. Here are the top 10, with the average balance:
- Golden Oak, FL: $3,627,594
- Gulf Stream, FL: $3,206,007
- Golden Beach, FL: $2,969,951
- Captiva, FL: $2,620,156
- Atlantis, FL: $2,585,199
- Montecito, CA: $2,487,787
- Hidden Hills, CA: $2,149,578
- Atherton, CA: $2,137,851
- Hunts Point, WA: $2,016,164
- Sagaponack, NY: $1,977,857
As the list shows, Florida, not California or New York, is the state with the top five cities with the highest mortgage balances. This means that here, investors must be prepared for tighter margins and increased competition, even as local incomes rise. Conversely, cities across the Midwest and the Rust Belt, such as Cincinnati and Cleveland, still remain attractive propositions for investors due to lower mortgage burdens and sustainable DTI profiles.
Lower House Prices Can Offset Rate Fluctuations and DTI Ratios
“When people are staring at a 6% or 7% [mortgage] rate, they just start to get reluctant,” Rick Arvielo, chief executive and co-founder of mortgage lender New American Funding, told the Wall Street Journal in August. “Affordability is still a major issue.”
Since then, the Fed has cut interest rates twice, most recently in October, but rates remain volatile, hinging on every word from Fed chair Jerome Powell. His recent comments about halting rate cuts at the Fed’s December meeting sent rates back up after his recent cut.
Favorable neighborhoods for mom-and-pop investors—flippers and landlords—boil down to lower prices and neighborhoods with buyers with favorable DTI, making it the best environment for investing and lending.
Soaring National Debt Could Pose Big Problems
A homebuyer’s revolving monthly debt is tied to their interest rate, which in turn is tied to the national financial landscape. In May, the New York Times reported some analysis that predicted President Trump’s “Big, Beautiful Bill” could inflate America’s debt to more than 130% of the size of its entire economy.
“A crisis always feels far off until you’re in one,” Natasha Sarin, president and cofounder of the Yale Budget Lab, said. “We don’t know exactly where that cliff is, where you can’t breach debt levels” of a certain size. “But we know that we’re inching closer to whatever that point is.”
These sentiments were echoed recently by Tesla CEO Elon Musk, who told podcaster Joe Rogan, “It would be accurate to say that even unless you could go like super Draconian…on cutting waste and fraud, which you can’t really do in a democratic country, then…there’s no way to solve the debt crisis.”
Musk added that artificial intelligence (AI) and robotics could be a way out of debt. “We need to grow the economy at a rate that allows us to pay off our debt.”
Interest Rate Cuts Might Not Move the Needle
For real estate investors hoping that Fed rate cuts will have the desired effect if the national debt remains dangerously high, that could be wishful thinking. Musk’s comments from his appearance on Joe Rogan’s podcast earlier this year appear to hold in unpredictable economies: Tangible assets such as real estate become more valuable because people will always need a place to live, regardless of the economic environment.
“It is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high,” Musk advised.
Final Thoughts: Affordability and Long-Term Stability Are Keys to Sound Investing
The debt-to-income map is a blueprint that investors can follow to locate some of the most stable housing markets in the country, where traditionally conservative investing principles of low debt and paying bills on time prevail. They are not the most glamorous markets, but they also don’t have a large percentage of highly leveraged residents. In turbulent economic times, low debt-to-income states such as Ohio, Pennsylvania, and North Dakota are some of the most resilient markets in the U.S.
Realtor.com and the Wall Street Journal named Manchester-Nashua, NH, as its top market for the second straight quarter in its Fall 2025 Housing Market Ranking due to its “sustained demand, brisk sales activity, and notable year-over-year price growth,” coupled with its balance of “desirability with relative value.” New Hampshire has a relatively low DTI ranking of 1.4.
In 2018, I started over with nothing. By 2025, I’m in spitting distance of the Two-Comma Club.
When I first started investing in real estate in my mid-20s, I made some bad investments in rental properties. I never got a mentor—I learned every lesson the hard way.
By my late 30s, I couldn’t afford to keep subsidizing those early investments with my income each month. I unloaded every property I owned.
Every good investment I’d ever made got wiped out by the bad ones. I turned 38 with nothing to show for 16 years of working adulthood. It was like falling on the wrong square in a board game and being sent back to “Start.”
So how did my wife and I go from $0 to nearly $1 million in less than seven years?
The Two-Pronged Attack to Build Wealth Fast
To build wealth fast, you need to save a huge percentage of your income, and you need to invest it for high returns.
It helps to have a high income, of course, but my wife and I have never had that. Katie’s a school counselor (teacher salary), and my company SparkRental has always been more labor of love than cash cow. In most months, I earned more as a financial writer than as an entrepreneur organizing an investment club of peers.
That didn’t stop us.
Aggressive Savings Plan Part 1: Expat Life
For most of the last seven years, we lived overseas. That enabled us to live a comfortable life on my wife’s income and benefits alone, and save and invest all of my income.
The international schools where my wife worked provided us with free furnished housing. We paid reduced U.S. income taxes due to the foreign earned income exclusion. For the last six years, we didn’t even have a car.
And of course, we enjoyed a lower cost of living overseas.
The bottom line: We enjoyed a savings rate of 50%-70% for each of those years, which we turned around and invested for compounding returns.
Aggressive Savings Plan Part 2: Living Stateside Again
In June, we moved back to the States to be closer to family. We knew we’d take a financial hit, so we prepared for it.
We still manage a 35% savings rate, even living in a major East Coast city.
First, we negotiated a discount on rent. As a former landlord myself, I know my way around these conversations. “My wife and I each have credit scores in the mid-700s. We don’t have any pets. And if you’ll accept $____, we can prepay the first six months’ rent upfront.”
Not every landlord was willing to take hundreds off the rent in exchange for prepayment. But we only needed one to agree.
Second, my wife and I decided to try sharing one car. We bought a used Hyundai Tucson, and in over four months of living back in the States, we’ve only had one or two scheduling conflicts around the car. Sharing one car not only saves us on car payments, but also on insurance, gas, maintenance, and more.
We use a high-deductible health plan, in conjunction with an HSA, to lower our tax bill.
We contribute to other tax-advantaged accounts to further lower our tax bill. Plus, we score some great tax savings through our real estate investments—but I’m getting ahead of myself.
And yes, we go out for fewer meals and coffees than we did abroad. But so what? I know how to cook, as do many of our friends, so we still eat plenty of restaurant-quality meals.
Aggressive Investing
I didn’t save $1 million worth of pennies in a jar over the last seven years. Our investments did a lot of the heavy lifting for us.
As I’ve written about before, I invest about half of our portfolio in stocks, and the other half in real estate.
Stock investing strategy
I keep my stock investments simple: index funds rebalanced by a robo-advisor. I personally use Schwab’s, which is free. I have it set to pull money out of my checking account every single week and invest it automatically as a form of dollar-cost averaging.
I also buy a few index funds manually, including more international stock funds.
It’s seriously that simple.
Real estate investing strategy
I hated being a landlord—and that goes for the good rental investments I made later on, not just the early lemons.
Today, I invest passively through the co-investing club. Every month, we meet on Zoom and vet a new investment together. Any member can invest $5K or more, and together, we invest $400K to $850K.
In some months, it’s a private partnership; in others, a private note; in others, a syndication. Some investments are more income-oriented, like the land fund we invested in this month, paying a 16% distribution yield. Others are more growth-oriented, and others combine both income and growth.
This lets me practice dollar-cost averaging with my real estate investments, too. Over time, the returns have compounded to drive my net worth ever higher.
Want Extraordinary Results? Stop Being Ordinary
The average person will never build real wealth, regardless of income. As of last check, the average savings rate in the U.S. is a paltry 4.6%.
On the investing side, the average American fares just as badly. A 20-year analysis from 1998 to 2017 found that while the S&P 500 averaged a 7.2% annualized return during that period, the average retail investor earned just 2.6%.
Think you’ll get rich saving 4.6% of each paycheck and earning 2.6% returns on your money? You’ll barely keep pace with inflation.
Aim for a 25%, 35%, or 45% savings rate. Then invest for 10%-20% returns.
Do that, and you have a shot at becoming a millionaire within the next five to 10 years, even if you’re starting from scratch like I did in my late 30s.
Employment is down, and rental demand is up. That’s the narrative sweeping the country, and landlords are learning how to make lemonade from the lemons of low housing affordability.
As home sales collapse and inventory expands, a slow buyer’s market has turned into a hot rental one. Although an abundance of available rentals in the U.S. is “tipping [the market] in favor of tenants,” according to CREDaily, astute landlords can leverage demand in their favor.
Advantage: Renters
A surge in new apartments and slower rent growth (national average rents dropped 0.3% in September—the sharpest decline for that month in over 15 years, according to CoStar) follows years of steady rent increases. Apartment rentals are stagnant in many markets, according to CREdaily, with Austin, Denver, and Phoenix seeing the most significant rent cuts. In these and other markets, tenants are able to negotiate concessions like move-in specials, shorter leases, and upgraded amenities.
For landlords facing delinquency and turnover from cash-strapped tenants, leveraging the need for housing means being flexible: balancing affordability for tenants with ensuring their long-term residency.
Job Anxiety
RentRedi data for October showed that 83.5% of tenants paid their rent on time; however, with greater economic uncertainty, including a prolonged government shutdown (now the longest in history), that could change.
It’s already affecting the homebuying market, with over 15% of home purchases falling through in the summer, the highest rate for that time of year since 2017. This increase is boosting inventory in the Sunbelt.
“What you don’t forecast is job anxiety being as deep as I think it is,” Tony Julianelle, chief executive of real estate investment firm Atlas Real Estate, told the Wall Street Journal.
Commenting on the recall of former Sunbelt renters back to the office, David Schwartz, chief executive of real estate investment firm Waterton, told the Journal: “There was a saying: ‘Stay alive until 2025.’ We’re in the camp, ‘We’ll be in heaven in 2027.’”
For landlords looking for a fix in 2026, there are some options available. Not all Sunbelt cities are struggling. A RentCafé analysis from September shows Miami is the country’s most competitive rental market, even in the peak season of the fall, with the Midwest’s Chicago not far behind.
How Short- and Mid-Term Rentals Factor Into Higher Inventory
The evolving rental landscape means landlords need to adapt and be flexible to boost cash flow. Short-term rentals (STRs) and mid-term rentals (MTRs) create another avenue for diversification in the right markets, so long as an efficient management system is in place.
Short-term rentals
STRs have been in the news recently due to tougher regulations. According to AirDNA, STR supply is expected to increase modestly by 4.7% in 2025. Demand for unique, experience-driven stays remains robust, as does demand from digital nomads.
To stay competitive, STR landlords are switching to direct bookings, becoming less reliant on platform fees, and leveraging artificial intelligence (AI) tools to offer premium amenities and designs, according to RiskWire.
Mid-term rentals
MTRs that offer one to six months of booking, appealing to traveling nurses, executives, and insurance claim clients, offer 10% to 30% higher rents than traditional leases, according to Rent To Retirement.
MTRs offer landlords a flexible middle ground between long-term tenants, providing a low-stress option in cities that prohibit STRs.
Candice Reeves, content marketing manager at Baselane Property Management, wrote in a recent report that analyzed information provided by 415 U.S. rental property owners:
“With more rental supply entering the market, landlords in high-supply areas face increased competition and declining rents. Property owners with newly constructed buildings in these markets have had to adopt aggressive leasing strategies to fill vacancies, including rent concessions and incentives.”
The report provided key insights into the state of a shifting market:
- 82% of respondent landlords faced higher ownership costs, and 26% saw expenses jump by more than 20% in 2024.
- Major cost drivers included property taxes (60%), maintenance/repairs (57%), utilities (49%), and insurance premiums (43%)
- Changes in tenant protection laws, including rent control in several states, have made compliance a challenge for 17% of landlords.
Winning Strategies to Maximize Cash Flow
Like any business, landlords need to pivot and adapt to a changing market, using every tool at their disposal.
Creativity is the key to longevity for landlords. Being able to move with the shifting currents of the real estate market and stay liquid to do so allows landlords to survive.
A mistake many investors make is leveraging everything in their quest to attain more doors—only to find that when the market bottoms out or a black swan economic event, such as a pandemic or an earthquake, upends things, there is not enough cash to pivot and survive.
Here are a few strategies to stay in the game.
Diversify lease terms
Large management companies have this technique down to a science, blending three-month, six-month, and 12-month rental models, or mid-term rentals.
Adding 15-month and 24-month leases into the mix ensures leases don’t expire during tough rental periods, and are servicing the widest demographic possible. Some of this is covered in RABBU’s 2025 STR Rental Trends.
Optimize technology for efficiency
While AI can’t force a tenant to sign a lease, it can enable property management systems to work more efficiently by automating listings, maintenance, and rent collection. It can also track occupancy, tenant communication, and expenses.
Differentiate the property
This is a big factor in the short-term rental sector, but it can also help properties be leased longer by making them stand out from the competition. EV chargers, private office nooks, and innovative tech improve reliability and can justify tenants paying market rents.
Offset escalating expenses
Property insurance premiums are expected to have risen by 8% this year and 70% since 2019, killing rental cash flow. Energy-efficient upgrades, preventive maintenance, and diversified coverage are some ways to help offset these expenses.
Focus on retention
It costs approximately $4,000, on average, to replace a tenant, according to global payments company ZEGO. That’s around 30% to 50% more in additional costs than retaining an existing tenant.
TULU, a company that helps property management companies increase efficiency, suggests landlords do these things to improve tenant retention stats:
- Being proactive with maintenance
- Investing in security
- Simplifying move-in
- Being pet-friendly
- Canvasing for feedback
- Offering early renewal incentives
- Having dedicated package lockers for Amazon deliveries
- Implementing robust screening
- Being responsive and supportive to tenants
- Offering renters insurance guidance
Final Thoughts
Despite tough competition from other vacant apartments, landlords have one thing in their favor: They own real estate, and people will always need a place to live.
The next step is calibrating their properties to attract the most tenants. The most crucial factor in doing that is gauging the rent people are willing to pay for your property, then going above and beyond with decor and amenities to give them great value for their money while covering expenses.
Successful landlords who have been around a long time will tell you real estate is all about the long game. The most money is made from equity appreciation, not cash flow. If, during tough times, you can cover your costs and minimize tenant turnover by offering outstanding service to highly qualified, meticulously screened tenants, you will ultimately come out ahead through appreciation and debt paydown, not to mention the tax advantages.
Investors should remain liquid to absorb unforeseen expenses. Invest without your ego demanding you keep accruing doors, but rather with a cool head that first questions whether you can keep the doors you have, even if it means dropping rents in the short term to gain an advantage over your competition and survive the long term.
This article is presented by Steadily.
If you opened your insurance renewal notice lately and had to read the number twice, you’re not alone.
Landlord insurance premiums jumped nearly 8% in the first quarter of 2025 alone. You read that right; that’s not annual growth spread across 12 months; that’s just one quarter.
For real estate investors already navigating tight margins, rising mortgage rates, and competitive rental markets, insurance costs are becoming the silent profit killer. A property that penciled out beautifully two years ago might barely break even today, and insurance is a huge part of that equation.
Premium increases are hitting portfolios nationwide, from single-family rentals in the Midwest to multifamily properties on both coasts. Industry analysts are projecting continued upward pressure through at least 2026.
So what’s driving this surge? Why are premiums climbing faster than rents in most markets? And more importantly, what can you actually do about it without leaving your properties underinsured or exposing yourself to catastrophic risk?
We’re breaking down the real forces behind rising insurance costs, showing you exactly where premiums are spiking hardest, and giving you actionable strategies to protect your cash flow without compromising coverage.
The Numbers Don’t Lie: Premium Increases by Region
The insurance crisis isn’t hitting every market equally. Some regions are seeing modest bumps, while others are experiencing sticker shock that’s forcing investors to reconsider their entire portfolio strategy.
The hardest-hit markets
Florida leads the pack, with some landlords reporting premium increases of 30% to 50% year over year. In Miami-Dade and Broward counties, it’s not uncommon to see policies that cost $2,500 annually in 2022 now pushing $4,000 or more. Hurricane Ian’s $112 billion in damages was the catalyst for increased premiums, and they just seem to go up with every quarter.
Texas is close behind with premium increases. Between hailstorms, tornadoes, and Winter Storm Uri’s lingering impact on insurer confidence, landlords in Dallas, Houston, and Austin are facing 20% to 35% increases. Properties in hail-prone suburbs north of Dallas have seen some of the steepest jumps.
California’s story is wildfire-driven. Counties in and around wildfire zones (think Sonoma, Shasta, and Butte) are seeing 25% to 40% increases, and some insurers have stopped writing new policies in high-risk areas entirely. Coastal properties also face rising premiums due to erosion and flood concerns.
Colorado rounds out the top pain points. Hailstorms and the Marshall Fire in 2021 put the state on insurers’ radar. Denver-area landlords report 15% to 25% increases, with higher jumps in Boulder County.
The better (but not great) news
Midwest and Southeast markets outside Florida have seen more moderate increases in the 10% to 15% range. But “moderate” is relative when you’re managing thin margins, and these increases compound annually.
Even traditionally stable markets like the Pacific Northwest are starting to feel pressure as extreme weather events become more frequent nationwide. This raises the question: What’s actually driving these increases across the board?
The Five Forces Driving Insurance Costs Up
Understanding why premiums are rising helps you make smarter decisions about coverage, risk mitigation, and where to invest next. Here are the five major forces reshaping the landlord insurance landscape in 2025.
1. Climate change and extreme weather events
Insurers are paying out record claims due to hurricanes, wildfires, floods, and severe storms. According to NOAA, the U.S. experienced 28 separate billion-dollar weather disasters in 2023 alone. That’s not just one bad year, but a trend of severe weather damage.
When insurers pay out more in claims, they raise premiums across entire regions to rebuild reserves. Even if your property has never filed a claim, you’re part of a risk pool that’s getting more expensive to insure.
2. Inflation in construction and repair costs
The rising premiums are not just a result of how often claims happen. They are a result of how much each claim costs to resolve. Lumber, labor, HVAC systems, roofing materials, you name it—it all costs significantly more than it did three years ago.
In 2020, replacing a roof might have cost $8,000. Today, that same job runs $12,000 or more. Insurers have to account for replacement cost increases when setting premiums, which means your policy gets more expensive, even if nothing about your property has changed.
3. Increased claims frequency
More tenants are filing claims. More slip-and-fall incidents are turning into lawsuits. Water damage from aging plumbing systems is on the rise as rental housing stock ages. The combination of older properties, higher tenant turnover, and more litigious tenants means insurers are writing more and more checks.
4. The reinsurance market is tightening
Most landlords don’t realize that insurance companies buy insurance too. It’s called reinsurance, and it protects carriers from catastrophic losses. When reinsurance costs go up (which they have, dramatically), those costs get passed down to you.
Global reinsurance rates have jumped 30% to 50% in some markets due to increased disaster payouts worldwide. Your landlord policy is indirectly subsidizing hurricane damage in the Caribbean and wildfires in Australia.
5. Litigation and settlement costs rising
Legal costs aren’t going down. When a tenant or visitor gets injured and sues, settlements and jury awards are larger than ever. Insurers are factoring higher legal defense costs and bigger payouts into their pricing models, especially in states with plaintiff-friendly laws.
What This Means for Your Cash Flow
These five forces represent structural changes in the insurance market that will likely persist for years. So, beyond just understanding the “why,” you need to know exactly how this impacts your bottom line.
When insurance premiums rise, these unexpected additional costs directly erode your net operating income, compress your margins, and can turn a performing asset into a break-even headache.
Let’s run the numbers on a typical scenario.
Example: Single-family rental in Texas
You own a rental property generating $2,000 per month in rent. Your annual insurance premium was $1,500 in 2022. After a 25% increase, you’re now paying $1,875. That’s an extra $375 per year, or about $31 per month.
Those numbers seem pretty reasonable, and definitely not bank-breaking. But if your net operating income was $800 per month ($9,600 annually), that $375 increase just ate nearly 4% of your annual NOI. Your cash-on-cash return dropped accordingly.
Now multiply that across a 10-property portfolio. Suddenly, you’re losing $3,750 per year in cash flow. That’s real money you could’ve reinvested, used for maintenance reserves, or simply kept as profit.
The compounding effect
These premium increases compound. If premiums rise 10% annually for the next three years, that $1,875 policy becomes $2,500. Your $31 monthly increase becomes $52. Over five years, you’ve paid thousands more in cumulative premiums, without changing anything on your property.
Additionally, if you’re financing properties, higher insurance costs affect your debt service coverage ratio, potentially limiting your ability to refinance or secure new loans.
You can’t afford to treat insurance as a set-it-and-forget-it line item anymore. It’s a variable expense that requires active management. Fortunately, there are proven strategies you can implement right now to control costs without sacrificing coverage.
Smart Strategies to Control Your Insurance Costs
You can’t control the national insurance market, but you can control how you respond to it. Here are proven tactics to keep your premiums in check without sacrificing critical coverage.
Invest in risk mitigation
Insurers reward landlords who actively reduce risk. Simple upgrades can translate into meaningful premium reductions. Consider installing impact-resistant roofing in hurricane zones, upgrading electrical panels in older homes, or adding monitored security systems. Many insurers offer 5% to 15% discounts for these improvements, and landlords can qualify for bonus depreciation tax breaks for making upgrades to their rental properties.
Water damage is one of the most common claims insurers process. Installing leak detection sensors, replacing old water heaters before they fail, and upgrading to PEX or copper plumbing can lower your risk profile and your premium.
Shop your policy regularly
Carriers compete aggressively for new business, and the best rate you got three years ago is almost certainly no longer competitive. Set a calendar reminder six weeks before renewal to get at least three quotes from different insurers.
When evaluating your new coverage, don’t just compare premiums. You should keep a close eye on coverage limits, deductibles, and exclusions. A cheaper policy that leaves you underinsured or exposed to gaps isn’t a good deal.
You can work with a company like Steadily that will shop for the best coverage for you.
Document everything
Insurers base premiums on perceived risk. If you’ve made upgrades, completed maintenance, or improved your property, document it with photos, receipts, and inspection reports. This documentation can help you negotiate better rates or justify lower premiums with underwriters.
Consider higher deductibles strategically
Raising your deductible from $1,000 to $2,500 can reduce your premium by 15% to 25%. If you have strong cash reserves and rarely file claims, this can be a smart move. Just make sure you can comfortably cover the higher out-of-pocket cost if disaster strikes.
Work with an investor-focused insurance partner
Most landlords make a critical mistake by assuming that all insurance is created equal. Generic homeowner’s insurers treat rental properties like an afterthought, applying residential models to commercial assets. Rental properties require more specific policies that cover secondary investment properties. If you continue to use a general homeowner’s insurance policy for your rental portfolio, you’ll likely pay more for coverage that doesn’t actually fit your needs.
Working with a provider (like Steadily) that specializes in landlord insurance from the ground up can help you find coverage that meets your specific investor needs.
Why Specialized Landlord Insurers Like Steadily Make a Difference
When you’re running a rental property business, you need an insurance partner that understands your world. Steadily was built specifically for real estate investors, and that focus makes all the difference.
Built for landlords, not homeowners
Steadily’s underwriting models, coverage options, and pricing structures account for the unique risks and needs of rental property owners. They’re not trying to shoehorn your investment properties into a homeowner’s policy template designed for someone living in their primary residence.
This specialization translates into competitive pricing, even as the broader market tightens. While traditional insurers are pulling back from high-risk markets or dramatically raising rates, Steadily leverages technology and data to price risk more accurately and efficiently.
Fast quotes, nationwide coverage
Need coverage in high-premium states like Florida, Texas, or California? Steadily operates nationwide and doesn’t balk at challenging markets. Their digital-first platform delivers quotes in minutes, which means you can compare options quickly and make informed decisions without waiting on brokers or underwriters.
If you’re managing multiple properties across different states, Steadily’s investor dashboard centralizes all your information. With one login, you can access all your policies, renewal dates, and coverage details.
Technology that works for you
Steadily’s platform is both fast and smart. You can upload inspection reports, renovation photos, or maintenance records directly into your account. This documentation helps justify better rates and ensures you’re not overpaying based on outdated property information.
In a market where premiums are climbing across the board, every percentage point matters. Steadily’s investor-focused approach means you’re not subsidizing homeowner claims or paying for coverage you don’t need. You’re getting landlord insurance built by people who understand exactly what you’re trying to accomplish.
Take Control of Your Insurance Costs Today
Rising premiums are here to stay, but that doesn’t mean you’re powerless. The smartest move you can make right now is to compare your current coverage against what specialized providers like Steadily can offer.
Get a fast, competitive quote from Steadily today, and see how much you could save while maintaining the coverage your portfolio needs.
Click here to get your free quote from Steadily and take the first step toward controlling your insurance costs in 2025.
This article is presented by PropStream.
When I first started real estate investing, I thought securing money for a deal would be the hardest thing. (I mean, it still isn’t easy.) I quickly found out that money isn’t the problem when you find a slam-dunk deal. Now, finding that deal is actually the most challenging part of the business.
For decades, finding deals meant driving for dollars, poring over courthouse filings, or spending endless hours cold-calling owners who may or may not be interested in selling. In 2026, investors who thrive are those who combine hustle with innovative technology.
This is where PropStream changes the game. What once took weeks of manual research can now be accomplished in minutes.
Investors can stack filters to build highly targeted lead lists, then run instant comps to confirm potential profit margins. From there, skip tracing provides direct contact information, and automated mailers or digital campaigns can be triggered right inside the system. PropStream consolidates the entire lead generation process into a single, seamless workflow.
Your main question is: How do you uncover properties that actually fit your investment style?
The answer lies in going after the segments of the market where motivation is already built in. Here are 20 distinct lead types worth targeting right now, each paired with practical guidance on how to leverage them in your investment strategy.
1. Auctions
Foreclosure filings and scheduled sales flag auction properties for investors.
Best use
Identify properties approaching auction, review official filings, and run comps to set your bidding strategy before attending a sale.
2. Bank Owned (REO)
If a property fails to sell at auction, it often reverts to bank ownership.
Best use
Pull REO properties directly, verify bank or lender ownership, and connect with asset managers to negotiate bulk or discounted purchases.
3. Bankruptcy
Active bankruptcy filings often point to distressed owners.
Best use
Target Chapter 7 or 13 bankruptcies, and cross-reference with equity levels to find owners most likely to sell under pressure.
4. Cash Buyers
These are serious buyers, ideal for wholesalers.
Best use
Build a list of recent cash transactions, segmented by location, and add these buyers to your preferred contact list for quick flips.
5. Divorce
Divorces often require the sale of marital property.
Best use
Generate lists of divorce-related properties, and reach out with offers designed to provide certainty and speed during a complicated process.
6. Failed Listings
Expired MLS listings are a clear signal of motivation.
Best use
Approach sellers whose homes have failed to sell on the MLS with alternative solutions, such as all-cash offers or faster closing timelines.
7. Flippers
Investors who buy and relist properties within two years are considered active flippers.
Best use
Track local flippers to identify trends, pull comps, and explore potential partnerships or wholesale opportunities.
8. Free and Clear Properties
These properties carry no mortgage debt.
Best use
Focus on free-and-clear owners who can sell without lender involvement, making negotiations more straightforward and closings faster.
9. High Equity
Equity-rich properties give sellers flexibility.
Best use
Target high-equity owners who may accept below-market offers or creative financing options, as they will still walk away with a profit.
10. Liens
Tax and mechanic liens create financial stress.
Best use
Prioritize owners with multiple liens, and offer to relieve them of the burden with quick cash sales.
11. On Market
Active or contingent MLS listings still offer opportunities.
Best use
Monitor listings with extended market times or price reductions and structure creative offers, such as subject-to financing.
12. Pre-Foreclosures
These are properties in default, but not yet up for auction.
Best use
Contact owners as soon as default notices appear, providing them with options before they lose the property to foreclosure.
13. Pre-Probate
Ownership changes due to death can create unique opportunities.
Best use
Reach heirs early with data-backed offers, emphasizing speed, simplicity, and relief from the hassle of probate.
14. Senior Owners
Owners with decades of ownership often look to downsize.
Best use
Approach senior owners respectfully with solutions that help them cash out or transition into smaller living arrangements.
15. Tax Delinquency
Unpaid taxes are a clear motivator.
Best use
Focus on properties with several years of unpaid taxes, and present offers before the county initiates lien sales or auctions.
16. Tired Landlords
Longtime rental property owners are often burned out.
Best use
Highlight hassle-free exits and 1031 exchange opportunities for landlords ready to move on from tenant management.
17. Upside-Down Properties
When debt exceeds value, owners are left with a difficult decision.
Best use
Pursue short sale strategies or creative financing arrangements to help owners underwater on their mortgage.
18. Vacant Properties
Vacant homes deteriorate quickly and put pressure on owners.
Best use
Skip-trace absentee owners and offer quick purchase solutions before the property becomes too costly to maintain.
19. Vacant Land
Undeveloped parcels can become new deals.
Best use
Analyze zoning, lot size, and location to identify parcels with development or land- banking potential.
20. Zombie Properties
Vacant + pre-foreclosure = zombie property.
Best use
Pursue these unique opportunities before they’re repossessed and added to bank-owned inventories.
Final Thoughts
Every real estate investor wrestles with the same fundamental challenge of generating a steady stream of deals. Without consistent deal flow, there is no pipeline to nurture, offers to make, or closings to celebrate. Investors who can systematically identify motivated sellers and move decisively will always stay ahead of the competition.
Data platforms like PropStream eliminate outdated guesswork by turning millions of scattered property records into actionable insights. That means more intelligent targeting, faster evaluations, and more profitable decisions—all in less time.
The best use of your energy is not chasing random leads or waiting for referrals. It focuses on the right properties in the right markets, at precisely the right time. Master that discipline, and the deal flow stops being your biggest challenge and becomes your most significant advantage.
U.S. big-box chain retailer Walmart is on an aggressive expansion plan. Real estate investors could do well by following in its wake.
Walmart recently announced plans to construct or convert more than 150 stores nationwide, including locations in key markets in Texas, California, Florida, Alabama, and Utah. In doing so, the retailer underscored its commitment to brick-and-mortar retail and the large-scale employment from local communities.
“An Investment in a Community and New Job Opportunities”
Walmart’s expansion is a major driver of employment, especially in its Supercenters. New Supercenters have opened this year in Frisco and Cypress, Texas, with a new store planned for Melissa, Texas, in November. The company’s expansion will continue into 2026, with new locations slated for Apollo Beach, Florida, and Eastvale, California, USA Today reported.
Walmart has more than 4,600 locations in the U.S. It has opened nine stores in 2025, according to Business Insider, usually targeting metro areas that are growing but not saturated. The retailer’s move into a new location depends on good local infrastructure and an available workforce.
“This isn’t just a ribbon-cutting. It’s a commitment to the future, an investment in a community and new job opportunities,” John Furner, president and CEO of Walmart U.S., said in a statement at the opening for the company’s Supercenter in Cypress, Texas.
Why Walmart Makes Sense for Local Landlords
When a Walmart comes to town, there are definite upsides for local landlords.
1. Improved retail access and convenience
Aside from Walmart employment, having a Supercenter nearby is a positive for the local community, offering the convenience of a full-service retailer.
2. Increase in home values
A 2014 study in the Journal of Urban Economics found that homes within 0.5 miles of a new Walmart appreciated by about 2% to 3% within 2.5 years, compared with those farther out. A study two years prior found that Walmart increased home values by 3%.
3. Employment and commercial spillover
Walmart brings a host of employment opportunities, including store operations, supply chain, and ancillary retail, while also attracting other businesses to the area.
At Walmart’s corporate headquarters in Bentonville, Arkansas, vendors associated with the company in a nearby location known as “Vendorville” have sparked real estate activity, resulting in 2.7% population growth in Bentonville, increased house prices and rents, and a catalyst for other businesses, according to the commerce site Doing Business in Bentonville.
Changing Aesthetics and Perceptions
While some neighborhood groups contend that a big-box store such as Walmart causes excessive traffic and lowers quality of life, the pandemic changed many people’s minds.
“A lot of more affluent shoppers relied on Walmart for e-commerce grocery delivery during the pandemic and have since discovered that Walmart’s not a terrible place to shop,” Bryan Gildenberg, founder and CEO of Confluencer Commerce, told Modern Retail, noting that the company’s focus on design upgrades has helped change perceptions. “As a result, you don’t have the visceral reaction to a Walmart coming that you might if you walked into a Walmart store 30 years ago and found it to be a little bare-bones and underkept for your taste.”
Walmart’s Wage Increases Bring More Money to Local Communities
The commonly held perception of Walmart as the lowest rung on the retail ladder, serving low-income shoppers and employing poorly paid workers, has also changed, as the company has raised its pay structure. In 2024, the company increased the average salary for store managers to $128,000 a year, enabling potential homebuyers and tenants employed by Walmart to spend more on housing.
“In general, retail is no longer the low platform on the totem pole, in terms of pay in a given geography,” Gildenberg said.
Fulfillment Centers: Untapped Potential
Walmart’s expansion of its retail business coincides with growth in its industrial real estate, with multimillion-dollar fulfillment centers completed in Chicago, Miami, Denver, and Seattle, bringing jobs for workers and logistics professionals. In Kings Mountain, North Carolina, located south of Charlotte, Walmart plans to open a 1.2 million-square-foot facility in 2027, creating more than 300 jobs.
“We’re excited to join the Kings Mountain community and proud to create long-term career opportunities where associates can grow and build their future with Walmart,” Karisa Sprague, senior vice president, supply chain, Walmart U.S., said in a statement.
Staying Power
Walmart’s expansion comes as other big-box retailers have struggled amid rising living costs. Walmart’s commitment to “everyday low prices” has benefited it, as customers have sought to downsize expenses amid an inflationary environment.
In a strategic move, Walmart has capitalized on a fragile retail landscape by aggressively expanding its retail footprint by buying shopping centers to control the narrative and minimize competition around its stores. It recently acquired a Norwalk, Connecticut, shopping center for $44.5 million—its third major real estate acquisition since the start of the year.
“Sounds like Walmart is taking an expanded real estate playbook move compared to McDonald’s by buying the center itself, which means another revenue stream as a landlord,” TheStreet retail expert Chris Versace said. “It also allows them to control the tenant mix, which could reduce competitive pressures.”
For potential real estate investors in areas where Walmart has a significant presence—whether as a retailer, shopping center, or industrial owner—it’s a safe bet for prosperity and a long-term tenant base.
“I’ve always spoken about experiential and retail, and I think it’s a smart move,” retail expert and RTMNexus CEO Dominick Miserandino told TheStreet. “By owning the entire shopping center, Walmart isn’t just a tenant anymore. It’s in control of its own world.”
Final Thoughts
Walmart isn’t the only show in town when it comes to how retail affects property values and the general attractiveness of an area for residents, as studies have shown. However, what Walmart does have is volume. The sheer size of its operation means that, whatever format it is in, it will require a large workforce, which in turn will need housing.
An average-sized Walmart employs 200 associates, while a Supercenter employs 300. A Walmart Neighborhood Market employs an average of 95 people, according to Capital One Shopping.
Of course, other institutions are also major employers, such as hospitals and universities, and investors should regard a new Walmart in the context of the other nearby institutions and businesses. Generally speaking, though, as a housing provider, staying on Walmart’s tail, as it expands rapidly, is a good move.
This article is presented by Rent To Retirement.
If you’ve ever bought an older rental property, you know the drill. The listing calls it “charming” or “full of character.” You tour it and feel the nostalgia: wood floors that creak like a symphony, a claw-foot tub, and a fireplace that screams cozy nights.
And then reality sets in.
The creaky floors? They’re covering a warped subfloor. The claw-foot tub? It leaks and is rusted underneath. That “cozy” fireplace? It hasn’t been up to code since JFK was in office. Suddenly, your “investment property” looks more like a money pit with a mortgage.
Old homes come with old problems. When you’re investing for cash flow, equity growth, and scalability, those problems can derail your entire strategy.
That’s why more investors are turning to something they overlooked for years: new construction rentals. These properties are explicitly built with today’s codes, tenants, and investors in mind. Rent To Retirement takes this to another level, allowing investors to benefit from it.
Let’s break down why new construction consistently outperforms older homes, with some real-world stories to back it up.
A Story About Sarah
Sarah bought a 1950s rental in a “great location.” Within the first year, she had to:
- Replace a water heater ($1,400)
- Put on a roof patch ($2,200)
- Switch out half the electrical outlets, because her tenant plugged in a toaster and tripped the entire system ($600)
By the end of the year, Sarah’s “cash flow” turned negative. And add to the problem a frustrated tenant who isn’t happy about the constant repairs and gave notice to vacate.
That’s the reality with older homes: Capex (capital expenditures) hits you fast and often. You can budget for it, but the timing is never convenient.
Older homes often come with:
- Outdated plumbing that bursts at the worst possible time
- Ancient HVAC systems that fail in the middle of July
- Mystery wiring from an uncle who thought he was an electrician
- Lead paint, asbestos, or other costly legacy issues.
Charm may initially attract tenants, but constant maintenance drives them (and you) away.
Why New Construction Rentals Win
Picture a new construction rental in a growing market. You walk into the property, and everything is brand new: the roof, HVAC, water heater, windows, and appliances. You’ve got builder warranties covering major systems for years. Tenants walk in and see quartz countertops, energy-efficient windows, and smart-home features.
Here’s why investors love this:
1. Lower maintenance costs
When everything is new, you’re not incurring thousands of dollars in unexpected repairs each year. Warranties cover big-ticket items, allowing you to plan capex years in advance instead of playing defense every month.
2. Higher rent potential
Tenants will pay a premium for a modern home. New appliances, efficient layouts, and energy savings are key selling points that justify higher rents.
3. Longer tenant retention
Tenants don’t like moving. If they’re happy in a fresh, modern home, they’ll stay longer. Fewer turnovers mean lower vacancy and less money spent on cleaning and re-leasing.
4. Energy efficiency
New construction comes with energy-efficient systems and insulation. Tenants appreciate lower utility bills, making your property more competitive in the market.
5. Appreciation in growth markets
Most new builds are located in growing areas with new infrastructure, including schools, roads, and shopping centers. These markets often experience stronger appreciation, providing you with both cash flow and long-term equity growth.
Jason’s Side-by-Side
Jason, another investor we worked with, purchased two rentals in the same city. One was a 1970s single-family home, and the other was a new-construction build.
- The 1970s home: Gross rent was $1,600/month, but after HVAC replacement, plumbing fixes, and turnovers, Jason netted only $100/month in the first year.
- The new construction build: Gross rent was $1,850/month. Aside from landscaping, there were no repairs. Net cash flow: $650/month.
By year three, the older home had exhausted its “cash flow” with major repairs, while the new build was still running smoothly.
Tenant Perspective: Why New Wins Over Old
Real estate investing is not just about investors; it’s about tenants. Imagine you’re a renter choosing between:
- A 1960s house with quirky charm, but drafty windows and sky-high utility bills
- A modern, energy-efficient home with an open floor plan, new appliances, and a reliable HVAC system
Where are you moving your family? Exactly.
Tenants don’t want “projects.” They want comfort, reliability, and value. That’s why new-construction rentals typically lease faster and attract more qualified renters.
The Investor Edge: Scaling Without Headaches
The real reason new-construction rentals outperform old homes is that they let you scale.
If every property you own is nickel-and-diming you with repairs, you’ll hit a ceiling fast and burn out. But if your rentals are consistent, low-maintenance, and desirable, you can add more doors without adding more stress.
That’s the difference between being a landlord and being an investor: One keeps you stuck in problems, while the other frees you to grow.
Rent To Retirement’s Role
Rent To Retirement has established a strong reputation for demonstrating to investors why new-construction rentals consistently outperform older homes. The primary difference is that these properties don’t require owners to make constant repair calls or engage in a never-ending search for reliable contractors. Instead, investors can focus on growing their portfolios and enjoying the passive income they initially set out to create.
Another significant advantage is financial. New construction often qualifies for some of the most attractive financing programs available, with lenders offering lower interest rates, longer terms, and even special incentives for newly built properties. Insurance is usually cheaper as well, since everything is brand new and built to modern code. Together, these savings provide investors with lower monthly expenses and more consistent cash flow.
And because Rent To Retirement frequently sources new-construction opportunities in high-growth markets, investors also benefit from strong tenant demand and potential for long-term appreciation. It’s this combination of modern housing, better financing, and reliable performance that makes new construction one of the most innovative strategies in today’s rental market.
Final Thoughts: Charm Doesn’t Pay the Bills
There’s a time and place for historic homes. However, when it comes to building a scalable, profitable rental portfolio, new construction wins almost every time. Tenants don’t pay extra for your “quaint” wiring or “vintage” plumbing; they pay for comfort, reliability, and modern living.
So the next time you’re tempted by a fixer-upper with “character,” remember this: Charm doesn’t pay the bills. Cash flow does. And nothing cash flows smoother than a rental where everything works from day one.
Visit Rent To Retirement to explore new-build opportunities in high-growth markets and see how easy it can be to build a portfolio that actually performs.
