{"id":185937,"date":"2025-12-05T10:57:00","date_gmt":"2025-12-05T17:57:00","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=185937"},"modified":"2025-12-05T10:57:03","modified_gmt":"2025-12-05T17:57:03","slug":"are-lower-rent-prices-actually-better-for-landlords","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/are-lower-rent-prices-actually-better-for-landlords","title":{"rendered":"Are Lower Rent Prices the Solution to Your Problems? The Data Says Maybe"},"content":{"rendered":"\n

The saying \u201c<\/span>give the people what they want<\/span><\/a>\u201d resonates for a reason. In real estate, what people want\u2014tenants, specifically\u2014is low rent. <\/span><\/p>\n\n\n\n

That doesn’t always gel with landlords who want higher rents to cover expenses and turn a profit. However, as counterintuitive as it may seem, there are places where rents of $1,000 or less give both landlords and tenants some satisfaction.<\/span><\/p>\n\n\n\n

In the South and Midwest, $1,000 a month is not uncommon, according to <\/span>Zillow research.<\/span><\/a> The data and analytics team at the listing giant found that 13 metro areas among the 100 largest in the U.S. have more than one-third of apartment listings priced below $1,000. That’s in direct contrast to popular East Coast markets such as New York, Boston, Washington, D.C., and Miami, where generally, less than 2% of apartments rent for under $1,000\/month. <\/span><\/p>\n\n\n\n

However, in smaller metros like Wichita, Kansas, and McAllen, Texas, this <\/span>number is over<\/span> 50%. <\/span>In Little Rock, Arkansas<\/span>, <\/span>Toledo, Ohio<\/span>, <\/span>Oklahoma City<\/span>, <\/span>and Tulsa, Oklahoma, it is nearly that.<\/span> <\/span><\/p>\n\n\n\n

In Wichita, the $1,000 rents are made possible by the affordability of some houses. <\/span>This<\/span><\/a> two-bedroom, two-bathroom home, which needs minor repairs (the third bedroom is available for a <\/span>flipper<\/span><\/a>), is currently listed for $92,000\u2014with an estimated PITI payment of $604\/month.  <\/span><\/p>\n\n\n\n

Another two-bedroom, one-bathroom<\/span><\/a> home, in need of light rehab, is available for $80,000, with an estimated PITI payment of $525\/month. Buying this type of home, fixing it up, and renting it out would allow an investor <\/span>to quickly build a portfolio of <\/span>cash-flowing<\/span><\/a> rentals<\/span>. If investors want to spend more money in exchange for higher rents, the potential selection options increase. <\/span><\/p>\n\n\n\n

However, there are many factors beyond low prices and rents to consider when determining the viability of a rental investment, as we’ll see.<\/span><\/p>\n\n\n\n

Bucking the Trend<\/span><\/h2>\n\n\n\n

These smaller metros in the South and Midwest buck the trend for much of the nation, which <\/span>is mired<\/span> in an affordability crisis. <\/span><\/p>\n\n\n\n

“?The thing that I think we learned is that federal housing policy <\/span>is stuck<\/span> in a really weak equilibrium,” Jared Bernstein, who led President Joe Biden’s Council of Economic Advisers, told Ezra Klein of the<\/span> New York Times<\/span><\/a><\/em>. “There is just far too little asked of cities and states. They won’t do much to push back on the barriers that are blocking affordable housing.”<\/span><\/p>\n\n\n\n

While the explosive rent growth of the last decade\u2014<\/span>rising 50% between 2015 and 2025<\/span><\/a> in many markets\u2014is not debatable, neither is the rising cost of being a landlord. Insurance, utilities, and financing have also seen sharp spikes, eating into a landlord’s bottom line. <\/span>According to property management platform<\/span> Baseline<\/span><\/a>, 85% of landlords increased rents in 2024 to offset operational expenses, with one-third <\/span>of these<\/span> raising them by 6% to 10%.<\/span> <\/span><\/p>\n\n\n\n

All this makes the $1,000 rental scenario all the more astounding. It’s like time-traveling to a bygone era.<\/span><\/p>\n\n\n\n

People Are Moving Because of Housing Costs<\/span><\/h2>\n\n\n\n

The cost of housing is the primary reason Americans move, according to <\/span>MoveBuddha<\/span><\/a>. Unsurprisingly, they’re heading to the Midwest or South, making it a good place for real estate investors with limited budgets who want to start building their portfolios.<\/span><\/p>\n\n\n\n

Some of MoveBuddha’s findings are as follows:<\/span><\/p>\n\n\n\n

States<\/span><\/h3>\n\n\n\n