The Rental Market Is Changing. How Are You Preparing?

Question

For the homeowner investors and self-managing landlords here — how are you preparing for the next phase of the rental market?

Between changing tenant protections, operating costs, insurance, taxes, and the possibility of additional rental regulations down the road, it feels like owning and managing a rental property requires a little more planning than it did a few years ago.

California’s recent legislative sessions have continued to put housing and landlord-tenant issues front and center. Some proposed rent restrictions have stalled, while other housing regulations have moved forward.

I’m curious how other investors are thinking about this.

Are you:

• Staying with the traditional long-term rental model?
• Adjusting rents and expenses more strategically?
• Looking at different markets?
• Exploring co-living or room-by-room rentals?
• Considering professional management so you can spend less time dealing with the day-to-day?
• Or simply holding steady and seeing how things develop?
•

Staying with the traditional long-term rental model?

Adjusting rents and expenses more strategically?

Looking at different markets?

Exploring co-living or room-by-room rentals?

Considering professional management so you can spend less time dealing with the day-to-day?

Or simply holding steady and seeing how things develop?

I think the key is having a few different strategies available rather than assuming the market will look the same five years from now.

Would love to hear what investors are seeing and what you’re doing to prepare. I’m always happy to compare notes and have a conversation about what’s working in different markets. Let's connect!

Igor Ganapolsky · Answer

down here in florida the thing that's changed the most for me is insurance. it's not even close. my policy went up almost 60% in two years and that's before any claims. it completely rewrites your cash flow projections if you underwrote even a couple years ago.

what i've been doing is basically stress-testing every deal against a worst case where insurance goes up another 20-30% on top of whatever you're paying now. if the numbers don't work at that level, the deal doesn't work. simple as that. a lot of people bought in 2021-2022 assuming the insurance they locked in was the insurance they'd keep paying. not how it works down here.

on the management side i've stayed diy because at my scale the 8-10% a PM charges is the difference between cash flowing and just breaking even. when your margins are getting squeezed from every direction — insurance, taxes, repairs going up — you can't afford to pay someone else to do what you can handle yourself. at least not yet.

jamison's point about planning for the downside is really the whole game right now. the upside takes care of itself if you can just survive the bad months without having to sell.

Jamison Theander · Answer

One shift I keep hearing from smaller owners is that the plan has to start with the downside, not just the rent target. Before changing strategies, I would put a number on three things: what a vacant month actually costs, how long the property can carry a nonpaying tenant, and what an insurance or tax increase does to monthly cash flow.

That makes it easier to decide whether to adjust rent, strengthen reserves, or change the operating model. In California especially, any change to screening, deposits, rent, or lease structure needs to be checked against current state and local rules. I would rather keep a simple model that still works through a few difficult months than chase a strategy that only works when everything goes right.

Jonathan Greer · Answer

I agree, we’re definitely in a market where the downside needs to be part of the underwriting from day one. Insurance, taxes, repairs, and management costs can change the numbers quickly.

I’d be interested to connect and hear more about how you’re stress-testing your deals in Florida. Always good to compare notes with other investors navigating the same challenges.

Jonathan Greer · Answer

Hey Jamison,

Completely agree. Looking at the downside and stress-testing the numbers before making a change can give owners a much clearer picture of what actually works.

I’d enjoy connecting and comparing perspectives on how owners can navigate these challenges and evaluate different operating models. Let’s connect and continue the conversation.

The Rental Market Is Changing. How Are You Preparing?

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