More than half of the residential homes in Richmond are occupied by renters. That means there’s a lot of opportunity for current investors who have homes for rent and for anyone who is thinking about investing in a rental property.
We’re taking a look at some of the rental market trends in Richmond right now, and what you can do to better position yourself and your property to benefit from those trends.
Part of what we do as property management experts is stay up to date on all the recent changes, market shifts, and tenant demands that are constantly evolving. We provide insights for property owners that help you earn more on your investment now and in the future.
Here are the most interesting rental trends we’re following right now.
Richmond Rental Demographics
As we mentioned earlier, there are more renters than homeowners in Richmond. In fact, 57 percent of the housing market is made up of tenant-occupied properties. There’s a high demand for rental properties, and that has pushed up prices over the last three years. While rental values have finally peaked a bit, they’re higher than they’ve ever been. That’s because of Richmond’s large and growing population of tenants.
There are some demographic trends that are shifting the way the rental market has been performing. Most notably, there are remote workers making up a large part of the tenant pool, retirees who want to enjoy a low-maintenance rental property in a more affordable market like Richmond, and an entire population of people who might want to buy a home, but are waiting for interest rates to fall and mortgages to become less expensive.
The Rise of Remote Work and Its Impacts
The recent surge in remote work has shifted where tenants are living and what they are looking for in rental properties. Many of your tenants looking for homes are now seeking more flexible space or an additional room for a home office. They may want neighborhoods with proximity to green spaces and co-working communities or amenities that can enhance their work-from-home experience.
Richmond is an ideal place for remote workers to live, especially if their actual jobs are based in Washington, D.C. or Baltimore or even New York. They’re close enough to reach those larger cities, but there’s no longer a need to live there when they’re working from home. This has created a population of new tenants in our market.
Retirees Looking for Rental Homes in Richmond
Not everyone is retiring to Florida or Arizona. Plenty of active adults are looking to stay along the eastern seaboard, and a city like Richmond allow them to do so without spending all of their retirement savings on housing. Country Living Magazine recently ranked Richmond as the 17th best place to retire in the U.S.
Student Housing Demand in Richmond
Home to several institutions of higher education, Richmond sees consistent demand for student housing. Property owners might be interested in buying and renting out homes that can be marketed to students. This is likely to offer a shift in lease terms in order to follow the academic calendar, but students will always need housing, and this part of the market presents an excellent opportunity for investors.
Richmond Rental Homes and Tenant Trends
In order to effectively rent out your property, you need to know what tenants are looking for. This impacts how much you’re charging in rent and how easily you’re attracting well-qualified tenants.
There are two specific trends that we’re seeing not only in the Richmond rental market but all across the country. Tenants want smart home technology and they want energy-efficient appliances and systems. If you want your property to appeal to modern tenants, that property has to be open to technology and lean towards sustainable appliances and practices.
Let’s take a closer look.
Technology and Richmond Rental Homes
Technology has become a priority for tenants, not only because of the work-from-home trends but also because smart home tech offers more security and convenience.
Maybe you rely on your own digital assistant when you want to turn the lights on as you approach your home or add something to your grocery list. Surely, you’re using GPS in your car when you need directions. This is the same kind of tech that tenants want in their homes. They’re using Siri, Alexa, and Google, and they want to use voice commands or access an app on their phone.
When you can integrate your smart home technology with that demand, you’re raising your rental values and keeping your property occupied with good tenants.
Richmond tenants want the ease and convenience of integrated home systems, appliances, and security features. This is a trend that’s rapidly growing in the Richmond rental market, and we expect that investors and rental property owners will adopt more smart home technology over the next few years in order to appeal to residents.
This will require an investment; smart home tech isn’t cheap. If you’re wondering where to start, these are some cost-effective options that are especially popular with tenants right now:
Video doorbells
Security systems
Smart thermostats
Digital keys
Tenants will appreciate the ability to set timers for their lights, appliances, and thermostats. They want to start vacuum cleaners and coffee makers with a simple voice command. Attracting high-quality residents in the future will require at least a minimal investment in smart home technology.
These technologies offer a variety of advantages to rental property owners, too. You’ll save money on energy during vacancy and turnover periods. You’ll retain tenants more easily and you’ll bump up your rental values and the value of your property. As residents and rental property owners get more comfortable with the existing technologies that are already implemented and effective, the future is likely to include additional innovations that will easily increase tenant satisfaction and ease some of the frustrations in rental property ownership.
Sustainability Trends in Richmond Rentals
Another trend we’re seeing in the market is the demand for environmentally-friendly housing and greener property functions. This isn’t just because of the wider focus on climate change and environmental responsibility. It’s also a matter of economics. With everything getting more expensive over the last year or two, tenants want to reduce what they’re spending on electricity, water, and other resources.
Whether it’s installing electric vehicle charging stations in your multi-family building, considering solar panels as a new upgrade, or even just switching out your light bulbs, making your rental property in Richmond a little bit greener will be an investment that meets the needs of current rental market trends and provides a boost in your property value.
Some of the most popular sustainable upgrades in the market currently include:
LED light bulbs.
Low-flow fixtures like toilets, shower heads, and irrigation systems.
Double-pane, energy efficient windows.
Appliances with an Energy Star rating.
Sustainable flooring materials such as cork, bamboo, and concrete.
Eco-friendly initiatives are going to help your property stand out, and it will deliver higher rents for you.
Market Dynamics: Rental Rates and Occupancy
Staying one step ahead of the current rental rates in Richmond is an important part of your success as a rental property owner. Make sure your pricing strategy is based on the data and insights that are gathered from the market. As you begin to think about rental renewal rates, you also want to consider where the market is currently, and how you can earn more without chasing tenants out of your property.
Here’s how you can leverage the current market dynamics to earn more on your Richmond investment:
Balancing High Occupancy with Competitive Pricing
A high occupancy rate is a key indicator of a successful rental property, but it's important to balance this with competitive pricing. Well-priced units that offer value to tenants often lead to longer tenancy periods and reduced turnover costs.
Location is Everything
Location is always one of the most important factors when it comes to investing in Richmond. Certain areas in Richmond are emerging as especially desirable, and if you’re planning to invest in a rental home, you want to know where these neighborhoods are and what kinds of rent you can expect to earn.
Maximizing Returns through Value-Add Amenities
In a competitive market like Richmond, offering value-added amenities can differentiate your property from the rest. Whether it's those smart home features we talked about, a pet-friendly policy, or simply top-notch maintenance and responsive management, creating a five-star rental experience can lead to higher tenant satisfaction and retention.
If you’re renting out a home now or thinking about investing in a Richmond rental property, you need to stay on top of what’s happening in the market. By keeping an eye on demographic shifts, rental rate fluctuations, and competing properties, you can anticipate the needs of potential tenants and make strategic decisions that will enhance your property's appeal and profitability.
If you’re not already partnered with a professional property manager in Richmond, now is the time to think about it. We know the renter demographics and demands in the area. We monitor rental rates and occupancy, gathering data and insights that are accurate and reliable. We know where to invest and what types of properties are most attractive to tenants.
Let’s talk. Contact us at PMI Presidential, and we’ll discuss what the rental trends in Richmond mean for you.
