Charlotte Area 2024 Year-End Rental Property Owner Update

As we close another year, I want to provide an overview of the Charlotte area rental market in 2024, share key performance metrics, and highlight what to expect in 2025. Our commitment to keeping you informed remains steadfast as we partner with you to achieve success with your rental investments.

Shifts in the Rental Market in 2024:
Before 2019 Pandemic, Charlotte’s rental market experienced steady growth, with annual rent increases averaging 3%. However, the pandemic brought a dramatic surge in demand alongside limited supply, driving rent increases of 10-12% annually for three years. Rental owners became accustomed to these amazing yet unnatural rent increases.

By 2023 and into 2024, the market began to stabilize due to several key factors. Rising affordability challenges prompted many renters to renew their leases rather than move, reducing overall rental demand. At the same time, a significant increase in new rental communities across the Charlotte area added substantial supply to the market. Additionally, with homes becoming more challenging to sell, many owners opted to rent their properties instead, further contributing to the growing rental inventory. This combination of rent affordability issues, reduced demand, and increased supply has increased vacant days on the market and flattened rent prices, with some areas even seeing slight rent declines as the market continues its natural correction.

Positive Market Developments:
2024 has brought a notable reduction in tenant rent defaults and evictions. Improved tenant screening, stabilized market conditions, and more consistent rental payments have contributed to better outcomes for owners, enhancing the overall portfolio performance.

In addition, we are finding that more and more tenants are renewing their leases for longer terms, significantly reducing vacancy and turnover costs for Owners.

What to Expect in the 2025 Rental Market:
The rental market isn't crashing—it's undergoing a natural correction as it stabilizes. Real estate markets move in cycles, flowing through periods of growth, stabilization, decline, and recovery.

To stay competitive and avoid long vacancies, property owners need to take a conservative approach to rental pricing. Success in this adjusting market depends on setting realistic rent price expectations and making properties attractive to potential tenants so they can rent them quicker and keep them occupied longer to reduce vacancy loss.

The Importance of Competitive Rental Pricing in 2025:
In today's slower, more competitive rental market, pricing your property conservatively is key to minimizing vacancy losses that cut into your year-end profit. Overpricing rental properties lead to longer market times and extended vacancies, which reduce overall profitability.

A competitive rental price does double duty—it attracts tenants quickly and encourages lease renewals. These renewals help you avoid costly vacancy and turnover expenses like make-ready maintenance and tenant placement fees, boosting your bottom line.

We appreciate your trust in our company and are here to address any questions you may have.