Friday, June 27, 2025
More People Will Become Landlords in 2025 - Here's Why
Discover why 2025 is set to create the largest wave of new landlords yet, as homeowners turn their properties into rentals and explore house hacking, long-term, mid-term, and short-term rental strategies to build wealth.
Why More People Will Become Landlords in 2025
(And What It Means for You)
2025 is already turning into a breakout year for new landlords. Here’s why it's happening, what strategies they’re using, and how to know if renting your home is the right move.
Leslie Duvernay
Why More People Will Become Landlords in 2025
The Market Shift That Created a New Class of Landlords
Back in 2021, many people rushed to buy homes during a red-hot market with historically low interest rates. Fast forward to 2025, and those same homeowners are sitting on properties they may not love but with mortgage rates they don’t want to give up.
What we’re seeing now is a new wave of homeowners choosing to rent out those properties instead of selling. Whether they’re moving, upgrading, or just ready for something different, they’re holding onto their homes and turning them into rentals.
- Many 2021 buyers feel stuck with homes they no longer want but can’t afford to sell
- Low mortgage rates are motivating owners to keep their homes and rent them out
- Renting becomes the exit strategy when selling doesn’t pencil out
Why Homeowners Are Renting Instead of Selling
For many, the numbers just don’t make sense to sell.
- They bought at peak prices
- They’d break even or take a loss if they sold now
- They’re locked into ultra-low interest rates
Instead of walking away from a great loan, homeowners are choosing to move on and keep their homes as rentals even if the property just breaks even in cash flow.
Most New Landlords Start With These 4 Rental Strategies
If you're thinking about renting your property in 2025, it helps to understand your options. Here are the four most common rental strategies:
- Long-Term Rental: This is the traditional 12-month lease model. Unfurnished and lower effort, it’s the easiest starting point for most new landlords.
- Midterm Rental: Think furnished stays between 1 to 6 months. Great for travel nurses, insurance placements, or corporate housing. More management than long-term, but less than short-term.
- Short-Term Rental: Often called "Airbnb," this strategy involves fully furnished units with stays under 30 days. Higher income potential, but much more hands-on and hospitality-driven.
- Rent by the Room: A flexible model where you rent out individual rooms. Can be used with long, mid, or short-term leases. More turnover and coordination, but often higher cash flow.
How to Choose the Right Rental Strategy
It comes down to three factors:
- Your time: How hands-on do you want to be?
- Your finances: Can you furnish? Handle gaps between tenants?
- Your goals: Are you holding the property short-term or long-term?
Understanding that landlording is a business with a profit and loss statement will help you think more strategically from day one.
And yes, even if you just plan to break even, renting could help you preserve your asset while waiting for the market to rebound.
Don’t Forget the Tax Benefits and Capital Gains Rules
Many new landlords forget that once you rent your property, you’re now in business. That means:
- You’ll need to track income and expenses for your taxes
- You may benefit from depreciation and deductions
- Capital gains exclusions can still apply if you sell within the IRS two-out-of-five-year rule
Talk to a real estate-focused CPA before renting out your home. Your strategy may help you reduce taxable income or set you up to sell with minimal taxes later.
The Bottom Line: Renting in 2025 Could Be a Smart Play
If you’re in this position, you’re not alone.
Even if your goal isn’t to become a full-time landlord, 2025 might be the year to test the waters. More homeowners are turning their houses into rentals than ever before not because they planned to, but because it makes financial sense.
- Renting can preserve your low mortgage rate while opening new options
- Even break-even rentals can offer long-term tax and equity benefits
- You’re not the only one making this move—many homeowners are doing the same
And as always, happy landlording!
Watch the Full Video Breakdown
Want to hear exactly what’s happening in today’s market? In my latest YouTube video, I break down:
- Real examples of homeowners renting instead of selling
- The biggest strategy mistakes new landlords make
- How to shift your mindset into "landlord mode"
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