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Rental Trends in San Jose and Santa Clara County in 2024

Rental Trends in San Jose and Santa Clara County in 2024

Being a rental property owner is usually a way to earn regular passive income. To maximize a property’s income potential, owners need to understand the local rental market. Here are some rental trends in San Jose and Santa Clara County in 2024.

Overview of Rental Market Trends

Compared to a year ago, median rental rates in San Jose and Santa Clara County have fallen, down about $300 per month year-over-year—almost 10 percent. Several factors are cooling the rental market. The pandemic continues to affect the area’s economy. Remote work has allowed employees to live farther away from the city center, and there have been post-pandemic layoffs in the technology sector, which is the leading force in the local economy. As a result, the demand for rentals, especially at the higher end of rental rates, has dropped. Santa Clara County’s median rent of $3,000 in March is still about 46% above the national average.

Impact of Market Trends on Property Owners and Investors

Shifts in supply and demand can present challenges for rental property owners and Santa Clara County property management providers. Lower rental rates almost automatically translate to lower returns for investors. When demand for rental properties wanes, competition to attract and retain quality tenants often intensifies among owners and property managers.

For an owner who already has a full-time job and for whom rental properties provide passive income, managing a rental on their own in a cooling market can become a stressful part-time job.

With over four decades of professional property management experience, Valley Management Group can reduce the stress of managing a rental simply because of its proven track record of attracting and retaining quality tenants.

Strategies for Maximizing Rental Income

A surefire way to maximize a property’s income is to maintain occupancy. Vacant units, after all, provide no rental income. However, occupancy rates alone don’t necessarily determine a property’s income potential.

In a competitive market, upgrading a property or adding amenities might increase the likelihood of landing quality tenants and facilitate charging higher rents. A C-level team leader at a tech company might know the ins and outs of that environment, but dabbling in rental properties on the side doesn’t necessarily mean they have the expertise (or time) to navigate the map of property upgrades. A company that provides property management in San Jose has its thumb on the market’s pulse and can provide insight into what types of upgrades and amenities tenants are willing to pay more for. While offering services aimed at maximizing occupancy rates, Valley Management Group advises clients regarding property upgrades that might increase profitability.

Effective Property Management in a Changing Market

When a market’s vacancy rates are relatively high, rental property owners face a greater risk of tenant turnover. The more other places are available, the higher the likelihood a tenant will leave if they’re unsatisfied. One of the biggest sources of tenant dissatisfaction is a lack of responsiveness and overall communication from owners. Unfortunately, many rental owners have other time commitments and can’t always be as responsive or communicative as tenants would like.

Valley Management Group provides Santa Clara County property management services, emphasizing open communication with tenants and attention to their needs. Emergency service is available 24 hours a day, and having local expertise means qualified local contractors and suppliers are available at more favorable costs.

Future Outlook and Investment Opportunities

The post-pandemic rental market in San Jose and Santa Clara County has undoubtedly shifted from luxury apartments in or near the city. Demand is higher for more affordable rentals, which means there are changing opportunities for real estate investors. Investing in properties farther from downtown San Jose often means less competition with other buyers in a seller’s market. That, in turn, can usually translate into lower acquisition costs for investors, while properties in the right areas can still generate solid rental income and offer price appreciation.

Conclusion

Whether in the here and now or with an eye toward the future, real estate investors and rental property owners must stay informed of market trends to make profitable investments. A professional property management company with local expertise can offer owners time and stress savings and serve as a real-time advisor when it comes to market trends. Contact Valley Management Group for a free property management quote and one free month of management services.

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