Fall 2023 Real Estate Update: What Rental Investors Should Know
Fall 2023 Real Estate Update: What Rental Investors Should Know
Fall 2023 looks different from the past few years. Rates have risen significantly, transaction volume has slowed, and the “bidding war on everything” environment has given way to a more measured market. For patient rental property investors, this shift creates real opportunities — but it requires adjusting expectations and strategy.
The Rate Reality
Investment property mortgage rates are sitting in the 7.5–8.5% range in most markets. This is meaningfully higher than the historic lows of 2020–2021, and it requires more careful underwriting. Properties that penciled at 4% rates may not work at 8% without a price adjustment. The deals that work now need to be genuinely good on current fundamentals — not dependent on rate drops that may or may not materialize.
Seller Adjustments Are Creating Opportunity
Sellers who listed at peak prices are facing a reality check. Days on market have extended in most markets, and price reductions have become common. Motivated sellers — relocating, divorcing, estate sales, investors who bought at peak and need liquidity — are willing to negotiate in ways that weren’t possible 18 months ago. Patient buyers with cash or solid financing can find well-priced deals.
Rental Demand Remains Exceptionally Strong
High mortgage rates have pushed a significant portion of would-be buyers into the rental market. Vacancy rates remain low in most Midwest and Southeast markets, and rent growth — while slower than 2021–2022 — remains positive. Owning quality rental properties in these conditions is a strong position to be in.
The Strategy for Right Now
Be selective. Run conservative numbers using current rates and realistic rents. Target markets where the price-to-rent ratio still supports cash flow. Don’t chase appreciation in markets where the fundamentals don’t support current prices. And if you already own quality properties, hold them — the income thesis remains intact even if transaction activity has slowed.
Book a call with Equity on Repeat — we’re actively evaluating deals in multiple markets and can share what we’re seeing on the ground.