If you thought remote work was simply going to be a trend during the pandemic, you have learned by now that it’s more than a trend. It’s the new normal for a lot of workers, and it should not come as too much of a surprise. Even before people started working from home en masse, there was an effort in some industries and companies to provide more flexibility to employees.
Remote work has changed how we work, spend our time, and even how we invest in real estate, especially rental properties. We are working with a pool of residents who no longer have to live close to the company they work for. If they’re fully remote, they don’t even have to be in the same state.
This has caused a huge shift in the market, and it’s also changed the demands that tenants are making in the marketplace. With remote work becoming more normalized, both the Santa Rosa real estate industry and the Santa Rosa property management industry have had to adapt to this reality.
Let’s talk about the impact that remote work has on the real estate industry and on your own investment goals. We’re also taking a look at how remote work has created some unique opportunities and challenges for Santa Rosa property managers who are leading owners and tenants through a shifting market.
Demand for High Quality Rental Homes in Santa Rosa
The rental market has been hot for a while, and that is in part due to the flexibility and freedom that a lot of residents have to live anywhere they want. Someone who works for a company in San Francisco no longer has to work in the city. They can live in a place like Santa Rosa, where homes are far more affordable and the quality of life might be more of what they’re looking for. There’s no need to worry about commuting more than an hour into work.
If you’re looking to buy a new rental property, consider the demand when making investment decisions. Prospective tenants are looking for homes that meet their work and living needs.
Cities like Santa Rosa are benefitting from the remote work trend.
As remote workers shift towards wanting homes in more affordable areas outside of major cities, prices rise a bit higher in areas like ours. There has been a surge in demand for homes in suburban and rural areas, with many California residents leaving expensive urban areas for more affordable homes outside of the city, where they also get more space to work.
Santa Rosa Home Prices are Higher
The increased demand for homes in suburban areas of California such as Santa Rosa, thanks to the remote work trend sticking around, has led to an increase in both home prices and home values. With more buyers and investors competing for a shrinking supply of homes, sellers have been able to earn more on their properties.
Competition in markets like Santa Rosa has also been intense.
With more buyers and investors looking for homes in these areas, the competition for available properties has become fierce. Rising interest rates have allowed the market to slow down a little bit, but there is still a lot of competition for the homes that are available in and around Santa Rosa.
Increased competition among buyers and investors in Santa Rosa’s real estate market and similar markets is a direct result of the shift towards remote work. People are choosing where to live, and they’re moving out of larger, crowded, and more expensive cities.
Santa Rosa’s Rental Market and Remote Work
Remote workers aren’t only buying homes. They’re also renting homes.
In fact, they’re more likely to rent because their lifestyle offers a lot more freedom now that they don’t have to report to the office every day.
Remote workers who rent tend to like cities, but not crowded cities like New York, San Francisco, or Miami. Instead, they’re choosing cities that are more affordable and accessible. Remote work has allowed for greater mobility. Geographic preferences are shifting.
Data from Apartment List shows that renters who are remote workers are more likely to have moved into a new home over the last year than those who are not remote workers.
The tenants looking for homes are likely working from home.
What does that mean for what you buy and how you market your property?
That’s where the expertise of a Santa Rosa property management company can really help. We understand the unique challenges and opportunities that a remote tenant pool presents.
Renting a Santa Rosa Home to Remote Working Tenants
There is a large pool of tenants looking for a well-maintained property in Santa Rosa. If you have one, you’re in a strong position. You’ll likely find a reliable pool of tenants waiting to rent it. You can count on higher rental prices than you may have charged a couple of years ago.
As Santa Rosa property management experts, we’ve been thinking about how to best position your property to attract the remote workers who are moving into the area. Here are some of the things we recommend, based on what we know they are seeking in a rental home.
- Good Technology in Santa Rosa Rental Homes Will Attract Remote Workers
Two things will be especially attractive to remote workers: strong internet service and a dedicated working space.
When it comes to the internet, you likely won’t be providing it yourself, unless you’re renting out a short-term property. If you’re renting out a long term home, it will be up to your tenants to choose and set up their internet services. You’ll want to provide them with some good options. Let them know who the internet providers are in the area so they know who to contact and how to compare prices and plans. Tenants need a strong internet to keep up with their Zoom meetings and stream their favorite movies and music.
There’s additional technology you can offer. Smart home tech is becoming more and more popular, and remote workers looking for a new home will appreciate technology upgrades such as video doorbells, digital keys, and the ability to sync thermostats, appliances, and security devices to their phones via an app.
You’ll also need to think about how your property can offer dedicated work space. Remember – remote workers are looking for spaces that support how they live, work, and learn. For the dedicated work space, you can offer a den, an office, or even a built-in desk in the middle of a large and open floor plan. If you have a three bedroom house, consider marketing one of those bedrooms as a potential office or study. Call your home a live/work space in your marketing so you’re specifically targeting those tenants who work from home and need a property that matches the kind of work and life balance they imagine.
- Keep Your Santa Rosa Rental Value Competitive
Rents have gone up. You should set a rental value that allows for a healthy profit, and you should definitely list your rental home at a price that meets the market demands. But, don’t go too high. Staying competitive will allow you to fill your vacancy quickly. Get a well-qualified tenant into your home as soon as you can, and then work hard to retain them.
- Pet-Friendly Properties are Essential
Ask any remote worker why they prefer to work from home instead of a traditional office, and they’ll give you a list of reasons. One of those reasons is likely that they value time with their pets.
Digital.com recently did a survey and found that 75 percent of remote workers said they choose to work remotely because they want to be home with their pets.
Obviously, you need a pet-friendly rental property if you want to attract these tenants.
- Consider Short Term Leases for Santa Rosa Rental Homes
The remote working culture is now normal and accepted. Any company that was going to call its employees back in the office likely has already done so. When looking for a new job, many people are ruling out any job that would require them to be present in an office.
This, of course, has allowed people to relocate permanently.
Some of these remote workers, however, are choosing a more nomadic existence. They might not be interested in signing a one-year lease. They might prefer to move around a lot, at least until they find a place where they want to settle. You may have a tenant who is in Santa Rosa for four months and then Denver or Phoenix for the following months. Maybe they’ll spend half the year in the mountains and the other half the year at the beach.
Think about how flexible you’re willing to be with your lease terms. Consider offering a furnished rental. This will not work for everyone, especially if you are focused on long-term, unfurnished rentals. But, it’s something to consider if you want to attract a larger pool of potential tenants and you’re willing to take on the extra work, maintenance, cleaning, and marketing that’s required in a shorter rental term.
This is what we can tell you right now about how remote work has impacted the real estate market and the property management market in Santa Rosa. We’d love to share more information with you. Please contact us at Redwood Residential Property Management.
Marla Shaw