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Is Your Rental Property Performing? Understanding Rental Owners' Financial Health in Spokane
As a property manager in Spokane, WA, I often see a wide range of financial situations among rental property owners. Let's dive into some key trends in rental owners' financial health, based on recent research by Buildium.com.
Key Trends in Rental Owners' Financial Health:
Profitability: While many believe rental properties are automatically profitable, the reality is more nuanced. Only 35% of rental owners report that their properties are consistently profitable, and this figure hasn't changed since 2023. Interestingly, investors are more likely than accidental landlords to report consistent profits.
Primary Reason for Ownership: A significant 79% of rental owners own their property primarily for the income it provides. Of this group, 55% view their rental property as a source of passive income, while 24% see it as an active income stream, indicating varying levels of involvement with their properties.
Reliance on Rental Income: Over half of rental owners are somewhat reliant on their rental income to make ends meet. Specifically, 58% of owners rely on their rental income to some extent, with a growing portion of small-portfolio rental owners reporting that it's supplemental rather than a primary need. This can create financial pressure for many owners.
Financial Health of Rental Owners' Properties:
Here’s a breakdown of how rental owners assess the financial health of their properties:
- Excellent (35%): Consistently able to generate a profit.
- Good (38%): Properties' mortgage/expenses are covered, but not consistently profitable.
- Inconsistent (19%): Sometimes able to pay mortgage/expenses, other times spend more than they make.
- Poor (6%): Consistently spend more than they make, but haven't fallen behind on mortgage/expenses.
- Very Poor (2%): Not consistently able to pay properties' mortgage/expenses in full.
Rental Owners' Reliance on Rental Income:
Here’s a breakdown of how reliant rental owners are on the income from their properties:
- Very reliant (14%): Rental income is critical to paying household bills & properties' mortgage/expenses.
- Somewhat reliant (21%): Rental income pays for properties' mortgage/expenses, but household bills are covered.
- Slightly reliant (23%): Rental income pays for retirement, but household bills & mortgage/expenses are covered.
- Not reliant (42%): Rental income tends to be supplemental, able to cover bills without it.
If you're a rental owner in Spokane, WA, and you're looking to improve the financial performance of your property, I encourage you to reach out. Let's discuss your goals and see how we can work together to achieve financial success.
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