The real estate market in Palm Springs is always changing. Sometimes, it’s changing in a way that works to your benefit as a rental property owner and investor. Rental values will rise. Tenant demand will increase. We’ll see new markets open up, such as a strengthening short-term vacation rental market. Sometimes, the market changes are less impressive, however. Eviction moratoriums, for example, were a problem for many property owners during the worst of the pandemic. Being adaptable and flexible is important. This will position you for any market, and allow you to maintain profitability and capitalize on new opportunities whenever possible. Palm Springs has recently emerged as a popular destination for vacationers, retirees, and an increasing number of remote workers. We have a strong population and a large pool of tenants. The demand for rental properties in Palm Springs is ever evolving, and to stay ahead, we offer some actionable strategies to pivot your property investments in a fluctuating market.
Assess the Current State of the Palm Springs Rental Market
Before you revisit your investment goals or take some new actions that you might not have anticipated you’d take, it’s a good idea to understand what's happening in the Palm Springs market currently. What are the prevailing trends? Are more people looking for short-term vacation rentals or long-term leases? What are the demographics of your renters? These are the things that we’re monitoring all the time, as Palm Springs property managers. We have many ways to gather and analyze data, and we’d be happy to share it with you as you decide how to approach the current market and the trends that we anticipate. Make sure you have a reliable source for the information you need. Network with other investors. Attend events. Read the news. Keep an eye on interest rates, sales data, and rental values.
Adjust Your Investment Goals as Needed
It’s important to be consistent with your investment goals and the accomplishments you hope to make with your rental properties. However, in order to keep up with shifting trends and economic factors, you want to remain adaptable. Flexibility in your rental strategy can mean the difference between an empty property and a lucrative investment. If the Palm Springs market sees a surge in short-term stays, for instance, transitioning from long-term leasing to all vacation rental models could be beneficial. On the flip side, if there's a growing population of remote workers or small families seeking stability, pivoting towards long-term rentals might secure steady income. You don’t want to chase every trend. Be mindful of where your strengths are. Instead of dumping all of one property type and investing in a new property type, diversify your portfolio to mitigate risk and position yourself to benefit from both short-term and long-term properties. Buy a multi-family building if you only own single-family homes. Adjustments are ideal; immediate and drastic changes could only leave you needing to change back before too long.
Make Cost-Effective Improvements to Increase Rental Value
Stay responsive to trends and tenant demands by updating your properties. You want to attract the best tenants, retain those tenants, and ensure that you’re earning as much as you can. You want your property to continue increasing in value, no matter what types of market factors are in play.Investing in improvements and upgrades will help you reach your financial and investment goals. Tenants in Palm Springs are looking for:
- Hard surface flooring instead of carpet
- Energy-efficient appliances and light bulbs
- Smart home technology, such as smart thermostats and video doorbells
- Aesthetic elements such as tile backsplashes and shiny faucets
You don’t have to completely renovate your property unless it’s deteriorating and unattractive. But, when you make these small updates, you’re keeping your property competitive in a crowded market.
Utilize Dynamic Pricing Models for Short-Term Rentals
Much like airlines and hotels, rental properties can benefit from dynamic pricing—adjusting rates in real-time based on demand, seasonality, and market conditions. Several tech platforms now enable property investors to automate this process, ensuring your pricing stays competitive and optimizes your revenue.This won’t work for long-term leases; you have a set rental value in place for the entire life of the lease agreement. But, if you’re renting out vacation properties, you’ll stay ahead of all market shifts and trends when you price your property in accordance with the immediate demand.
Implement a Robust Marketing Strategy
Visibility is key in any type of rental market we encounter. Develop a marketing strategy that not only showcases your property's features but also its adaptability to market changes. Highlight location, outdoor space, or the flexible lease terms that you’re willing to consider. Always mention pets when you’re willing to consider pets. Good marketing helps you reduce vacancy. It gets the attention of well-qualified tenants. When you have market conditions that are working against you, double down on what you have to do to get good tenants into place. Then, focus on a retention plan to keep them. A big part of marketing is managing your online reputation. Gathering reviews and a strong online presence can significantly influence renters’ choices. Encourage satisfied guests to leave reviews when you’re renting out short-term properties. With your existing tenants, make sure you’re providing a great rental experience for the entire lease term. Respond promptly and professionally to any negative feedback. This not only demonstrates great customer service but also builds trust with prospective renters.Understanding how and when to shift your priorities as a rental property owner is an important way to be successful in any market and under any circumstances. By remaining vigilant, adaptable, and resourceful, you can pivot your strategy in ways that optimize your investment returns and keep you ahead of the competition. These are some of our most general suggestions that we believe will serve any investor and landlord well. To really benefit from our experience and suggestions, we’ll need to talk about your properties in particular. Contact our team of Palm Springs property managers at Xepco Properties. We can help you have a more profitable rental experience.
