The rental market is evolving and presenting new opportunities in 2024. According to the Toronto Regional Real Estate Board (TRREB), demand for rentals is strong, with condo apartment rentals up 25.2% in Q2 2024 compared to Q2 2023. This is due to record population growth and affordability issues in the ownership market. If you’re in the property rental space, some emerging trends include long term renters due to systemic barriers to homeownership and single family rentals for families priced out of the housing market.

1. Long-Term Home Rentals: A Steady and Profitable Business

Long term home rentals are still a profitable business in 2025, offering investors a steady income stream and long term wealth building. This traditional rental model involves leasing residential properties to tenants for extended periods, 6 months to a year or more.

• Steady demand: Homeownership is getting tougher for many, so the tenant pool is growing. U.S. rental vacancy rate was 5.8% in Q1 2023, a tight rental market.
• Appreciation: Real estate appreciates over time, builds equity for investors. U.S. median home price increased 27.4% from 2020 to 2022, above inflation.
• Tax benefits: Rental property owners can deduct mortgage interest, property taxes, insurance and depreciation.
• Passive income: Once established, long term rentals can be a relatively hands off income stream, especially when working with property management companies.

Emerging trends in long term rentals for 2025 include investing in suburban areas as remote work continues, pet friendly rentals to tap into the growing pet owner market and smart home technology to attract tech savvy tenants and improve property management.

2. Capitalizing on the Vacation Rental Boom (Airbnb and Beyond)

The vacation rental market has seen explosive growth over the past few years. As of 2028, the market is projected to reach $115.90 billion, with a CAGR of 6.7%.

Opportunities:

• Remote Workers and Digital Nomads: Airbnb and vacation rentals have evolved to cater to long-term stays, with an increasing number of guests booking 28+ days.
• AI and Technology Integration: AI is enhancing both efficiency and guest experience in the vacation rental space.

Challenges:

• Navigating local regulations can be difficult in popular destinations.
• Ongoing property maintenance and market fluctuations are common.

3. Room Rentals: Maximizing Income with Shared Living Spaces

The cost of living in many urban areas has made traditional apartment rentals unaffordable for many especially young professionals and students. Room rentals is a more affordable option, individuals can live in desirable locations at a fraction of the cost of renting an entire apartment.

For property owners room rentals can be a profitable business. Landlords can often generate more income than they would from a single tenant occupying the whole property.

• Growing demand: Shared living spaces trend will continue due to affordability and lifestyle changes.
• Flexibility: Room rentals cater to different demographics, students to young professionals to digital nomads, diverse tenant base.
• Higher yield: Renting by room often generates higher rental income than whole property lease.
• Lower vacancy risk: With multiple tenants the financial impact of one vacancy is reduced.
• Value added services: Opportunities to offer services like cleaning, laundry or meal plans for extra revenue.
• Technology integration: The rise of online platforms for room rentals has made it easier to market and manage these properties.

4. Furniture Rental for Home Staging: Capitalize on the Real Estate Market

Furniture rental for home staging has become a vital service in the real estate industry, helping sellers showcase their properties to potential buyers. Well staged homes stand out in listings, attract more buyers and sell faster and for more money. Furniture rental services are a key part of this process, a cost effective and flexible solution for stagers and sellers.

The furniture rental for home staging business model benefits from the cyclical nature of the real estate market. Properties are bought and sold constantly so there’s always demand for staging services. This business also aligns with the sharing economy trend where renting is often preferred over buying for temporary needs.

More sellers are realizing the importance of home staging, hence growing demand for furniture rental services. Renting furniture is more economical for sellers than buying, especially for temporary staging needs.

5. Storage Space Rentals: The Growing Demand for Self-Storage Solutions

The self storage market has grown from $59.03 billion in 2023 to $63.58 billion in 2024 with a CAGR of 7.7%. This growth is driven by urbanization, rising real estate prices, changing lifestyles and commercial demand. The market is expected to continue to grow and reach $86.05 billion by 2028.

• Steady demand: 10.6% of U.S. households rent a self storage unit, the industry is projected to be $64.71 billion by 2026.
• Recession proof: Self storage has proven to be relatively recession proof as people need storage in good and bad economic times.
• Technology: Adoption of smart storage solutions including IoT sensors and automated inventory management systems is improving customer experience and operational efficiency.
• Value added services: Opportunities to offer additional services like packing supplies, moving assistance or climate controlled units for extra revenue.

6. RV and Camper Van Rentals

RV and camper van rentals have become super popular in recent years offering a unique and flexible travel experience that matches changing consumer behavior. This business involves renting out recreational vehicles or camper vans to travelers for short term use, usually for road trips, camping or outdoor adventures.

• Growing market: The global recreational vehicle market was $55.9 billion in 2022 and is projected to grow at 6.4% CAGR from 2023 to 2030.
• Diverse customer base: RV and camper van rentals appeals to a wide range of travelers from young adventurers to retirees, families to solo travelers.
• Seasonal demand: While peak seasons are profitable, there’s year round business in many areas.
• Flexibility in fleet: Operators can offer different types of vehicles from compact camper vans to luxury RVs to cater to different preferences and budgets.
• Eco friendly options: The trend towards sustainable travel opens up opportunities for electric or hybrid RV rentals.

7. Tiny House Rentals

The global tiny homes market is projected to reach $5.80 billion by 2028 and grow at 5.37% CAGR from 2023 to 2028. Tiny houses have lower initial costs and maintenance expenses compared to traditional rental properties so potentially faster profits.

Tiny houses can be placed in different locations from urban backyards to rural areas so owners can tap into different markets. Tiny house rentals appeals to a wide range of customers from eco-conscious millennials to retirees looking to downsize. Smaller spaces means lower utility and maintenance expenses so higher profit margins.

8. Home Office Space

Rental of home office space has become a profitable business idea especially with the global shift towards remote work. Home office space rentals caters to a wide range of customers from freelancers to small business owners to remote workers looking for a dedicated distraction free space.

• Flexibility for property owners: Existing spaces such as spare rooms or converted garages can be easily converted into rentable home offices so minimal initial investment.
• Multiple income streams: Owners can offer different rental options from hourly to monthly leases to cater to different client needs.
• Lower overhead costs: Compared to traditional office rentals home office spaces have lower maintenance and operational expenses.

The work patterns are evolving and employers are becoming more accepting of remote work so there will be long term demand for flexible workspace solutions.

Final Thoughts

Whether you’re interested in long-term home rentals or niche options like tiny house rentals, the market in 2025 offers ample opportunities to build a profitable business. Consider Loomlease to streamline your property management and focus on growing your rental portfolio.

Start your free trial today and take your rental business to the next level with automated management solutions.