The "Reluctant Landlord" and How They're Shifting the Industry

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In This Article

There’s a school of thought among many real estate investors that you should never sell your property. However, for some property owners, renting out their homes has not been by choice. A recent article in Business Insider revealed a scenario that has been happening throughout the Sunbelt in the wake of the return-to-office (RTO) mandates corporate America has been issuing to its remote employees.

Envisioning that out-of-office work was here to stay, many employees purchased homes during and after the pandemic in warm areas with lower costs of living at sub-3% interest rates. However, the call to return to company HQs has caused many workers to pack their shorts and flip-flops and leave behind their adopted balmy new towns and cities. The issue they face is what to do with their homes.

Impossible to Sell

The real estate market now differs from when they purchased their remote working accommodations. Interest rates have doubled, and plenty of new inventory has come to market. The frenzied bidding wars of 2021 are long gone.

According to Altos Research, there were 682,150 single-family homes on the market at the end of 2024, as opposed to 490,809 at the same point in 2022. Simply put, selling a 3% interest-rate property in the current market makes little sense—thus, the rise of the reluctant landlord.

According to National Association of Realtors (NAR) data, 20% of repeat buyers kept their prior residence as an investment, rental, or vacation property. Parcl Labs, a real estate analytics firm working with Business Insider, identified cities with the most single-family rental homes, unsurprisingly in the Sunbelt: Tampa, Florida; Dallas; Charlotte, North Carolina; and Phoenix, among others. Parcl Labs identified that between 3% to 8% of people who listed their homes for sale in September had become landlords by November.

For many of the reluctant landlords featured in the Business Insider article, two main factors made listing their homes difficult:

Once-hot markets such as Austin have cooled considerably, along with house prices. For buyers who purchased at the top of the market, selling would result in a big loss, meaning they would have to bring cash to the table.

Waiting for interest rates to fall has proven far from certain.

When Overwhelmed, Bring in Help

As rookie investors, reluctant landlords might be unprepared for the learning curve of owning a rental property and self-managing. Fielding calls from tenants, repairs, late rents, and more might make many want to cut their losses, list the property, and move on.

However, 3% mortgage rates are likely never coming back. If owning a rental becomes overwhelming, the smart move is to hire a property manager and pay the fees. It might be a break-even proposition in the short term, but in the long term, it will pay off.

When You Cannot Give Up Remote Working

If you simply cannot stomach the idea of giving up your adopted sun-drenched town and new home for the cold and a commute, resiclubanalytics.com has compiled a list of towns with the highest number of remote workers, while Indeed.com has done likewise with the Best Remote Work Companies in 2025.

However, as more companies issue RTO mandates, remote work positions are harder to find. According to the Wall Street Journal, 8% of jobs posted on LinkedIn are remote, down from 18% in early 2022. They are drawing 40% of all applications submitted through LinkedIn. Job site Indeed reports similar stats, which means the need for a second source of income is more important than ever—especially for remote workers who cannot afford to move or have family commitments that make an RTO mandate impossible to uphold.

Even if you have to return in the short term to keep a paycheck coming in, once you are financially stable, the low interest rate you have on your rental gives you a few options.

The Housing Market Impact

As you can imagine, more landlords could mean more competition. With rent prices set to potentially rise this year, more rentals on the market through these reluctant landlords could actually have negative impacts on rent prices. How? More supply, and the wildcard: poor management.

If some of these newcomers don’t exactly know how to screen tenants, price effectively, and manage the right way, they can make it harder for everyone else (as in, landlords). Then, add in the fact that some of these markets could become oversaturated with rentals, especially in the Sunbelt, and you’re looking at a potential problem for rent prices.

We’re not there yet, but it’s certainly something to keep an eye on.

Make Your Low Interest Rate Work For You

Final Thoughts

Landlording is not for everyone. It can be mentally and financially challenging. I’ve yet to meet a landlord who, at some point in their investing journey, has not considered selling everything and not dealing with the stress.

However, if you have a low interest rate, hold on to it like driftwood after a shipwreck. It could be your springboard to financial freedom. If you have an RTO mandate and no other source of income, consider returning to work while plotting your investment journey based on your low interest rate and following the steps outlined earlier.

Even if you are not cash flowing from your rental but merely breaking even, remember that the tax advantages real estate offers mean that you will still come out ahead while paying down your mortgage and gaining equity. With a 3% interest rate, don’t be a reluctant landlord; be a grateful one.

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