What is it like to rent out a home in Oakland? Located in the San Francisco Bay area, Oakland is a bit of a unique area for both investors and tenants. There have been some remarkable transformations in the local real estate and rental markets over the last few years.
It’s close to San Francisco, but it’s not San Francisco. Oakland offers a joining of diverse communities, prides itself on a flourishing art scene, and has quietly been inviting more local business into its various commercial districts.
Oakland has its own charm, its own opportunities, and of course – its own challenges.
As experienced Oakland property managers, we’ve seen the city and the market withstand some really intense highs and some really intense lows as the real estate market in California ebbs and flows. We’ve watched the steady growth and faced some predictable and unexpected challenges.
To help investors who may own property here or who are thinking about buying property here, we’re taking an expert look at some of the real estate trends working through Oakland right now. We’re also sharing some of our insights to help you make better decisions about your investment goals and plans.
Demand for Oakland Rental Housing
Demand for well-maintained homes in good Oakland neighborhoods is high. The steady growth is thanks in part to the city’s strong job market, diverse population, and cultural attractions. This demand has pushed rental values higher, which is good news for landlords and rental property owners. Statistics show that the average apartment rental hovers around $2,800 per month while a single-family home, on average, will rent for $3,800 a month.
Those are comfortable rents, and if you’re willing to make improvements to your property and keep it looking modern and attractive, you’ll find that you can continue pushing your rental values higher. Focus on tenant retention and eliminating vacancy and turnover, and you’ll earn some great recurring rental income while your property continues to grow in value.
One of the trends keeping more people in the rental market is the rising interest rates. This leads to more expensive mortgages, and in a market like Oakland, where home prices are already trending higher, many potential first-time buyers are continuing to rent instead.
Oakland Tenants Appreciate Infrastructure
Some of the things that impact the Oakland rental market in particular include infrastructure, parking, and public transportation. This won’t be true for every market, but in Oakland, an investment in city services is necessary to keep tenants living here. Fortunately, Oakland’s city government has demonstrated a willingness to prioritize urban development and infrastructure improvements. This leads to further investment and interest in the real estate market. It keeps new businesses setting up shop here.
Proximity to public transportation, particularly the BART system, is also contributing to the desirability and value that can currently be found in the Oakland rental market. New developments are focused on maximizing accessibility to transit hubs.
Local Oakland Economic Strength
Oakland has a growing economy, and that contributes to the strength of the rental market.
Historically, Oakland’s major industries have been:
- Business and health care services
- Transportation
- Food processing
- Light manufacturing
- Government services
- Arts, culture, and entertainment
The Port of Oakland is also a huge driver of the local economy; it’s one of the busiest ports in the world for container ships.
Lately, however, Oakland has exploded as a destination for tech companies. Oakland has largely become a destination for all the tech companies and start-ups seeking more affordable home bases and a diverse talent pool in comparison to neighboring Silicon Valley.
This new influx of tech companies has driven up property values and increased the demand for great housing.
Shifting Rental Market Trends
Several new construction projects around the city have been underway, in part to meet the demand for housing and also to deliver affordable housing to people who are struggling amidst the rising rental prices. This means an increase in condominium buildings and multi-family apartment buildings throughout the city.
Even while development is increasing, there’s a preference among tenants for more sustainable, greener housing options. They’re looking for energy-efficient appliances and light bulbs in the homes they rent. Owners will need to be prepared to meet this demand.
Short term housing is also taking off. Sites like Airbnb and VRBO are popular places for tenants to look when they’re only coming into town for a few weeks or months. While long term leases are often more profitable and stable for owners, short term furnished rental properties offer another option for owners and investors who may be looking to diversify their portfolios.
Remote Work has Changed the Oakland Rental Market
Working from home has never been more popular and accepted. If you thought this trend was going to be unique to the COVID-19 pandemic, you must know by now that this is not the case. Many workers remain remote, and this has changed the way owners are offering rental properties. They understand that these remote working tenants are looking for:
- Strong internet connections.
- Work space inside the properties where they live.
- Outdoor space.
- A place to keep their pets (pet ownership skyrocketed during the pandemic).
If you’re thinking about how you want to market your property to remote working tenants, these are the things you’ll want to focus on while competing with other rental homes in Oakland’s housing market.
Oakland Property Management
If you’re not already working with an Oakland property manager, now is the time to partner with a professional. As the market continues to shift and the laws continue to get stricter for owners, it’s important to protect yourself and your investment.
Property managers understand the changing rental values. We understand the shifting tenant demographics and how to effectively reach the right residents, screen them thoroughly, and remain responsive to their needs while they’re living in your home.
We would be happy to talk to you about our services and our unique understanding of the Oakland rental market. If you’d like to hear more, please contact us at Marquardt Property Management. We provide expert property management in Oakland, the East Bay and in surrounding communities like Hayward, Pittsburg, and Concord.
