It’s very likely that you’re renting a home to remote workers. Even before the pandemic, many workers had the opportunity to work from home at least a few days a week. Now, more and more companies are embracing a remote workforce in order to cut down on overhead and retain a mobile team of employees.

Remote work has taken hold. It’s more than a trend; it’s a reality for a lot of people. Companies have noticed that their employees are happier and more willing to be productive when they don’t have to commute into the office every day. Meetings are taking place online via video calls. New technology is enabling collaboration in creative ways.

Remote work is here to stay, and it’s having an impact on the San Mateo rental market. You may have noticed that tenants are looking for new features and amenities in rental homes. Prices are higher. On applications, you’re verifying employment from way outside of the local area.

What does this mean for you and your investment property? How does the remote work trend impact the entire housing market in San Mateo and property management services in the Peninsula?

It’s actually good news for San Mateo and the surrounding areas.

The increase in remote working has a positive impact on the San Mateo housing market because the ability to work from anywhere is drawing people to the region. There’s plenty of entertainment, natural recreation, and a great scene for art, food, nightlife, and fun. It fits the needs and desires of nearly every tenant demographic, and it’s far enough outside of major cities like San Francisco to ensure there’s a lower cost of living and a higher quality of life.

The local population is growing, and that creates a larger tenant pool.

Thanks to the popularity of remote work, San Mateo workers no longer feel the need to live within commuting distance of their workplace. That opens up a lot of possibilities for renters who are looking for a new home.

Let’s take a look at some of the opportunities and challenges this presents for you, as a real estate investor.

Rental Values in San Mateo

The median rent for a home in San Mateo is now over $3,000 a month, and that means you’re earning more in rent this year than you did last year or the year before.

This increase in rental values is due mostly to a high demand, a low inventory, and of course inflation. Fewer people are finding themselves able to buy a home, thanks to higher interest rates and more expensive mortgages. This is keeping the rental market active and competitive for even well-qualified tenants.

Remote work has impacted prices as well.

According to a study produced by the National Bureau of Economic Research, the growth in remote work caused an increase in home purchases that wouldn’t have happened otherwise, and this created higher prices for both home sales and home rentals.

A lot of workers restructured their living situations during and immediately after the pandemic. Those shifts have contributed to higher demand and pricier properties.

Challenge for Investors: Keeping Rental Prices Competitive

The rental market is experiencing higher prices and more demand, just like the sales market. This means a larger pool of tenants and higher rental values for your investment property.

That’s an opportunity.

With housing prices rising so dramatically, a lot of potential buyers in San Mateo may find themselves needing to rent for a while longer. That’s driving the demand for high-quality rental housing. With remote work, people are more transient as well. Renters can live in multiple cities. Someone who works for a company in Seattle, for example, can come and live in San Mateo for a year without giving up their job. That flexibility and a more nomadic sensibility among workers is keeping rental markets in cities like San Mateo strong.

There are also challenges.

Pricing, for example, has to be competitive enough that you attract good tenants and keep up with market rents.

Competitively priced rental homes are always in high demand. As a rental property owner, you’re benefitting from these higher rents. But you don’t want to overprice your home or create a lot of turnover by raising your rent too much when it’s lease renewal time.

Make sure you’re setting a rental value that allows for a healthy profit. Always list your rental home at a price that meets the market demands. But, don’t go too high. Staying competitive will allow you to fill your vacancy quickly. Get a well-qualified tenant into your home as soon as you can, and then work hard to retain them.

Opportunities to Attract Remote Workers as Tenants to Your San Mateo Property

Our experience with peninsula property management has allowed us to observe the recent market shifts and gain an understanding of what remote workers are looking for when they rent a home. If you want to take advantage of this opportunity, you’ll make sure your property is attractive to this growing pool of tenants who will be working from home.

When you have a fantastic property to offer, you won’t have any trouble attracting these remote workers to your rental home.

Here are some of the things we recommend, based on what these types of tenants is looking for in a rental home.

Dedicated work spaces attract remote workers

The renters you’re advertising to will want to know they can comfortably work and live in the property that they choose. Show off your extra bedroom or den which could be used as an office.

Provide good technology to remote worker tenants

Remote working tenants will need high-speed internet. While you likely don’t provide internet, you can have some good options for internet providers that will help them set up service.

Flexibility with design and structure

You may find your remote working tenants want to make some changes. Perhaps they’d like to paint the walls a different color in their workspace. Maybe they’d like to move in with their pets. They might want a shorter or longer lease term, depending on their travel plans. Be open to their requirements.

These are our thoughts on the current market and the new reality of remote work. Please contact us at Bayside Management with any questions. We lease, manage, and maintain investment properties in San Mateo and around the Peninsula, including San Carlos, Redwood City, Pacifica, San Bruno, Half Moon Bay, Daly City, Mountain View, Foster City, and Palo Alto.