Short-term rentals and rising rents can increase income for landlords, but also cause neighborhood disruptions and lower living standards and tenant satisfaction. Property management software can go some way to helping address these issues.
In this article
- Over half of tenants are worried about rising rents caused by short-term rentals
- Rent control and tenant-friendly payment options can help mitigate concerns about rent inflation, according to tenants
- Home security and smart technology can justify higher rental rates
- Tenant-centric communities can help achieve long-term rental success
The rise of short-term rental platforms has reshaped the rental market, offering benefits like flexibility for property owners, but also raising issues such as reduced long-term rental availability and affordability for tenants.
With over three-quarters of tenants worldwide reporting that rising rents have negatively impacted their quality of life, property managers can stand out by offering competitive rates and technology to enhance tenant satisfaction and loyalty.
To explore these issues, Capterra conducted a global survey in 12 countries, with a total sample of 4,800 tenants, to uncover their experiences and perceptions.* Of this sample, 400 respondents reside in Canada. The results showcase the complexity of factors influencing the current short-term rental market, from rental escalations to neighborhood disruptions and tenant satisfaction concerns. Moreover, they also show the need for property managers to upgrade their properties with new tech and leverage property management tools to elevate the renter's experience when external factors are driving prices higher.
- Short-term rentals are a concern for half of tenants: 51% of global tenants are worried about higher rental prices due to short-term rentals. The figures are the same in Canada.
- Short-term rentals impact neighborhood dynamics for many: 30% of global respondents aware of short-term rentals report increased noise levels. 29% mention parking issues, while 24% express safety concerns.
- Rent control and more payment options can address inflation concerns: 40% of global tenants favor rent control, while 30% prefer discounts for timely payments to combat rent inflation.
- Home security and smart tech can convince tenants to pay more rent: 31% of global tenants are willing to pay higher rent for properties with home security systems.
Over half of tenants are worried about rising rents caused by short-term rentals
As home prices in Canada are expected to keep rising [1], how do tenants perceive the influence of short-term rentals on these increased prices? Over half (51%) of global and Canadian respondents view higher rental prices as one of the top challenges created by short-term rentals.
When it comes to how exactly short-term rentals are affecting prices, 44% of Canadian respondents familiar with the situation say they believe they have significantly driven up local rental prices.
This concern highlights the importance of property managers adopting pricing strategies that balance profitability with tenant affordability. Property managers should conduct market analyses to monitor rental price trends that might justify increases.
Many tenants globally rent rather than buy properties because they cannot afford to buy their own property (55%) or because they are currently saving to buy one (28%). These numbers are more elevated in Canada, where 69% of tenants are renting because they cannot afford to buy their own real estate.
Pricing issues are a challenge for tenants. Globally, 34% of respondents cite high rental costs as a challenge in their current rental property. Additionally, 36% of globally surveyed tenants express dissatisfaction with the amount of rent they are paying. This number is higher in Canada where 39% of tenants are dissatisfied with how much they pay for rent.
Moreover, rent increases have significantly affected tenants globally: 76% strongly or somewhat agree that rising rents in their area have significantly impacted their standard of living.
Given the effects of rising rents from short-term rentals, such as tenant dissatisfaction, it is crucial to build and maintain strong, long-term relationships with tenants. Establishing clear communication and transparent pricing can address concerns, build trust, enhance tenant retention, and reduce turnover.
Property managers should prioritize tenant satisfaction and affordability. After all, happy tenants are more likely to leave positive reviews, which boosts the property’s reputation.
Noise, congestion, and safety issues from short-term rentals have an impact on neighborhood dynamics
Short-term rentals affect neighborhoods beyond financial concerns. While 24% of survey respondents aware of short-term rentals report no significant effects on neighborhood dynamics, 30% report increased noise, 29% note more parking congestion, and 24% express safety concerns. Additionally, 23% say that they have noticed changes in neighborhood character or atmosphere.
Property managers should consider community engagement strategies to address neighborhood concerns and build a sense of community. Satisfied tenants who feel well-integrated within their community are likely to generate fewer complaints and have longer tendencies.
- Enhance security measures: Install and maintain security systems, like surveillance cameras and access control. In combination with emergency preparedness plans for critical situations and neighborhood watch programs, residents can be encouraged to look out for each other’s safety.
- Address congestion issues: Push to implement traffic calming measures like speed bumps and improved signage to manage traffic flow. For parking solutions, developing designated resident spots and visitor parking areas can help reduce congestion and prevent overcrowding.
- Minimise noise disturbances: 31% of tenants experience noise disturbances in their current rental property. Establish clear noise guidelines and enforce quiet hours to reduce disturbances. Invest in soundproofing measures for common areas and individual units to reduce noise transmission.
- Implement waste management: Energy-efficient practices can contribute to environmental sustainability. Regular trash collection schedules and adequate waste disposal and recycling facilities are important.
- Nurture a neighborhood atmosphere: Engage with residents to maintain the neighborhood's unique character through beautification projects or historical preservation initiatives. Organizing community events and maintaining open communication channels to encourage resident involvement in decisions affecting neighborhood aesthetics can ensure collective ownership and satisfaction.
- Build a strong community: Collaborate with local stakeholders, including forming partnerships with businesses, organizing community service projects, and working with neighborhood associations. Landlords should also promote diversity and inclusivity while ensuring accessibility.
Rent control and tenant-friendly payment options can help mitigate concerns about rent inflation, according to tenants
Rent inflation is a significant concern for tenants, regardless of short-term rentals. Over half of global respondents find a rent increase of 1% to 10% reasonable over the next year, though 37% believe rents should not increase at all.
There are several measures tenants feel can curb rent inflation:
Two out of five global tenants and 55% of Canadian residents support rent control measures to limit rent increases. Rent control measures vary across Canada, and each province has different rent control rules including frequency limits, increase limits, and how much advance notice is required ahead of a rent increase. [2]
Similarly, Canadian tenants also expect more from their government when it comes to financial assistance, with 38% of surveyed tenants in Canada stating that government financial assistance or rental subsidies are effective ways to address rent inflation. This however, should not deter property managers from doing their part in addressing these concerns.
Beyond legislative measures, property managers can offer longer-term leases, tenant-friendly payment options, and assist tenants with subsidy programs to address rent inflation.
- Longer-term leases may offer more stability and predictability in rental agreements, they can also attract tenants seeking extended stays and minimize turnover costs.
- Tenant-friendly payment options, such as discounts for timely payments and automated or flexible payment structures can encourage prompt rent payments and improve financial management for both tenants and landlords.
- Property managers can stay updated on available subsidy programs and assist tenants in navigating application processes. This support can address tenant endorsement for government-backed financial aid or rental subsidies while fostering a supportive environment that enhances tenant retention.
- Landlords should maintain open communication with tenants regarding rental policies and justifications for rental adjustments. By providing advance notice of impending rent changes, landlords can improve transparency in property management practices.
- By investing in energy-efficient upgrades such as LED lighting or smart thermostats, property owners can attract tenants willing to pay higher rents for sustainable living options and also reduce operational costs over time.
Home security and smart technology can justify higher rental rates
Understanding tenant preferences for property features is crucial for property managers aiming to attract and retain tenants in a competitive rental market. Investing in desirable amenities can justify higher rental rates and attract tenants willing to pay a higher rent. While three in ten tenants do not consider additional features worth higher rent, many value home security systems and smart technology.
To meet demands for advanced security, property managers should install security systems and prominently feature them during property tours and marketing materials, emphasizing tenant safety as a key selling point.
Likewise, the interest in smart home automation systems and appliances should encourage property managers to integrate smart devices like automated lighting and locks and upgrade their rental units with energy-efficient appliances that can reduce utility costs.
Tenant-centric communities can help achieve long-term rental success
For landlords, considering tenant preferences can enhance relationships with renters, improve reputation, and strengthen long-term business prospects. In a competitive housing market, this approach provides an edge over larger players and helps build a positive reputation.
To address the challenges of short-term rentals and rent inflation, property managers should focus on affordability, community engagement, and technological upgrades. Utilizing property management tools can streamline these efforts, helping to mitigate the adverse impacts of short-term rentals and also cultivate a rental community that meets the diverse needs of modern tenants.
Canadian property managers can address concerns related to rent inflation through smart features that can save money and enhance security. This way, they can improve tenant satisfaction, reduce turnover rates, and maintain a competitive edge in the rental market.
Survey methodology
*Capterra's 2024 Tenant Experience Survey was conducted in June 2024 among 4,800 respondents in Canada. (n=400), the UK (n=400), India (n=400), Brazil (n=400), Mexico (n=400), the US (n=400), France (n=400), Italy (n=400), Germany (n=400), Spain (n=400), Australia (n=400), and Japan (n=400). The goal of the study was to identify the pain points tenants face and explore software solutions property managers can use to address them. Respondents were screened to currently rent their primary residence. For the 400 Canadian respondents, candidates had to be Canadian residents over the age of 18.
Sources
- Report expects Canadian home prices to hit record highs in 2026, CBC News
- Rent control policies across Canada, Canadian Center for Housing Rights
