Promising Rent Growth Trends in 2025 Based on Local Research

After analyzing data from 32 of my own properties, I’ve conducted an independent study to assess the financial trajectory for landlords in Tampa and the broader Florida market. The past two years have been a wild ride, with some challenges like tax hikes and declining rents in 2024. However, there’s good news on the horizon. Deceleration in taxes and the projected acceleration of rents in 2025 paint a brighter picture for landlords. Let’s dive into the trends, backed by real numbers and years of experience in real estate.

The Tax Deceleration: A Relief for Landlords

Let’s start with taxes. In the past five years, we’ve witnessed significant increases in property taxes, leaving many landlords struggling to keep their properties profitable. Using my portfolio as a case study, here’s the trend I’ve observed:

• 2019: $1,495.78 average annual tax per property

• 2020: $1,711.47 (+14.4%)

• 2021: $1,913.10 (+11.8%)

• 2022: $1,816.73 (-5.0%)

• 2023: $1,955.35 (+7.6%)

• 2024: $2,067.86 (+5.7%)

What stands out here is the clear deceleration in tax increases. From double-digit growth in earlier years, the increases have slowed to single digits. This trend is crucial for landlords because it gives us room to adjust rents more strategically without being overwhelmed by sudden spikes in expenses.

For 2025, I expect tax increases to hover around 3-4%, based on historical data and local government projections. While taxes will likely continue rising, the slower pace is a welcome change, giving landlords a much-needed breather.

Insurance: A Mixed Bag

I won’t dive deep into insurance here—that’s for another article—but I can say this: Florida’s insurance market has been turbulent. However, like taxes, we’re seeing signs of deceleration. Premiums that were increasing at 10-20% annually are now stabilizing in the mid-single digits. This trend, combined with legislative changes to reduce fraud and litigation, is a positive sign for landlords.

Stay tuned for my next article, where I’ll break down the numbers and strategies for navigating Florida’s insurance landscape.

2024: A Year of Declining Rents

Now, let’s talk about the elephant in the room: rents. 2024 was a tough year for landlords. In Tampa, rents declined by 11.3%, primarily due to an oversupply of new apartment units. Builders, eager to meet the post-pandemic demand, flooded the market with inventory. As a result, many landlords had to lower rents to stay competitive.

This decline wasn’t just a Tampa problem; it was a statewide trend. However, Tampa’s robust population growth and strong job market indicate that this was a temporary dip rather than a long-term issue. The oversupply is being absorbed, and demand is already picking up.

2025: A Promising Outlook for Rent Growth

The good news is that 2025 looks much brighter. According to CBRE, rents are expected to grow by 3.1% nationwide, with Florida likely outpacing this average due to its strong economic fundamentals. Here’s why I’m optimistic about rent growth in Tampa:

1. Population Growth: Tampa continues to attract new residents, particularly from states like New York and California. This influx of people creates consistent demand for rental properties.

2. Job Market Strength: Tampa’s diverse economy, including finance, healthcare, and tech, supports steady employment growth. More jobs mean more renters.

3. Absorption of New Units: The oversupply that caused rents to drop in 2024 is being absorbed, reducing competition among landlords.

4. Deceleration in Expenses: As taxes and insurance costs grow more slowly, landlords can focus on rent increases without being undercut by rising operational costs.

My Experience: Adjusting to Market Shifts

In 2024, I had to make some tough decisions to stay competitive. On average, I reduced rents by 8% across my portfolio. This wasn’t ideal, but it was necessary to keep occupancy rates high. However, I’ve already started raising rents on leases renewed in late 2024 and early 2025. Here’s what I’ve learned:

• Communicate with Tenants: Many tenants understand that rents are rising everywhere. Transparency goes a long way in maintaining good relationships.

• Offer Incentives Strategically: In 2024, I offered small perks like reduced late fees or minor upgrades (new appliances, fresh paint) to retain good tenants. This kept turnover costs low.

• Monitor Market Trends: Tools like Rentometer and Zillow’s rental market reports helped me stay competitive without underpricing.

What This Means for Landlords

If you’re a landlord in Tampa or Florida, here’s what you should focus on in 2025:

1. Stay Ahead of Tax Changes: While increases are slowing, they’re not stopping. Budget for a 3-4% rise in property taxes and factor this into your rental pricing strategy.

2. Insurance Optimization: Review your policies and shop around for better rates. As the market stabilizes, there may be opportunities to reduce premiums.

3. Adjust Rents Gradually: Use the 3.1% projected rent growth as a baseline. Don’t rush to recoup all your 2024 losses in one year; tenants appreciate consistency.

4. Invest in Your Properties: Small upgrades can justify higher rents and attract quality tenants. Think energy-efficient appliances, smart home features, or aesthetic improvements.

Final Thoughts

2024 was a challenging year, but 2025 brings a silver lining for landlords. Deceleration in taxes, stabilization in insurance costs, and renewed rent growth create a more balanced environment. By staying proactive and adapting to market conditions, landlords can turn the challenges of the past into opportunities for the future.

After managing 32 properties through these turbulent times, I can confidently say that the Tampa market remains one of the best for real estate investors. The light at the end of the tunnel is here—it’s time to seize it.

Written by CEO of Graystone & Companies & Coach of the Property Profit Academy

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