The rental game looks a whole lot different when regular folks stumble in with no playbook. Meet the “accidental landlords.” These are your neighbors who put the family house on Zillow at a fantasy price, failed to sell, and decided, hey, why not rent it out? Boom—they’re suddenly in the rental business, competing with professional outfits that actually know how to fix a leaky faucet without calling Dad.
Nationally, rents on single-family homes are expected to rise less than 1% this year—the weakest growth since 2011, when half the country was still job-hunting after the financial crash. Translation: Wall Street’s grand plan to get rich off suburban cul-de-sacs just hit a Wisconsin pothole.
It’s not like the fundamentals looked bad. Families are priced out of buying, incomes are stable, and tenants generally pay on time. But then the for-sale market froze up. Of 3 million homes listed this summer, less than a third actually sold. The rest? Sitting stale like last week’s cheese curds. Owners are either cutting prices, pulling their listings, or joining the new club: Landlords By Accident. About 2.3% of homes that were listed for sale suddenly flipped into rentals, and in the overheated Sunbelt that number topped 5%.
That’s a nightmare for big landlords. You know, the guys who wear custom suits and own thousands of houses in Atlanta, Dallas, Phoenix, and Tampa. They bought heavily in the same six cities, confident that growth would go on forever. Now, those markets are oversupplied, rents are sliding, and homeowners-turned-landlords are adding even more supply just to cover their mortgage payments.
Take Invitation Homes, the Goliath of single-family rentals. In Texas and Florida, they’re cutting rents for new tenants while quietly jacking up rents on existing ones—6% hikes in South Florida for loyal residents, even as new move-ins get a discount. That’s like charging the regulars more for a Miller Lite while offering the tourists a happy hour deal. Works for a while, until people figure out they’re being played.
Here in Wisconsin? We’re not immune, but we’re better insulated. Milwaukee, Madison, Green Bay—our housing markets never had the speculative froth of Tampa or Phoenix. That’s why you don’t see blocks of ghost subdivisions here. Midwest landlords (both professional and mom-and-pop) aren’t duking it out with armies of accidental landlords in the same way. Sure, someone in Brookfield might rent out their McMansion when it doesn’t sell, but it’s a trickle, not a flood. That’s why institutional landlords actually like the Midwest right now—steady rents, reliable tenants, and fewer cowboy landlords who just discovered what an escrow account is.
Still, the national mess trickles in. If rates finally drop and buying becomes easier, some renters here will bolt for ownership, leaving more vacancies. If rates stay high, more reluctant sellers will keep turning into part-time landlords. Either way, professional operators have to work harder to keep tenants happy.
Meanwhile, the stocks of the big rental REITs are underperforming the S&P 500, apartment REITs, and even homebuilders. That’s Wall Street’s polite way of saying, “we thought this would be easy money, but it turns out landlording is actual work.”
So what’s the Wisconsin takeaway? Be glad you’re not in Tampa. Accidental landlords can flood into Phoenix and Dallas all they want, but up here, steady beats sexy. Our rents aren’t shooting to the moon, but they’re not cratering either. And for the professional Midwest landlords—the ones with actual maintenance crews and balance sheets—the chaos down south just proves what we’ve known all along: housing isn’t a quick flip, it’s a grind.
And if you’re tempted to become an “accidental landlord” yourself? Just remember: unclogging toilets at midnight is less glamorous than your realtor made it sound.