Best Property Types for Rental Income in 2025
- Mike and Elke
- Jun 3
- 2 min read

With housing costs rising and rental demand remaining strong, real estate continues to be one of the most reliable paths to passive income. But not all rental properties are created equal.
If you’re considering real estate investing this year, here are the top property types in 2025 that offer strong rental income potential.
1. Single-Family Homes in Suburban Areas
Single-family rentals (SFRs) continue to be a top pick for investors.
Why they work:
Consistent long-term tenants (often families)
Lower turnover compared to apartments
Tenants often handle minor maintenance
2025 Trend:
Suburbs near growing cities with good schools and remote-friendly jobs are seeing the most demand.
2. Small Multifamily Properties (Duplexes, Triplexes, Quads)
These offer a great balance between cash flow and manageability.
Benefits:
Multiple income streams from one property
Easier to finance than large apartment buildings
Ideal for “house hacking” (live in one unit, rent the rest)
2025 Note:
Multifamily properties remain in demand, especially in areas with rising rent prices.
3. Short-Term Rentals (Airbnb/VRBO)
Vacation rentals can offer significantly higher income per night—if managed well.
Pros:
High cash flow in tourist-heavy markets
Flexibility to block dates or use personally
Tax write-offs on furnishings, utilities, and repairs
Risks:
Requires active management (or a property manager)
Subject to local short-term rental regulations
2025 Tip:
Look for destinations with year-round tourism and flexible local laws.
4. Mixed-Use Properties
These combine residential and commercial units—like an apartment above a shop or café.
Why it works:
Diversified income streams
Commercial tenants often sign longer leases
Higher ROI in walkable, urban areas
Ideal for:
Investors comfortable with a bit more complexity and seeking long-term wealth building.
5. Student Housing Near Colleges & Universities
Always in demand, student rentals can be cash flow machines.
Advantages:
High occupancy during the school year
Per-room rental strategy increases income
Repeatable tenant cycles (semester-based)
Considerations:
Higher turnover and potential wear-and-tear
Must be close to campus and transit options
6. Build-to-Rent Communities
These are purpose-built single-family homes or townhomes for renting—an emerging trend.
Why they’re growing:
Many families prefer the privacy of a home over an apartment
Institutional investors are pushing this trend
Tenants stay longer and treat it more like a home
2025 Outlook:
If you’re investing in new developments, consider targeting the build-to-rent niche in fast-growing metros.
Bonus: REITs (Real Estate Investment Trusts)
Not a physical property, but a passive rental income option through dividend-generating real estate funds.
Low entry cost (even $100 or less)
Hands-off investing
Ideal for portfolio diversification
Great for those not ready for hands-on management but still want exposure to real estate income.
Final Thoughts
In 2025, the best rental property depends on your goals, location, and capacity to manage the investment. Whether you prefer the long-term reliability of a single-family home or the high-reward (but hands-on) nature of a vacation rental, there's a property type to fit your income strategy.
Thinking about building a rental income portfolio?I’d love to help you evaluate markets, run cash flow projections, and find the right property to get started. Reach out today for a free consultation!
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