Landlord Strategy Shifts To Upgrades Over Buying

Landlord strategy in 2025 shifts from buying and selling to property upgrades due to high prices and interest rates.

July 24, 2025

Fewer landlords plan to buy or sell in 2025, with many choosing to hold existing assets.
Nearly 35% of landlords expect to spend over $20K on property upgrades, especially in the Midwest and West.
High property prices and interest rates are the top barriers to new investments.
Most landlords prioritize income over diversification, with limited portfolio changes planned.

Key Takeaways

A Cooling Transaction Market

Landlords are pumping the brakes on new purchases and sales in 2025, with many citing economic headwinds, reports GlobeSt. In a survey conducted in June 2025, just 53% of respondents said they planned to buy property this year—a sharp decline from 67% in November 2024. Meanwhile, 43% said they would make no changes to their holdings, up from 32% previously.

Regional Divide

The trend is especially pronounced in the West, where more than half of landlords now plan to hold steady. The Northeast bucks the trend, with 57% of landlords still looking to expand portfolios. The size of the portfolio also influences strategy—over 20% of large landlords still plan to both buy and sell, compared to only 5% of smaller ones.

Upgrades Over Acquisitions

Rather than expanding, many landlords are investing in their existing properties. The share of landlords budgeting more than $20K for upgrades grew from 27% to nearly 35% nationally, with the biggest increases seen in the Midwest and West. Another 29.6% plan to spend between $5K and $19,999. Still, half have paused improvements altogether, citing different financial priorities and constraints.

What’s Holding Them Back

When asked why they weren’t making new investments, 55% of landlords cited high property prices, followed by interest rates (23%). Other deterrents included limited revenue growth potential (10%) and time constraints (11%).

Eyes On Income, Not Diversification

Income remains the primary motivation for managing rental properties, particularly among larger landlords. Yet diversification is a low priority this year—only 36% of respondents say they plan to diversify their portfolios, while 40% don’t and 25% are undecided.

The bottom line

With acquisition costs high and returns uncertain, landlords are recalibrating. Expect to see more emphasis on asset preservation and tenant retention than market expansion in the months ahead.