“Renters, this is your year,” Zillow senior economist Kara Ng recently told NPR. It’s apparently a good time to be a tenant, as nearly 40% of listings on the market were being offered with a concession from the landlord as of June, according to a recent report from Zillow.

However, before landlords wring their hands in despair at the idea of a free month’s rent and lost revenue, it’s worth drilling down into the data—as the numbers can be misleading.

According to Zillow’s June rental market analysis, the typical U.S. average rent reached $1,965, a 2.2% increase from a year before. However, with concessions up nearly 5% from the previous year, the cost of getting into an apartment could look good from a tenant’s perspective.

For smaller landlords, analyzing which markets are offering the most concessions and why, and where rents are increasing, can help you determine how to price your units and whether to jump aboard the concession cavalcade.

A Highly Nuanced Rental Market

The cities offering the greatest number of concessions are those where new apartment development has been most robust and supply has increased. Zillow found that 67.1% of listings in Charlotte offered concessions in June, followed by Denver at 65.9% and Dallas at 64.6%.  

Rents were down in San Antonio (1.8%), Austin (1.7%), and Denver (1.3%). Much of the new inventory coming to market resulted from 600,000 new apartment units being constructed in 2024, the most in 38 years.

“There’s a lot of apartment buildings hitting the market all at once,” Ng told NPR. “And property managers are trying to fill it, and they’re doing it with freebies.”

For small investors looking for a city to buy in, the lesson is simple: Stay away from cities that are oversupplied, unless you’re prepared to wait a while to get your place rented.

Conversely, in low-supply, high-demand markets, rent growth is up, according to Zillow. Northern California’s pricey San Francisco (up 8.2%) and San Jose (up 6.2%) are enjoying an AI boom, with affluent tenants willing to pay ever-increasing prices in a tight housing market.

“The U.S. built more new units in 2024 than any year in the past half-century, but that boom largely bypassed the Northeast and coastal California, which is exactly why rental competition there is so intense,” Ng said in a Zillow press release.

Zillow says single-family rents were up 3% year over year in June to $2,320, double the 1.5% gain for apartments, now at $1,789. 

Providence, Rhode Island, a small city with a population of 195,000 that is both pricey and has a housing shortage, made Zillow’s list of the hottest rental markets of 2026, with the lowest number of landlords offering concessions.

Best Places to Be a Landlord in 2026

The best cities to be a landlord in 2026 are likely to differ depending on who you ask, but most surveys end up saying roughly the same thing: The Midwest, with a few Southern cities thrown in, makes for the best place to invest your money if cash flow is a priority.

Top Cities for High Rental ROI

Landlord insurance specialist Obie Insurance took affordability, a growing job market, and population increases into consideration when compiling its list for cities likely to give you the greatest return on investment.

The Midwest

1. Cleveland, Ohio: Low prices and high demand have propelled Cleveland to the top of investors’ lists.
2. Indianapolis, Indiana: A diverse economy, growing population, and favorable landlord-tenant laws have made it a hot spot for investors in recent years. However, many investors have experienced foreclosure during the gold rush, investing in saturated areas with a less-than-stellar tenant pool.
3. Kansas City, Missouri: A strong economy and growing population, coupled with low prices and high rents, have made Kansas City a solid Midwestern investment option.

The Sunbelt

Despite the deluge of new construction and subsequent landlord concessions, if you prefer investing in a warmer climate, there are still some places in the Sunbelt where you can get a decent ROI.

1. Dallas/Fort Worth: This has been one of the top investment areas for some time due to its surging population, relatively affordable housing, and diverse employment opportunities.
2. Jacksonville, Florida: Although the Jacksonville market isn’t for everyone due to its reputation for crime, Jacksonville also has a growing job market and has been a popular investment haven for institutional investors, who own over 22% of single-family rental houses.
3. Tampa, Florida: Tampa has had a bad investment rap in recent years due to extreme weather and high insurance costs, but it also has a strong tourism base, a high number of Fortune 1000 companies, and a high influx of new residents, along with its neighbor, St. Petersburg. It offers both a good short-term and long-term rental market.
4. Birmingham, Alabama: New development and a robust healthcare sector have helped make low-cost Alabama another investment favorite in recent years.

Final Thoughts

Headlines are designed to get your attention, but the devil is in the details. There are good and bad markets within most metros. Detroit, Memphis, and Columbus are also mentioned as favorable rental markets, but good investments are very much a neighborhood-to-neighborhood, and sometimes street-to-street, proposition.

One important thing to distinguish from headlines that use the words “rental market” is that they often refer to large apartment buildings with amenities and funded by Wall Street. These buildings can afford to offer concessions because they have so many units and often factor them into their lease-up models to entice residents—a move often followed by rapid rent hikes!

As a small investor, you can afford to be a little more nuanced—renting for less, with moderate rent increases and no junk fees (parking, tech, and trash) to keep tenants in your rental. That’s a win-win. In that respect, every year can be a renters’ year.