America’s Landlords Are Aging. Will Their Heirs Take On the Job?

America’s landlords are getting older, setting up a generational handoff that could reshape how millions of rentals are owned and operated.

About 11.2 million U.S. rental properties are owned by individual investors. Among them, roughly 6.9 million—62%—are managed by the owner or an unpaid family member, according to U.S. Census Bureau data.

And many of the people behind those family-run rentals are reaching retirement age and beyond. Nearly 40% of U.S. households receiving rental income are headed by someone 65 or older, compared with 30.6% of households overall.

“The sandwich generation doesn’t want to be the one who gets the call when a toilet breaks at 3 a.m.,” says Scott Stollar, a San Diego real estate agent and certified probate and trust specialist who says he has consulted about 30 families on inherited or handed-down homes over the past two years.

That puts rental property squarely in the Great Wealth Transfer, as $124 trillion is projected to pass from baby boomers and older generations through 2048.

But the transfer is arriving across a stark generational divide in housing. Younger adults are nearly three times as likely to rent, and they are more supportive of limits on landlord power: In a late-2025 poll, 67% of adults aged 18 to 29 favored rent control, compared with 52% of those 65 and older.

That could make the coming transfer look like a generational clash over landlording itself. But the brokers, property managers, and estate attorneys handling these transitions describe a much more practical divide. 

Heirs want the wealth associated, they say, but what they are less eager to inherit is the labor, risk, and hands-on business that built it.

The complicated business of being a landlord

“Most heirs do not want to inherit real estate once they realize most real estate is not really ‘passive income’ as it is often portrayed,” says Todd J. Drowlette, managing director of TITAN Commercial Realty Group.

Part of the problem is that the economics of owning rental property have drastically changed.

By 2023, operating expenses on one-unit rentals had climbed to about $8,670 per unit, up roughly 40% from $6,194 in 2020, according to the Rental Housing Finance Survey. National asking rents, meanwhile, peaked that year and have since edged lower, according to data from Realtor.com®.

It’s set up a tough environment of rising costs and diminishing returns, especially when paired with the growing popularity of rent control policies that restrict how much revenue landlords can bring in to offset rising operating expenses.

New York City offers an extreme example. The city’s own data shows operating costs for stabilized buildings rose 5.3% in the latest year, including a 10.5% jump in insurance after an 18.7% increase the year before.

For a family-owned business, it's an especially punishing squeeze.

Ann Korchak’s family has owned rental property in New York since 1941. She now manages two 10-unit buildings on the Upper West Side and has family members living alongside tenants.

In previous reporting for Realtor.com, Korchak estimated that 75% to 80% of her rent roll goes toward property taxes, insurance, utilities, and water and sewer costs. She said the property tax bill on each building had climbed from roughly $33,000 two decades ago to nearly $100,000.

The age of the housing itself adds another complication. The median U.S. rental home is now 45 years old, and more than 42% of renter-occupied single-family homes have some repair need.

“The older generation tended to want to do everything themselves,” says Jessa Gary, an estate planning attorney and partner at Isaac Wiles. “The younger generation saw what Mom and Dad went through, and they don’t necessarily want that to be their reality.”

Heirs may keep the rental—and change the way it operates

For heirs who want to preserve the asset without taking on the hands-on job, there is an obvious alternative: Pay someone else to run it.

“What surprised me is how often they keep the home as a rental, even when it was their loved one’s primary residence,” Stollar says of the families he has worked with. “Most of them hire a property manager because they don’t live in the area.”

Sylvie McCracken, an Oregon property manager, says about 15% of her portfolio now involves some form of generational handoff.

But while she often sees heirs keep the real estate, their approach is markedly different from their parents'.

“Their parents ran it like a relationship. Heirs run it like an investment,” McCracken says. “They want reporting, a clear return, written leases, and a plan to bring the property up to standard and closer to market rent.”

That difference could represent a significant change for renters.

A parent may have treated the property partly as a long-term relationship with tenants. An heir may evaluate the same home through return, expenses, and market rent.

There is some evidence that ownership structure already affects those decisions.

In a 2022 Urban Institute survey of landlords, 52% of landlords with one property said they planned to raise rent, compared with 92% of landlords with more than 10 units. One-property landlords planning increases were also more likely to keep them below 5%.

Of course, that doesn't mean an inherited mom-and-pop rental will suddenly behave like one owned by a larger operator. But the Urban Institute data points to what tenants could lose if more rentals move out of the hands of very small landlords: Owners with larger portfolios were much more likely to raise rents and by larger amounts.

The handoff could change which homes stay rentals

Other heirs reach a different conclusion: The property may still hold substantial wealth, but keeping it as a rental no longer makes sense.

Tim Moldenhauer, a real estate broker in Arkansas, recently worked with three siblings who inherited a townhome their parents had rented out to college students.

The property produced about $1,200 a month in profit for their parents. Split among three children, that same income amounted to roughly $400 a month each.

“When the parents died, the kids that inherited the property didn't see the value in continuing to rent it out because between the three kids, the profit would only be about $400 per month,” Moldenhauer says. “They opted to sell the property, and we helped them sell it.”

And this is where the larger market impact may emerge. Multiply that decision across thousands of aging small landlords, and the handoff could start to change which homes remain rentals.

Recent evidence suggests smaller landlords are more likely than large investors to return homes to the owner-occupied market.

A 2026 Cleveland Fed analysis of seven large counties in Ohio and Pennsylvania found that single-family homes owned by smaller investors were more likely to become owner-occupied within three years than those held by larger investors.

But selling doesn't always mean a home leaves the rental market. Another small landlord can buy it, or it can become part of a larger portfolio.

The latter has become more common over time. Between 2001 and 2021, the share of single-family rentals owned by nonindividual investors rose from 17% to 25%, according to Harvard’s analysis of U.S. Census data. Among two- to four-unit rental properties, the share more than doubled, from 15% to 32%.

For heirs, selling can also change what gets passed down, according to Barry E. Janay, an estate planning attorney and founder of the Law Office of Barry E. Janay.

“Many times, the parents will direct their assets to be liquidated and just give the kids cash to go on with their lives,” he says.

Still, other families preserve the real estate but make it easier for the next generation to manage.

Stollar, the San Diego real estate agent, recently worked with a family that sold several properties in Santa Barbara and used a 1031 exchange to buy properties closer to their daughter in San Diego, where she could manage them.

“Some families don’t wait to hand it off," he says.