The Great Rotation: Why Investors Are Moving Back to Long-Term Rentals in 2026
BiggerPockets just surveyed more than 600 of its members about their plans for 2026, and the result is the clearest strategy shift in years: over half of investors now say long-term rentals are the best play going into 2026, while short-term rental sentiment has cooled noticeably. Most still plan to grow their portfolios. Put those together and you get a simple picture — a lot of capital is rotating toward exactly the kind of asset Memphis does best: the affordable, cash-flowing single-family rental.
What the sentiment data actually says
The BiggerPockets Pulse survey found that more than half of investors polled believe long-term rentals are the top strategy heading into 2026, with short-term rental sentiment notably lower — and yet the majority of respondents still intend to buy over the next 12 months. That is not a market backing away from real estate; it is a market changing lanes. After several years of being sold "passive" Airbnb income, many operators have discovered they were actually running hospitality businesses, and they are tired. The calm, boring, predictable long-term lease is back in fashion.
The financing backdrop explains the rest. Thirty-year rates have spent the summer stuck in the mid-6s, investment-property money still runs roughly 7.1%–7.6%, and DSCR pricing spans the high-5s to high-7s depending on leverage and structure. When money costs that much, investors gravitate to the strategy with the fewest surprises — and to the metros where the numbers still work at all.
Why the rotation points at Memphis
A rotation into long-term rentals is, in practice, a rotation into affordable, job-anchored metros with strong rent-to-price ratios — the profile that keeps putting mid-South and Midwest markets at the top of the trending lists. Memphis checks every box: entry prices where a working budget still buys a whole house (the current crop of screened deals on our investments page runs roughly $80,000–$113,000), rents that hold steady, and a construction pipeline that has thinned to a trickle — a setup we broke down in last week's supply-wave article.
"When the crowd decides long-term rentals are the place to be, the advantage shifts to buyers who already know which streets rent — and at exactly what number."
The flip side: the 'safe' trade gets crowded
Here is the honest caveat. When sentiment consolidates around one strategy, the clean, stabilized, tenant-ready house gets more bids. Some of the money leaving short-term rentals will show up at the same Memphis price points you are hunting, and a converted Airbnb landing on the long-term market adds a competitor here and there. A popular strategy is not the same thing as a good deal — the underwriting still decides. Cash flow at today's cost of capital, a debt-service coverage ratio with real margin, and a verified market rent are what make a deal safe, not the label on the strategy.
The playbook for the next 12 months
- Underwrite like it is still hard. Model today's rates, not the refinance you are hoping for. If the deal needs a rate cut or 5% rent growth to pencil, it does not pencil. Run every candidate through our deal calculator and aim for DSCR comfortably above 1.2.
- Move before the herd finishes rotating. Sellers in Memphis are still pricing off flat rents and soft sentiment. Buyers who act while the rotation is early are getting tomorrow's competition-free pricing on today's inventory.
- Earn the calm. Long-term rentals only feel passive when the fundamentals are handled — screening that actually screens, preventive maintenance instead of deferred surprises, and renewals fought for before the lease ends. That is the operating discipline the rotating money often underestimates.
If you are weighing a Memphis acquisition while the window is open — or you own here already and want to know what the rotation does to your street — request a free rent analysis or talk to our broker. We manage what we advise on.
Sources & further reading: BiggerPockets: BP Pulse — Short-Term Rentals Have a Murky Outlook (2026 survey), BiggerPockets: Rental Investors Become the Most Bullish in Years, BiggerPockets: The Top Trending Rental Markets to Start 2026, Rent to Retirement: Investment Property Mortgage Rates, July 2026.