Raleigh, NC, is one of the fastest-growing cities in the Southeast—and that growth is transforming the local rental market. As home prices climb and the supply of affordable housing struggles to keep up, demand for rental housing continues to surge. For landlords, this presents both a challenge and an opportunity.
Whether you’re offering long-term leases, short-term stays, or coliving rental models like PadSplit, understanding Raleigh’s housing dynamics and zoning landscape is key to maximizing rental income while meeting critical community needs.
Why Raleigh is a strong rental market
Raleigh has become a magnet for new residents thanks to its strong job market, universities, and high quality of life. That population growth, however, has outpaced housing supply—especially for renters.
Today, nearly 47% of Raleigh households are renters, and average monthly rents sit between $1,500 and $1,700. While the city remains more affordable than some larger metro areas, rising costs are creating serious challenges. Nearly half of renters in Raleigh are now cost-burdened, spending over 30% of their income on housing.
This housing strain is most acute for service workers, educators, recent graduates, and lower-income families. That makes workforce housing and flexible lease options more important than ever, especially in underserved and transitional neighborhoods.
Raleigh’s job market and growth drivers
Raleigh sits at the heart of the Research Triangle, alongside Durham and Chapel Hill—a region known for innovation, education, and steady job growth. The city’s economy supports a wide range of housing demand, from students to tech workers to healthcare professionals.
Key industries include:
- Technology and innovation: Employers like Cisco, Red Hat, and IBM drive demand for rental housing among young professionals and remote workers.
- Healthcare and life sciences: WakeMed, UNC Health, and Duke Health provide thousands of jobs and support strong demand near hospitals and clinics.
- Higher education: NC State University anchors Raleigh’s academic landscape and attracts students, faculty, and seasonal renters.
- Government: As North Carolina’s capital, Raleigh has a large public-sector workforce with stable housing needs.
- Construction and trades: New development and infrastructure projects create steady demand from skilled laborers and contractors.
With energy costs rising and sustainability becoming more important to tenants and policymakers, landlords who invest in energy-efficient HVAC systems, insulation upgrades, or weatherization can lower operating costs and attract eco-conscious renters.
Understanding zoning and rental regulations in Raleigh
North Carolina has a landlord-friendly legal framework, with no rent control and relatively streamlined eviction laws. That said, local zoning and permitting still apply—particularly for short-term rentals and shared housing models.
- Short-term rentals (STRs): Allowed with a zoning permit, STRs must comply with rules on owner occupancy, parking, and maximum occupancy limits. STRs are often allowed only if the property is the host’s primary residence or part of a duplex.
- Long-term rentals: Landlords must comply with habitability standards and housing codes but do not need to register individual units unless operating a multifamily building.
- Coliving rentals: Legal, but subject to zoning and occupancy limits. Homes in R-6, R-10, or RM zoning districts tend to be more flexible for multi-tenant leasing arrangements like PadSplit.
Before investing in shared housing, landlords should review lot size, zoning overlays, and local building code requirements.
Best neighborhoods for long-term rentals
East Raleigh
- Why invest? This historically underserved area is undergoing revitalization and offers affordable homes close to downtown job centers.
- Rental market insight: Demand continues to rise as redevelopment brings new infrastructure and commercial activity east of downtown.
- Best property types: Older single-family homes, duplexes, and modest multifamily units.
- Ideal tenants: Working families, contractors, and public-sector employees.
North Hills
- Why invest? A suburban neighborhood with strong schools, shopping, and access to employers, North Hills is known for long-term stability.
- Rental market insight: Homes appreciate steadily, and vacancy rates remain low among long-term renters.
- Best property types: Ranch homes, split-levels, and townhomes.
- Ideal tenants: Professionals, healthcare workers, and families seeking comfort and convenience.
Best neighborhoods for short-term rentals
Downtown Raleigh
- Why invest? The city’s cultural and business hub attracts tourists, business travelers, and visiting academics year-round.
- Rental market insight: STRs are permitted with proper zoning and permits. High walkability and event traffic support strong occupancy rates.
- Best property types: Lofts, condos, and rowhouses in mixed-use zones.
- Ideal guests: Business travelers, hospital visitors, and guests attending events or conferences.
Hillsborough / Cameron Village
- Why invest? Located near NC State, this area sees consistent demand from university visitors, faculty, and conference attendees.
- Rental market insight: STRs in this neighborhood do well with the right permits and licensing.
- Best property types: Bungalows, small homes with ADUs, and multi-bedroom properties.
- Ideal guests: Students’ families, alumni, and short-term university staff.
Best neighborhoods for coliving rentals
Southeast Raleigh
- Why invest? One of the most affordable parts of the city, this area offers strong rental demand from essential workers and those in transitional housing situations.
- Rental market insight: Larger homes with multiple bedrooms can generate high returns through shared housing models.
- Best property types: 4+ bedroom homes, duplexes, and properties with multiple bathrooms.
- Ideal tenants: Entry-level workers, gig economy participants, and individuals seeking flexible, lower-cost living.
Northeast Raleigh
- Why invest? With easy access to the Beltline and major roads, this area appeals to both commuters and students.
- Rental market insight: Homes with open layouts and extra bedrooms are ideal for room-based leasing strategies.
- Best property types: Two-story homes, ranch homes with basement suites, and larger single-family properties.
- Ideal tenants: Teachers, healthcare aides, and roommates looking to share costs.
Emerging neighborhoods to watch
Brentwood
- Why invest? This North Raleigh neighborhood offers access to downtown and the Beltline, and is seeing increased investor interest.
- Rental market insight: Demand is growing due to affordability, mature trees, and proximity to new retail and transit investments.
- Best property types: Mid-century ranches and homes with ADU potential.
- Ideal tenants: Young professionals, first-time renters, and value-conscious families.
Caraleigh
- Why invest? Located near Dix Park and Lake Wheeler, Caraleigh is gaining attention for its walkability, green space access, and mixed-use redevelopment.
- Rental market insight: As more businesses move into this corridor, demand for housing near the park is rising.
- Best property types: Renovated cottages, townhomes, and homes with flexible floorplans.
- Ideal tenants: Remote workers, creatives, and small households seeking a close-to-downtown feel without the price tag.
Financing and tax considerations for Raleigh landlords
- Taxes: Property taxes are moderate but rising due to reassessments tied to growth.
- Financing: DSCR loans, HELOCs, and renovation loans are popular for investors adding value through coliving or shared housing upgrades.
- Operating costs: Energy-efficient upgrades like modern HVAC systems and insulation help reduce expenses, particularly in older homes.
- Sustainability opportunities: State and utility programs may offer rebates for energy upgrades, water conservation, and smart thermostats.
Make the most of Raleigh’s rental market
Raleigh continues to be a top-tier rental market for landlords who understand its growth drivers and housing gaps. Whether you’re investing in long-term leases, room-by-room coliving rentals, or short-term stays, the key to success is providing housing that’s flexible, affordable, and compliant with local regulations.
Coliving rental models like PadSplit offer a way to boost income, reduce vacancies, and help solve Raleigh’s workforce housing shortage. With the right property and strategy, landlords can build lasting value while making a real difference in one of the Southeast’s most livable cities.
Join PadSplit today to increase your rental revenue while helping address Raleigh’s growing need for affordable housing.
The information provided in this blog post is for general informational purposes only. It should not be construed as legal, financial, or professional advice. The content is intended to provide general guidance and should not be relied upon for making specific decisions.
PadSplit strongly recommends consulting with qualified legal counsel, licensed financial advisors, tax professionals, or other relevant experts for advice concerning your specific situation and investment needs. PadSplit makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, or suitability of the information contained in this post.
