On-time payments up but late payments still above 10%.
Independent Landlord Rental Gains in December 2025
KEY TAKEAWAYS
- On-time rental payments in independent landlord properties rose to 83.7% in December 2025, up 73 basis points from November.
- Year-over-year, on-time payment rates are still lower, marking 29 months of annual declines in the independent landlord sector.
- Full-payment rates averaged 96.0% in 2025, exceeding 2024 averages despite late payments remaining elevated.
- Western states, especially South Dakota, Utah, and Alaska, led on-time payment performance in December 2025.
Gradual Improvement in On-Time Collections
According to Chandan Economics, independent landlord rental performance showed further positive momentum in December 2025. Chandan Economics reports that on-time rental payments in mom-and-pop operated units gained for a third consecutive month, reaching 83.7%. This improvement, though modest, suggests a slow recovery after a late-summer lull.
Despite the recent uptick, on-time payments remain down compared to a year ago—declining by 224 basis points from December 2024. This marks the 29th straight month of annual declines, though the gap has narrowed from larger drops seen earlier in 2025, including a notable dip in midsummer.
Late Payments Drive Underperformance
Elevated late payments remain the primary strain on independent landlord rental performance. In 2025, late rents consistently exceeded 10%, a significant change from prior years when double-digit late rates were rare. Still, most tenants finished the year eventually paying in full, with the annual average full-payment rate at 96.0%.
The three-month moving average for late payments peaked at 13.4% in September but has since eased. The latest forecasts show further improvement, with late payments projected at 11.7% for December.
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Performance by Property Type and Region
Independent landlord rental performance remains strongest in 2–4-family units, with on-time payment rates at 84.2% for December. Single-family rentals (83.6%) and multifamily properties (82.9%) also saw month-over-month improvements.
Regionally, Western states continued to outpace the rest of the country. South Dakota (94.6%), Utah (94.5%), and Alaska (94.4%) topped national rankings, while New Hampshire was the standout among East Coast states.
Outlook for Independent Landlords
Though on-time payment rates remain below post-pandemic highs, the latest numbers signal stabilization for independent landlord rental performance. Labor market support, easing inflation, and improving rent collections point to cautious optimism as the sector enters 2026. Ongoing monitoring remains crucial for landlords, investors, and policymakers tracking the market’s health.
Source: CRE Daily
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