Build to Rent is an emerging submarket in private rented residential properties designed for rent rather than sale, usually featuring single-family homes within professionally managed communities.These homes resemble their for-sale counterparts in that they provide the chance at homeownership without the high purchase prices, real estate taxes, and HOA fees associated with owning property. Investors tend to drive this market; however, renters also benefit from its benefits.InvestorsBuild-to-rent houses are single-family residences constructed specifically with long-term rental in mind. As opposed to rehabbing projects, these new builds feature high-end finishes and amenities from day one; hence their popularity has skyrocketed; now accounting for 6 percent of new U.S. housing markets according to Hunter Housing Economics data.Investors are drawn to Build to Rent due to its unique combination of desirable tenant demographics and low-risk profile. Rising home prices and mortgage rates have priced many potential home buyers out of the market,Build to Rent offers an appealing solution that allows people to enjoy homeownership benefits without paying steep purchase prices, ongoing maintenance expenses, and property taxes. Investors also appreciate how quickly BTR houses lease up – similar to traditional multifamily assets with similar exit cap rates.BuildersBuild-to-rent is dominated by large real estate and investment firms that use their capital to finance the creation of communities with single-family homes leased out as rentals to tenants.Builders that enter this niche aim to capitalize on the rising demand for single-family rentals, which offer many of the benefits associated with homeownership without expensive purchase costs or HOA dues.Homeownership remains a top goal for most Americans, yet those without enough savings have increasingly turned to renting. Builders have responded by creating communities designed specifically to meet tenants’ needs.Multifamily communities resemble multi-unit housing complexes in many respects and feature amenities like pools, clubhouses, and gyms for residents to use. Residents also appreciate having one company take care of repairs, pest control, and lawn maintenance issues for them.RentersBuild to rent offers renters an appealing alternative to homeownership. Renters enjoy all the luxury amenities associated with single-family houses while being part of a community setting; such as gyms, pools, and landscaping – with no maintenance duties left up to them – no one worries about that either!Renters may not require cars because they can walk to work and socialize with neighbors in shared community spaces – some communities even provide pet parks and playgrounds!As these properties are newly constructed, they come packed with all of the features desired by renters – kitchens equipped with cutting-edge appliances, washers, and dryers for doing laundry at home, and SmartHome features to make life safer and simpler for tenants.CommunitiesHomebuilders are expanding into the rental housing market with single-family homes designed specifically for long-term lease. Commonly known as build-to-rent (BTR), B2R, or build-for-rent, these properties usually sit on large lots with ample indoor and outdoor space – including features similar to what would be found in apartment complexes – such as swimming pools and gyms.Renters often opt for build-to-rent houses as a means to experience homeownership without taking on its financial commitments. Build-to-rent houses tend to be less expensive than traditional apartment units or multifamily homes and more spacious than single-family residences allowing residents to create gardens or other outdoor living spaces.Build-to-rent is growing as a result of rising house prices and low wages, making mortgage qualification harder for some individuals and families. Many new homes marketed toward renters also cater specifically to individuals or families that would not otherwise be able to purchase their own homes due to credit issues or lack of money for down payments.
Build to Rent: A New Trend in Real Estate and Rental Housing
