The Ultimate Guide to Build to Rent Homes
In a number of states, renting became a much preferred choice than buying or renting a home. There was a time when homeownership provided wealth-building and young and older Americans today prefer rented housing. Instead of renting apartment buildings, many people opt for construction homes as they join the entire community. Around 670 new construction-to-leave home sales were made in 2021 breaking previous records. 2022 would have been considered an especially fruitful year in the housing industry, with a report suggesting about 14,000 houses are expected to be sold by 2020. Built-to-rent homes offer rented comfort along with all of the comforts of an apartment.
What are build-to-rent homes?
Build-to-rent has become an established model among property investors in which an investor acquires small portions of a property to-rent to a property developer or sells the property after the sale. Thus constructed homes are intended for rental for long periods. These houses range in size to accommodate the needs of those searching for long-term rental housing. Contrary to a long-term lease, the house can be extended over a long period of time. When a developer wants to buy a new BTR residence, the developer builds multiple rental-homes within the vicinity, generating a built-to-rent community.
What is Build-to-Rent concept?
Build-to-rent homes are built to provide rental services. Unlike typical apartments and similar, multifamily structures, build-to-rent homes have specifically been designed to be a suitable solution for people looking for a long-term rental residence.
Is Build-to-Rent profitable?
This property also features the highest rent renewal rate at 74%. These increases increase the profit for renters. Builder-to-let properties offer investors great possibilities to make a living and profit from investments.
Built-to-Rent Communities are present in both urban & suburban areas
Because the owners require extensive land for development, the rentals of houses are prevalent in lower density areas and the majority (61%) are situated within a neighborhood. In addition, coronavirus arguably had a significant effect on the increase in popularity, said Christopher Michael, architect at archisoup.org. Many have moved from the cities and apartments to seek more housing for rural and suburban living”. This is in alignment with my rental survey which found that these types of rental housing are also attractive for families and are more accessible to them.
In recent years, the demand for rental properties has increased significantly, particularly among young professionals and families who are looking for flexible and affordable housing options. As a result, the build-to-rent (BTR) market has been on the rise, and it is expected to continue to grow and thrive in the coming years.
One of the main reasons why build-to-rent communities will flourish in 2023 is the increasing affordability of rental properties. With the rising costs of homeownership, more and more people are opting to rent instead of buying, which has led to a surge in demand for rental properties. In particular, single-family rentals have become more popular, as they offer more space and privacy than traditional apartments.
Another factor contributing to the growth of the BTR market is the growing preference for urban living. As more people move to cities in search of job opportunities, education, and a better quality of life, the demand for rental properties in urban areas has increased. Build-to-rent communities offer an attractive option for people who want to live in the city without the high costs and long-term commitment of homeownership.
Build-to-rent communities often offer a range of amenities and services that make them an appealing option for renters. These communities are often designed to be more sustainable, with features such as energy-efficient appliances and low-flow plumbing fixtures. They also often offer a range of amenities, such as fitness centers, swimming pools, and community spaces, which can provide a sense of community and make living in a rental property more enjoyable.
In addition, build-to-rent communities are often managed by professional property management companies, which can provide a higher level of service and maintenance than traditional rental properties. This can give renters peace of mind and make living in a rental property more comfortable and convenient. Many BTR communities also offer luxury features such as high-end appliances and finishes, which can make them an appealing option for renters who want to enjoy a higher-quality living experience.
The BTR market has also attracted the attention of real estate investors, who see BTR communities as a promising investment opportunity. Real estate investment trusts (REITs) and home builders, such as Toll Brothers, have begun to invest in BTR communities, and many individual investors are also looking to add BTR properties to their investment portfolios.
Despite the many benefits of BTR communities, there are also potential drawbacks to consider. For example, some renters may not want to live in a community with a high tenant turnover, as this can make it difficult to develop a sense of community. Additionally, BTR communities may have higher monthly fees than traditional rental properties, which can make them less affordable for some renters. Additionally, BTR properties are not always located in the most desirable neighborhoods, which can be a drawback for some renters.
Overall, the BTR market is expected to continue to grow and thrive in the coming years, as more and more people turn to rental properties as an affordable and flexible housing option. With their many benefits, BTR communities are well positioned to meet the growing demand for rental properties and provide renters with a high-quality living experience.