If you are one of the many home seekers looking for bigger space but finds a single-family home mortgage too expensive, then you may want to consider the newest trend in real estate, the build-to-rent model.
The build-to-rent class is a new real estate model gaining attention for dwellers looking for an affordable home that could offer a community living setup.
According to Forbes, while the build-to-rent model only comprises 5% of the homes built, it grows rapidly and gets more demands in the market.
Usually, developers would build a community of single-family homes, follow the "build-to-sell" business plan and attract buyers wanting to get their own place. But now, more developers are taking the "build-to-rent" route and appeal to people looking for rental properties with community and shared amenities.
What is the Build-to-Rent Model?
Commonly called BTR or B2R, the build-to-rent community offers a suburban, single-family neighborhood lifestyle. But instead of buying the house and lot, the homes are constructed exclusively for rental purposes.
The latest development in BTR properties offers a better experience for tenants by adding amenity-rich communities minus the hefty homeowners association costs.
The build-to-rent units often offer single attached or detached homes with up to three-bedrooms. It features high-quality interior furnishing that renters could not get in renting apartments. This includes carports, private yards for each unit, high ceiling rooms, stainless-steel appliances, hardwood-style flooring, washers and dryers, quartz countertop, and more.
Build-to-Rent Target Market
The build-to-rent model has wider potential customers ranging from retirees, small family, and singles seek an independent living.
The BTR lifestyle appeals to seniors as it allows them to avoid the inconvenient factors of homeownership. It also gives them the liberty to downsize their belongings and cash out their equity.
This community type is also perfect for growing families because it offers ample space to raise the kids, given the spacious backyard and shared amenities.
Meanwhile, one of the fast-growing BTR developers, NexMetro, told Forbes that about one-third of their renters are single professional millennials and 60% of the residents are independent single ladies.
Rise of Build-to-Rent in 2021
Because of the coronavirus global pandemic, the BTR model is expected to skyrocket this 2021 as the pandemic drove apartment renters to seek suburban single-family homes. Compared to apartments, build-to-rent homes offer a spacious and comfortable living experience, especially now that people spend more time at home.
Based on a 2020 survey, at least 23 million people in the United States want to leave the metro and look for low-cost suburban living where they can work remotely.
It is the perfect time for investors to take advantage of the trend and make sure to check critical factors such as location and amenities.
But even before the pandemic, the BTR model is already getting a significant growth as people are no longer enticed with the commitment that comes with homeownership. On top of that, acquiring a property is also getting more expensive, but the working-class wages remain the same, leading middle-class Americans to settle for home rentals instead of homeownership.
