Build-to-Rent Residential Market Overview

Unit sizes are much bigger than traditional multifamily units and most include exclusive outdoor space. Property managers handle leasing, landscaping, repairs and maintenance for the entire community. BTR also is an appealing option for empty nesters who want the financial flexibility and lifestyle ease of renting versus owning. https://dietanand.org/most-widely-used-construction-courses-within-the-united-kingdom/ BTR is a particularly attractive option for millennials, who are reaching the prime age for major life milestones like child-rearing but can’t afford homeownership.

Average BTR rent growth decelerated to 1.5% year-over-year in Q2 2024, largely due to a wave of https://214rentals.com/concreting-methods.html new supply, but was well above traditional multifamily rent growth of 0.3%. However, with the recent wave of new supply over the past two years, vacancy has increased and rent growth has slowed significantly from the highs of 2021 and 2022. The larger and less expensive units available in suburban and secondary BTR markets benefited from this shift. While it is 1.5 times as much for a newly originated mortgage payment vs. a new lease payment on average nationally, in some markets it is as much as 2.5 to 3 times more.

Property Features BTR homes offer privacy without other residents living in units that are attached above or below them. In addition to making big yearly profits by renting these units, you can consider selling the community as an entity or converting it into individual for-sale properties. Additional benefits include the fact that these developments are often built in walkable neighborhoods, giving residents easy access to shops, https://miamicottages.com/building-facade-design.html restaurants, and more. Living in a build-to-rent community has many benefits, which is why many U.S. residents prefer living in these properties. Some critics argue that the expansion of build-to-rent housing may contribute to reduced homeownership opportunities and upward pressure on housing prices, particularly as institutional investors acquire and develop single-family properties at scale. One of the biggest barriers to building more rental units can be local opposition to apartment construction.

High demand for rental housing

• BTR vacancy rates remain elevated relative to pre-pandemic averages for nearly all of the nation’s largest BTR markets.
• Many U.S. families consider homeownership a part of the American dream, but the price of real estate is unaffordable for many.
• Unit sizes are much bigger than traditional multifamily units and most include exclusive outdoor space.
• BTR properties have all the characteristics of single-family homes but are built for renters who want features not typically offered by multifamily properties.
• In a way, renting has become part of her identity.

The UK Government is reportedly encouraging the sector’s growth. In a way, renting has become part of her identity. She’s currently renting a three-bedroom NexMetro home — brand-new when she got the key in 2019 — with her mother in Mesa, Arizona. Plus, some like Mona Gass just prefer the ease of renting. Renters who invest what they save on housing can also build wealth. In fact, renting is cheaper than owning in the country’s 100 largest metros, according to LendingTree.

As the wave of new BTR supply is absorbed, vacancy rates are expected to fall more in line with their long-term averages. Like the overall multifamily market, the BTR sector has seen a wave of new construction over the past two years. BTR development accelerated in recent years, peaking at almost 80,000 units under construction in mid-2023.