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Build-to-Rent Investment Properties

by Bret Evans 06/06/2021

Image by Виктория Бородинова from Pixabay

Build-to-rent is a major term right now for investors. The industry has seen a serious leap in interest in just the past year, making nearly everyone in the real estate space sit up and take notice. We'll look at the special nature of these properties and which attributes make a property more valuable than another. 

The Hot Spots 

Build-to-rent generally refers to a single-family property built to be used by renters rather than owners. It's popular because it's difficult to profit off of a new build, especially when you take into account the price of the land, materials, and permit costs. The areas that are exploding with these properties tend to be affordable cities with plenty of available infrastructure.

Atlanta, Houston, Charlotte: these hot spots are attracting young renters who may not have a sizable down payment saved for a new house, but they're still willing to pay for the right amenities. It's making it relatively easy for investors to recoup their money (and then some). 

The History of Build-to-Rent 

This trend got its start after the recession churned out countless foreclosures and short sales, but has since morphed into its own asset class. Once home prices started to creep back up, investors saw that there was plenty of money to be made in renting even after the economy returned. Today, the build-to-rent industry is largely driven by new homes. Developers may build several dozen homes in a single area, making it easier for property managers to respond to renter requests and perform regular maintenance.  

What's Behind the Success

The most successful build-to-rent properties are those in highly popular areas that would otherwise be too expensive to the everyday renter. Less than half of all millennials have any kind of substantial savings to put toward homeownership, and even the Baby Boomers are starting to turn toward renting (whether they need to or not). In addition, home appreciation has slowed over the past few years and new tax rules don't exactly make it an open-and-shut case that owning is the best choice available. 

Investors who have the opportunity to get involved in build-to-rent will likely be happy they did. The key is to look for properties that are sensible in nature. Avoid those in areas that make it difficult to build (either through expensive permits or restrictive building codes). Opt for properties in nice areas made with affordable, durable materials. This will cut back on maintenance and increase your profits in the long run. 

About the Author
Author

Bret Evans

Bret D. Evans is a real estate industry veteran, a 24-year successful career in an incredibly competitive environment.  As a native to the Bay Area and a homeowner in San Mateo County, his knowledge of the Peninsula’s residential real estate market is extensive and unparalleled.

Bret prides himself on giving his clients the most precise and up-to-date feedback on the state of the market, market trends, and comparable sales and property values; and providing clients with a realistic outlook on what they can expect to achieve in today’s market.

His many years of experience purchasing, owning, selling and renting properties, allows Bret to provide exceptional insight and knowledge at every level of the real estate transaction.  He has built a reputation for providing trustworthy, well-researched advice to his clients and is passionate about providing the best possible service.

Clients choose to work with Bret for his full-service, ethics, experience, and expertise.  He consistently displays his ability to satisfy clients in the buying and selling of their homes. His strong base of loyal repeat customers is the reason why Bret has been successful in the real estate industry.

In an ever-changing market, Bret is with you every step of the way!