The build-to-rent (BTR) housing model is rapidly gaining popularity around the world. Build-to-rent homes are those built specifically for long-term rental instead of purchase. Developers construct entire communities and apartment buildings to operate as rental housing.

Several compelling factors are driving the growth in build-to-rent demand and this article is completely build-to-rent explained.

Lower Risk Than Traditional Rentals

One appeal of build-to-rent is the lower risk compared to traditional rental properties. With traditional rental real estate, individual investors buy and manage one property at a time. This leads to more volatility and higher maintenance costs. Build-to-rent developers create large portfolios of hundreds of units. Having many units lowers vacancy risk. Large scale also leads to professional property management and consistent upkeep. For renters, this means greater security and reliability.

Focus On Quality And Amenities

Build-to-rent properties provide high-quality finishes and abundant amenities rarely found in classic multifamily buildings. They feature upgrades like granite countertops, hardwood floors, and stainless-steel appliances. Community amenities include fitness centers, swimming pools, clubhouses, and more. This resort-like living attracts renters who can enjoy services without the burdens of ownership.

Good Locations Near Jobs And Transit

Developers select build-to-rent locations in desirable urban and suburban communities near major employers. Ease of commuting attracts working professionals. Proximity to public transit like light rail lines is also a key benefit. Walkable neighborhoods allow residents to enjoy local amenities without driving everywhere. These factors save renters time and money.

Flexibility And Mobility

Long-term renting offers advantages like flexibility and mobility. Renters of build-to-rent homes aren’t tied down by a mortgage. They can more easily relocate for new job opportunities. Landlords handle maintenance issues, so there are no large surprise expenses. Build-to-rent provides an attractive option for those not yet ready for home ownership.

Strong Community Environment

Build-to-rent operators place great emphasis on building community. They host social events and activities to cultivate bonds between residents. Many have full-time community managers who help neighbors connect. This sense of community caters to renters seeking an inclusive environment. Friendly communities also aid tenant retention.

Appeals To Downsizing Baby Boomers

The build-to-rent trend also ties into an enormous demographic shift. As baby boomers reach retirement age, many seek to downsize from large-family homes. Build-to-rent communities provide built-in amenities that cater to this population. Low-maintenance living in a socially stimulating community setting appeals to retirees.

Institutional Investment Creating Supply

The build-to-rent industry has exploded thanks to heavy investment from institutions like pension funds. These deep-pocketed investors view build-to-rent communities as stable, long-term assets for generating income. Their billions in capital are financing build-to-rent development nationwide. This influx of funding helps bring supply online to meet burgeoning demand.

Sector Now Seen As Mainstream

For many years, single-family home rentals were viewed as an alternative niche sector. However, the success of early build-to-rent projects has demonstrated the profit potential for developers and investors. The sector is now seen as a stable, legitimate component of the housing market. Build-to-rent has gone fully mainstream.

Renter Preferences Shifting

Today’s renters have different priorities than past generations. Younger renters seeking vibrant neighborhoods are drawn to build-to-rent’s community-centric model. Downsizing retirees also appreciate the lifestyle focus. Households across age groups desire the stability and consistency build-to-rent provides. Their preferences are fueling a rental revolution.

To Wrap Up

Build-to-rent’s rise reflects how the housing landscape is evolving. This segment seems poised for tremendous growth as demand spreads. Developers are racing to bring new build-to-rent projects online in desirable markets across the country. For both providers and tenants, build-to-rent represents an appealing opportunity on multiple fronts.