3 Tips for Capitalizing on the Build-to-Rent Market


Build-to-rent, or B2R, is one of the fastest-growing sectors of the U.S. housing market, and demand from renters and investors is growing alongside it. Between 2016 and 2017, B2R experienced the highest annual increase in 14 years1. And in 2018, the number of single-family home rentals was up to 43,000 - an increase from 37,000 in 2017, according to the National Association of Home Builders2.

There are three main reasons this trend is taking off - the first being affordability. Demand for single-family homes for rent is an enticing option among the millennial generation3. Older millennials — in their late 20s through late 30s — are getting married and starting families, but many still can't quite afford a home, and not all of them want one. Renting offers a financially viable housing option that doesn't come with added expenses like down payments and interest rates on top of the student loan debt many face.

Affordability isn't the only attractive option of renting. The single-family for rent market is also targeting people who can afford to buy homes, like baby boomers, but choose not to because of flexibility. Renting gives them the option to pick up and leave whenever they'd like without having to go through the process of selling. Boomers can downsize and stay close to family while still enjoying the amenities of a single-family home.

This trend also provides a level of simplicity that owning a home simply can't offer. A running toilet or a broken fridge requires one call to a landlord, whereas a homeowner of a single-family home is solely responsible for any maintenance issues that may arise. Renters can avoid the traditional upkeep that accompanies owning a home.

As the demand for single-family rentals continues to increase, here are three tips for builders looking to enter the booming B2R market:


Include the right amenities

Topping the list of amenities4 in B2R communities is pools, followed by gated entrances, walking trails, on-site maintenance and dog parks. While these communities have similar features to multifamily housing, they're detached from their neighbors, which helps limit noise issues and lack of privacy that can come with having neighbors all around. Inside B2R homes, renters have come to expect smart technology, with 58% of residents5 finding it beneficial, and 84% saying they would like to see smart features in their communities. Tech including smart thermostats, lighting, door locks and security cameras are among the top-rated smart home features.


Help smaller homes feel spacious

Single-family homes for rent are typically smaller6 with fewer bedrooms and bathrooms. However, the larger you can make a space feel, the better. For example, many B2R properties include 9-foot ceilings to help homes feel more spacious. Designate a vertical space in a closet or behind a door for a stackable washer and dryer or all-in-one unit, which can save room without skimping on function. In the kitchen, include plenty of storage space to help keep clutter at bay.


Opt for hardworking materials

Include durable, interior products throughout B2R homes to help minimize maintenance and any ongoing costs. Laminate or tile/faux-wood flooring dominate rental homes7 for their resistance to scratches, moisture and daily wear and tear. In the kitchen, consider lasting materials such as granite countertops and stainless steel kitchen appliances, both of which come with little to no upkeep and provide a sleek look to any kitchen.


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