Build-to-Rent, Built-for-Rent, BTR, B2R - we’re sure you’ve heard of (or seen) one of these phrases recently, and they all mean the same thing; communities of single-family homes that are built for the sole purpose of renting instead of selling.
This sector of the real estate industry is rapidly growing and becoming exceedingly popular among millennials and baby boomers alike. Why? It offers renters the space of a single-family home but at a much more affordable price tag.
Millennials are growing out of urban city centers and into suburban neighborhoods, while baby boomers want a nice home to retire in and not stress over the worries that come with homeownership. As these renters are now moving away from pricey metros and migrating into suburbs throughout the country, it’s made the perfect backdrop for Build-to-Rent communities.
Builders and investors alike are jumping at the opportunity to be a part of the movement. However, they’re not building these communities just anywhere. They’re searching high and low for the cities that offer the most potential.
Keep scrolling to check out some top cities currently thriving in the Build-to-Rent space:
1. Boise, Idaho
The pandemic may have slowed many things down, but one thing it hasn’t is Boise’s real estate market. This Idaho city leads the country in real estate appreciation over the last year and is the second-fastest-growing metro in the United States. Residents from major cities are flocking to Boise, with its affordable cost of living and rental prices well below the national average. Coupled with a strong job market and low cost to do business, it makes sense that investors and builders are heading to Boise to leap into the Build-to-Rent market.
2. Atlanta, Georgia
The ATL isn’t just known for its hip-hop; it’s also making a name for itself in the Build-to-Rent space. The Atlanta suburbs offer renters a homey feel to settle down in, while also being close enough to an urban metro that supports a strong economy and job growth. With its low cost of living, affordable housing and high retention rates, Atlanta is a haven for investors in the Build-to-Rent space, making it the most growth-oriented city for BTR.
3. Austin, Texas
Between local job opportunities at some of the biggest tech companies, the University of Texas right in town and the weird Austin vibe, it’s no wonder that many are making roots in the city. The Texas capital is steadily growing in population and attracting many millennials in the process. As Austin's median age is just 31 years old, this is the perfect scenario for investors who want to dive into Build-to-Rent as millennials are looking for a single-family home without committing to a mortgage.
4. Phoenix, Arizona
There must be something about the desert heat that’s attracting so many out-of-staters to Phoenix. Whether it’s the year-long sunshine or the affordable real estate compared to other metros, Phoenix is currently attracting more new residents than ever. And despite an increase of 5% in rental prices since last year, Build-to-Rent communities are experiencing leasing cycles that are 5x faster than their multifamily counterparts. So when it comes to the Build-to-Rent market, this city is definitely heating up.
5. Jacksonville, Florida
Rounding out the list is one of the sunshine state’s northernmost cities - Jacksonville, Fl, or Jax, as locals like to call it. This beachfront city is offering renters a quaint, suburban lifestyle amidst one of the fastest-growing markets in the southeast. It’s even earned a spot as Forbes’s 22nd Best Places for Business and Careers, and the city even saw an 8% increase in rent prices over last year. With an influx of millennials looking to make it their home and high retention rates, it’s no surprise that builders and investors want to build more Build-to-Rent communities in this coastal city.
Thriving in the Build-to-Rent Sector
These cities are just a few that are seeing a surge in Build-to-Rent development within their communities. According to the National Association of Home Builders, there was nearly a 30% increase in Build-to-Rent single-family homes from 2019 to 2020. This means Build-to-Rent single-family homes are popping up throughout the nation and builders will need the right tech in place to stay competitive.
Tech-savvy millennials are looking for homes fitted with smart home technology that offers them convenience and the amenities they had in a multifamily setting. With the influx of renters looking for these exact types of properties, builders will also need a competitive strategy for leasing agents. Taking a page out of the multifamily playbook, builders can harness the power of self-guided tours to help their leasing agents manage prospects. These give prospective renters the autonomy to tour rental properties on their own time and then engage with a leasing agent after.
Smart home technology is key in creating not only happy renters but happy site staff, too. It also saves you time, money and headaches along the way. SmartRent’s leading the way in home automation for Build-to-Rent communities, contact us today for a customized quote.