Thinking about renting a built to rent home? Here’s what you need to know.
There’s a new trend in housing construction that’s becoming more popular: build-to-rent single-family (BTRSF) homes. These properties are constructed as long-term rentals and can be owned by individual landlords or managed by companies.
More than 40 percent of renters live in single-family homes, but will there be demand for this new type of rental property, and what are renters expecting in their living accommodations? Fixr.com recently conducted a survey of industry experts to get to the bottom of this trend. Here are some of the highlights.
Couples with kids lead the BTRSF tenant market
Forty-four percent of the experts interviewed agreed that couples with children are most likely to choose a BTRSF home. This makes a lot of sense because in most cases, a single-family home will have more space (inside and out) and privacy than a condo or other multi-family building.
For the 60 percent of Americans that cannot afford the median cost of a single-family home, renting is a more realistic option. Brad Hunter, President of Hunter Housing Economics, agrees, but also clarifies that there are some renters who rent due to personal preference. According to Hunter, there are two groups: those that cannot afford a home and those who choose to rent above homeownership. Regardless of the reason for someone choosing to rent, having alternative access to single-family homes is appealing to many.
Material prices could affect renters
Since the majority of BTRSF homes are wood-framed, the record-high lumber prices that have been plaguing the country over the past year have strong potential to impact future BTRSF home prices.
There is some optimism on the horizon as lumber prices have begun a slow retreat from previous highs. However, this concern is also shared about other building materials.
An open floor plan is the most popular layout
Open floor plans have been the most popular choice by buyers and renters alike in recent years so it is not unexpected that an overwhelming majority of experts (87 percent) feel the BTRSF homes will incorporate an open floor plan into their design moving forward.
An added bonus for renters is that open floor plans often allow more options when it comes to furniture. This enables renters to design the home’s interior for their own needs with furniture placement (vs. structural changes) as there are often more restrictions in making physical changes to a home for renters than an owner may encounter.
Finally, since BTRSF homes are often slightly smaller structures installed on lesser sized lots, an open floor plan creating an illusion of more space.
Outdoor spaces and recreational areas are the most wanted amenities
Many BTRSF homes exist in a community setting; therefore, the experts asked not only what they thought would be most desired for the renter’s private space but also for the shared community space. The top three responses were balconies/decks/patios (37 percent), parks/recreation areas (37 percent) and landscaping/green space (31 percent).
These selections make perfect sense as the events of the last year have changed how many people want to spend their leisure time. By providing outdoor amenities, renters are likely to find something that fits their own needs in their home and community.
The pandemic’s influence on BTRSF homes is still unknown
The data supports this with the third quarter of 2020 boasting a 27 percent increase in single-family build-to-rent starts. However, there was a decline of 22 percent in the first quarter of 2021. This is likely why the majority of experts (53 percent) answered “Not Sure” when asked whether or not the pandemic has influenced BTRSF homes.
Keeping a close watch on future changes and conditions, especially those pertaining to materials and housing prices as well as labor shortages, will help determine whether or not the pandemic has had a big impact.
Understanding the build-to-rent single-family homes industry
The past year has driven many renters in smaller spaces to look for larger, more private, locations to call home.
Many of these homes are constructed in build-to-rent communities with shared outdoor amenities for enjoyment; however, renters are also looking for their own personal patch of the outdoors. Decks, balconies and patios are helping them to enjoy their increased time at home.
It is still too soon to know the long-term effects of the pandemic on the industry, but time will help to better understand those impacts.
Source: rent.com