What are Build-to-Rent Homes?

by Marisa Upson | Published: Jan 21, 2024

Home prices remain stubbornly high. Inventory levels are historically low. And home ownership remains out of reach for many would-be home buyers. Bankrate reports that inventory stood at a 3.5-month supply as of November 2023. High mortgage rates haven't helped, being a major contributor to plummeting mortgage applications.

The current environment results in prospective buyers opting for rentals. And that demand has led to build-to-rent homes, a burgeoning force in the housing landscape.

What are build-to-rent homes?

Build-to-rent homes are an innovative approach to housing. These single-family residences are built for the sole purpose of renting. Often, these homes are part of rental home communities.

Some are indistinguishable from conventional built-to-own neighborhoods. Others are more compact. Typically, they are free-standing homes. In all build-to-rent homes, no one lives above or below you.

You'll also find some unique architectural styles.

  • Small lot homes built in close proximity
  • Row homes that share a common wall
  • Duplexes with two units attached to each other
  • Large complexes with freestanding horizontal homes, like garden-style apartments
  • Small cottages with one bedroom and one bathroom

While some landlords oversee these properties, they are often managed by a professional company.

Why are build-to-rent homes all the rage?

In 2022, the construction of build-to-rent homes hit a 10-year high, according to City Monitor. These homes and communities started trending right before the pandemic. Then, the unexpected upheaval ramped up the demand even further.

People began working from home and leaving densely packed urban centers. They were drawn to the space and greenery these homes provided. Even today, you'll find a large percentage of build-to-rent homes in the suburbs.

These communities are an attractive alternative to those priced out of homeownership. According to Redfin, 2023 was the least affordable year on record for those wanting to buy a home.

Millennials are the primary group driving up the demand for build-to-rent homes. They appreciate the flexibility and reduced financial commitment. Modern amenities, community-focus and family-friendly developments also appeal to this generation.

Where is the greatest market for build-to-rent homes?

The National Rental Home Council (NRHC) and Yardi Matrix started tracking build-to-rent housing activity. The first quarter of 2023 saw 45,567 build-to-rent units under construction and 66,134 planned.

Texas topped the charts with the most units planned and in the building phase, nearing 25,000. Arizona, Florida and North Carolina followed, though all less than 15,000.

What is the impact of build-to-rent homes on tenants?

Build-to-rent communities offer the privacy and space of single-family homes. Then, they add the benefit of community amenities.

Rent. noted several benefits associated with living in these homes. Some advantages include communal areas, more indoor and outdoor space and excellent amenities.

Modern appliances and design

Build-to-rent homes may feature contemporary design and incorporate sustainable practices. You may even find homes with smart devices, such as smart thermostats and doorbells. Newer units incorporate stainless steel appliances, quartz countertops and high-quality faux wood floors.

More privacy and living space

One of the greatest benefits is privacy. Many of these homes offer private backyards. For those with pets, this one benefit can tip the scale from apartment living to build-to-rent communities. Because of the popularity among pet owners, some even include doggie doors.

Typically, you won't share a wall with your neighbor. You definitely won't have someone living over or under you. This separation offers greater privacy and reduced noise.

Easy parking

Renters are also prioritizing a place for their cars. Build-to-rent units usually have a garage or a designated space very near the home.


Homeownership comes with a long-term financial commitment. Residents in built-to-rent communities enjoy the flexibility and freedom of a lease. They're not encumbered by high property taxes, HOA fees or ongoing maintenance costs.

In fact, the landlord or property management company covers most maintenance costs. They may also incorporate mowing and plowing services.

Community and amenities

Many of these communities offer similar amenities you find in apartments. These amenities may include swimming pools, kids' playgrounds, fitness centers and barbecue areas.

Others have tennis or growing-in-popularity pickleball courts. Some of the trending features include co-working areas, dog parks and nature trails. These spaces provide opportunities to connect with neighbors and foster social interaction.

New homes

Build-to-rent homes are often newer. According to CBRE, one-quarter of these homes have been built in the last three years. Within this niche, you can find entry-level homes and luxury accommodations.

Exploring a neighborhood

These homes offer a great opportunity to get to know a neighborhood. Many people opt to rent before making a financial commitment like buying a home.

Tip for renters: Make sure the community offers the amenities that you value.

What is the impact of build-to-rent homes on landlords?

Landlords experience several benefits associated with these types of rentals. Reduced turnover rates and a sustainable investment strategy are just a few.

Residents stay longer

The National Apartment Association reports that residents tend to stay longer. The executive vice president of Walton Global, Paul Megler, said most tenants in their communities stay two to three years. This reduced turnover rate saves time and money.

They take better care of your property

Long-term residents tend to think of single-family rentals as their home. In response, they also tend to take better care of your property.

A sustainable investment strategy

Renting a home in a community with a range of amenities appeals to many families. Because of this, these rentals can offer long-term, sustainable income streams. Of course, profitability can never be assured. However, build-to-rent single-family dwellings continue to increase in popularity.

Tip for property owners: As with any rental, do your market research. This research includes rental demand and rates. Also, consider vacancy rates and the local economy and competition.

A significant shift in housing

Build-to-rent homes have introduced a new model that's reshaping rental properties and investment strategies. This significant shift offers benefits to both landlords and tenants who are realizing the true potential of build-to-rent homes.

Categories: Featured, Landlords, Renters

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