United States
October 25, 2022
PayProp Insights US

How build to rent is taking over single-family rentals

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Build to rent (BTR) communities are popping up across the Sun Belt, especially in Texas, in response to unmet demand for affordable housing.

National single-family BTR housing starts were up 91% in the second quarter of 2022 from the same period in 2021, according to the National Association of Home Builders. Investors are building portfolios of these popular, profitable properties in tax-friendly states (like Texas and Florida) to maximize returns and minimize risk in an uncertain housing market.

Additionally, institutional players have a new strategy for getting approval to develop in areas that are concerned about an excess of renters. Instead of building a new apartment block, they’re building scattered-site housing: single-family units built throughout a neighborhood but run by a centralized organization. 

Scattered-site build to rent communities are close enough together for property managers to visit without too much inconvenience, and disperse incoming renters more evenly across a neighborhood. Units are often also designed with backyards and nicer amenities, which attracts higher income tenants. While the extra drive time can make scattered-site housing tougher to operate, companies can make up for that by using tech to automate back-office admin.

The booming BTR market allows renters the single-family homeowner’s experience without the cost and commitment of homeownership. Mom ‘n' pop property managers can leverage PropTech to improve their cash flow if they choose to engage with this new housing concept.

Other built-to-rent headlines

Why BTR Is Here to Stay – Multi-Housing News

Patel family: It’s like Uber, but for build-to-rent – The Real Deal

Spring to get 'build to rent' gated community, with more planned for other Houston suburbs – Houston Chronicle

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