Our third annual Build-to-Rent (BTR) Strategy Summit included several lessons learned:
High Income Tenants
BTR operators are attracting an even higher income household than previously assumed due to:
- the premium quality of the home materials and design, and
- superior property management services compared to a nonprofessional landlord.
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Standouts from product and amenity trends:
- Work from home (WFH) is driving rental home demand.
- Apartment complex noise is less conducive to working from home.
- BTR designs offer multiple workspaces where a small desk can be placed.
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- Flex the square footage and lot size by location.
- Homeowners will usually pay a higher premium for a larger house than a renter would, so large home and large lot deals favor acquisition by for-sale homebuilders.
- A one-size fits every location model will restrict a company’s ability to grow as consumer demand varies by location
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- 1–2 apartment-like amenities (ex: pool, clubhouse, trail, etc.) is plenty.
- Better parking, privacy and a yard are 3 highly desired amenities. Adding too many other amenities will usually result in diminishing returns.
- On-site maintenance and a community are the 2 most popular amenities.
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- Get ahead on technology.
- Demand for smart home tech is unprecedented; continue to monitor key themes within consumer trends and design. However, be mindful that some smart home technology may become standard features in the near-to-mid-term.
- Plan for future demand for the ability to charge electric vehicles in tenant garages but demand for such equipment is still negligible.
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Resilient and standardized materials
- Design homes to accommodate more moving than usual and select materials to withstand wear and tear to minimize repair and maintenance (R&M) and turnover costs.
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- Built to be resilient examples:
- Laminate faux wood flooring
- Minimal carpet
- Stainless steel appliances
- Granite or quartz countertops
- Built to be resilient examples:
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- Home design examples:
- Standardized appliances
- Wider hallways and staircases for increased furniture traffic as tenants move in and out
- Home design examples:
Our consulting team has been busy across the country helping clients evaluate new BTR communities every day—in markets you would expect and many you might not.
Our research team continues to keep our clients up to date with thoughtful insight on where the market is headed with our housing and economic forecasts on both the for-sale and for-rent markets.
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