Build-to-Rent

Build-to-Rent Lessons Learned: Better Understanding of Demographic, Product, and Amenity Trends

Headshot Final__Don Walker
Danielle_Nguyen_web

Don Walker

Danielle Nguyen

August 31, 2022

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.

 

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.
 
  • 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
 
  • 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.
 
  • 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.
 

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.
 
    • Built to be resilient examples:
      • Laminate faux wood flooring
      • Minimal carpet
      • Stainless steel appliances
      • Granite or quartz countertops
 
    • Home design examples:
      • Standardized appliances
      • Wider hallways and staircases for increased furniture traffic as tenants move in and out

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.

If you have any questions, please fill out this form. You can also learn more about our Single-Family Rental Research Subscription Package by clicking here.

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Tags Build-to-Rent

About The Author

Don Walker
Managing Principal
Don has 30+ years of experience in real estate finance and operations, including running a Top 40 homebuilder, and uses this experience to help clients make informed, strategic investment decisions in real estate. Don is passionate about build-to-rent, product and community planning, builder/developer M&A, and property and company valuations.
Danielle Nguyen
Vice President, Research
Danielle manages, implements, and analyzes the housing market with a specific focus on for-sale and for-rent research. She is a research content creator who produces high-quality, insightful, and forward-looking housing research and a trusted resource (connector) for clients and those interested in JBREC’s research.

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