A surge in new home development across the U.S. has developers and investors looking to cash in on the trend of “Build for Rent” housing.
Build for Rent
Build for Rent (BFR) housing refers to the development of single-family homes for the purpose of renting the homes, rather than selling. Compared to other parts of the United States, Florida is the perfect place for developers of BFR communities due to its tax friendly status. Neal Communities, ERC Homebuilders, and Toll Brothers are a few of the developers jumping on the trend in Southwest Florida.
According to the Urban Institute, the growth in rental households will surpass that of homeowners by 4 million from 2010 to 2030. BFR communities are likely to impact home sales in the coming years, as well as the multifamily rental market. Based on the current market values, investors are estimating a new single-family home in southwest Florida, would have an average rent of $2,570 per month, projecting a net operating income of $1.26 million per year for the BFR communities.
Single-Family Homes Rentals
The increase in single-family home rentals has been mainly driven by millennial’s that find the cost of buying a home is too great due to unemployment, student debt, and economic uncertainty. Tenants are also wanting to leave crowded apartment buildings since the pandemic hit a few months ago. Studies show that renters tend to stay longer in a single-family home compared to an apartment rental, with an average occupancy length of five to eight years for single family homes.
Experts believe the Build for Rent is a trend that is here to stay, which is great news for investor looking to grow their portfolio. Ryntal Property Management has a team consisting of professionals with many years of experience in property ownership, property management, property maintenance, and real estate to help with all your investment needs.