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Build-to-Rent Homes

Build-to-Rent Homes

What are Build-To-Rent homes?

Build-to-Rent homes are usually single family homes, often built close together in tight, clustered communities, which are meant to be rented to tenants as opposed to lived in by the owner. They usually feature more high end amenities such as gourmet kitchen and luxury bath fixtures compared to apartments, and are able to command a higher rent than a similarly sized apartment. 

Why are Build-to-Rent homes popular?

Investors like them because they typically experience less turnover than apartments and command higher rents resulting in a higher ROI. Tenants like them because they can live in a higher end home without having to worry about maintenance and all the other responsibilities of home ownership. 

Pros and cons

You will likely have an easier time finding quality tenants to rent to and will experience less turnover, leading to less headaches and more profits. You may, however, have a hard time competing against institutional investors who are building hundreds of units at a time.

How to invest in Build-to-Rent homes?

Many of these types of homes are built by institutional investors with deep pockets. They can build dozens at once and take advantage of economies of scale. Individuals building one single home will have a hard time competing against the larger complexes, although it can be done. 

How to make your own home a rental unit?

If you are moving, you may be able to take part in this new investing trend. Of course your old home was not built to rent, but you can rent out your old home just like a Build-To-Rent. Fresh paint, new flooring and maybe some updated fixtures will make your house good as new and ready to command a much higher rent than an apartment. 

Anything else

Want to start investing but don’t want to compete against the big guns? Join ‘em. There are dozens of Real Estate Investment Trusts (REITs) investing in single family homes. They trade on a stock exchange just like a stock and allow non-accredited investors to get into the Build-To-Rent game. 

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