Advantages of Build-to-Rent Investment Properties


The real estate sector offers multiple options for investors to put their money in and get returns. Even though the real estate market was down, the built and rented properties in the sector were on a significant rise given the need for housing increases in the major markets, and now it is in more demand than ever. Instead of opting for single-family homes, the independent owners are currently building an entire home community. Check out the guide to understand better the made-to-rent CRE property.

Build-to-rent property- what is it?

It is the type of real estate investment wherein the investors purchase many rooms in a lot in the same neighborhood to rent them out and have a professional manage them. In contrast to traditional single-family rentals, which usually are owner-occupied and have to go through foreclosure before being rented or sold, the build-to-rent properties provide the renters great convenience and unique construction home. Also, they offer better space. No doubt single-family homes are always in demand, but built-in properties are getting popular because they can be rented without mortgage requirements.

The build-to-rent investment properties are pretty on a large scale. It is a hybrid variety of multi-family and single-family CRE investments as they are properly built for renting. The communities are gated with complete amenities and professional management.

With the waver of foreclosures, investors are looking for more and more opportunities in build-to-rent properties as it offers excellent private space and a new construction experience for the people. Moreover, given the temporary unavailability of homes due to a great pandemic, affordable housing has become quite common among Americans who were previously secured enough to take a mortgage.

Undoubtedly, there are multiple benefits one can get with the build-to-rent property. It assists the investors and the ones who are renting the property. The details of which have been covered as the advantages ahead. Make sure you check it out.

Advantages of build-to-rent properties

Given the demand for such properties, more and more investors are going into the real estate industry and choosing this option as it provides great convenience and a better chance of a steady income source. Besides, there are reasons why it is a highly profitable option.

1.         Lower maintenance

The best thing about build-to-rental properties is that they are newly constructed homes which means there won’t be any requirement for the maintenance cost, which will help improve the cash flow. Besides, they also come with a high-end rental property management service, which helps keep up with the property. They have an on-call service that can guarantee the investors do not have to lose money for the property management.

2.         Strong demand for construction

Since the pandemic, people have been moving out of the big cities to look for properties in the secondary market, like single-family rental homes. This is why the builders continue to keep up with the demand at an increasing rate and invest inbuilt to rent properties across the country. Thus it would provide excellent results in the future.

3.         Compare Rent ratios

Owing build-to-rent properties are a lot more affordable. There is a storage of low maintenance and vacancy rate with such property due to the non-extreme conditions. Thus they have good rent ratios and highly competitive cost points.

4.         Highest risk-adjusted returns

Residential real estate has always been considered a stable investment that can help generate great results. Investment in build-to-rent properties will help streamline the maximum efficiency and guarantee lower vacancy. The investors use the strategies that can create a balanced portfolio and file everything to avoid the risks that come. Thus the assurance of having a portfolio with these strategies allows the investors to capitalize in each market segment and benefit from the portfolio associated with maintenance, vacancy, liquidity, and market valuation.

5.         Strong home appreciation

In the current scenario, the lack of inventory is enough for the investors to become homebuyers. No doubt the demand for the home had significantly increased in 2020, but still, the market seems to be very affordable. It was reported that the market remains undervalued irrespective of the prices and continues to be an excellent environment for real estate investing.

6.         Better tenants

The property management company has a rigorous screening process to ensure they find tenants who can reside without any trouble and guarantee timely rent payment. The firm takes all the measures to find great tenants and get a good rental agreement. They explain what the homeowners will cover the maintenance services and what one can expect from tenants. With their professional help, the investors need not worry about any damage or enforcement of any rental payments as everything is handled well.

7.         Strategic location

There is an excellent urge for constructing residential investment properties in strategically located neighborhoods. The property investors want to increase the portfolio by building and developing in lower property tax states that provide better ROI. In addition, it reduces any chance of possible loss.

8.         Builders warranty

The newly constructed home ensures that the workmanship and the cover materials like normal deterioration, damage, etc., for 1 to 2 years are taken care of. It will all come under the warranties to help prevent any extra payment.

9.         Better rental

As per the report released in 2021, it was found that the rental price has been growing high ever since 2017. The results show that the prices are now 10.3% higher than the last year, which has increased from 9.4 % in March 2020. This means that the National level rental has increased by 11.4 %. This is a significant jump compared to the previous years. However, this provides investors assurance that their rental property will bring in high income, and they need not worry about the investments. They can stay assured of enjoying great returns on the money they have put in the properties.

10.       Less tenant turnover

A great thing about build-to-rent properties is that there will be the lowest vacancy levels possible. This is because of the exceptional property upkeep and the services available to handle any emergency. It is found that at a minimum, the occupancy rate will be about 95.8 percent. Not to mention this type of property comes with a significant 74% lease renewal rate. This helps create higher returns for the owners of the rental properties.

Undoubtedly build-to-rent properties are an excellent opportunity for real estate investors to earn income and enjoy their investment. But having a clear idea about the investment is essential. For instance, what is the right place for investment or finding tenants or a good property management company? When you have professional support from a good company, that is there to handle everything, then as an investor, you need not have to worry. The experts will take things and guarantee you have a continuous flow of income. But for this, you need to research and identify a company with expertise and experience handling such properties and bringing forward excellent outcomes. Besides, you must also see that the expert does not charge a high price for their services, or else the majority of the rental income will go into paying the expert.

Why build-to-rent property?

Real estate investors have now understood the demand for good rental properties is increasing across the market in the US. It was reported that people are now willing to move across the country. Thus, rental vacancy rates decline even during the middle of the current recession. This is why the US investors are developing and using the opportunity created by the housing shortage to fill the growing demand using single-family homes. The growth rate during the year 2017 was quite impressive because it included the homes that builders sold directly to the investors as a rental properties. No doubt they are worth investing given the number of benefits one can expect to get and the returns that will come. But taking measures at the right time is essential. Understanding when to make the investment and where will guarantee proper outcomes.


So with the given information, you must now be well aware of build-to-rent properties and how they can be advantageous. However, it is not easy to handle such properties. Undoubtedly taking professional assistance is highly important to manage the properties well and make the most of the investment. So contacting a professional company like Private Capital Investors will help you the best. They will help you identify the right property management companies and other aspects of their investment. They have experienced professionals to understand the requirement and develop a customized strategy that will work great. To schedule an appointment with the expert, you will surely get satisfactory results.

Want to learn more? Get in touch with us today.

Similar Blog

How Land Loan Refinance Transforms Investors’ Futures

How Land Loan Refinance Transforms Investors’ Futures

Land loan refinance can unlock significant savings on your future payments. At Private Capital Investors, we can help you explore this loan option. Depending on your loan details and creditworthiness, refinancing could allow you to pay off your loan faster and...

How to Qualify for an Agricultural Loan

How to Qualify for an Agricultural Loan

Farming can be a costly business. From buying new land and equipment to building and maintaining facilities, it involves many repairs and replacements (usually unexpected) that can quickly strain a farmer's budget. Many farmers rely on ag financing to cover ongoing...

Want to learn more? Get in touch with us today.

Our experienced team is ready to assist with your financing needs.

2101 Cedar Springs Road Suite 1050 Dallas, TX 75201