The past two years have been a wild ride for the real estate industry. The pandemic sparked a remote-working boom, encouraging many big-city apartment dwellers to spurn the luxury high-rise in favor of suburban single-family homes.
Enter the emergence of a new(ish) real estate asset class – build-to-rent (BTR).
A BTR home is part of a large-scale development consisting of single-family homes explicitly built as long-term rentals.
And, if we can believe these numbers, BTR’s popularity could be on the rise. According to the home improvement website Fixr, there was a whopping 106% increase in the amount of single-family build-to-rent homes under construction in the U.S. in 2022, compared to the 36% increase the year previous.
If truth be told, the BTR asset class has been waiting in the weeds for some time. High-profile operators, Toll Brothers, and Lennar made significant investments in the space just a few years ago. Furthermore, according to the National Association of Realtors, 50,000 build-to-rent homes were constructed from September 2019 to September 2020. That’s in contrast to a 40-year average of 31,000 a year.
That said, operators still have time to strike while the iron is hot. What should those looking to take advantage of this trend keep in mind?
Challenges of the Build-to-Rent Model
As with any real estate investment, the BTR model is not all sunshine and rainbows.
The resident experience in BTR housing is different than what one would expect from a traditional multifamily community. The key difference lies in the hands-off approach that BTR communities offer to their residents. While this makes for a more relaxed environment for the resident and the landlord, it can also lead to a few challenges – mainly maintenance.
BTR properties typically have larger units, each with a potentially different layout and unique amenities. This makes maintenance more complex than traditional multifamily properties. BTR properties are often more spread out, making it harder to respond to maintenance requests and perform routine checks.
Another challenge is the increased responsibility placed on renters for basic maintenance. If they are moving from a traditional community, they may not be used to doing basic maintenance, which can lead to problems with the property.
In traditional multifamily communities, landlords typically take care of routine maintenance (changing the air filter or cleaning the gutters), but with the BTR model, renters may need to be more proactive in keeping their units clean and functioning properly. This can be challenging if renters are not motivated to do so. Landlords may need to be more purposeful in their maintenance to ensure the property is well-maintained.
As a BTR property manager, juggling routine maintenance tasks can be a challenge. Leonardo247 is here to assist you. Our Resident Self-service feature enables you to send text and email reminders to residents regarding regularly scheduled maintenance tasks. Residents can also be required to provide photos of the completed task, giving you peace of mind knowing it was done properly. Experience the benefits of Resident Self-service from Leonardo247. Book a demo now!