The build-to-rent sector has been booming steadily in the past years alongside the general demand for market-rate housing. Nowadays, the build-to-rent type of housing has more demand than ever, and many real estate developers and investors are interested in it. But, why the sudden increase in popularity in build-to-rent development?

What is Build-to-Rent?

Build-to-rent is a real estate model in which a developer or investor would build particular properties, have them professionally managed, and rent the various units in the property. These properties provide renters with a great space to live, a community to engage with, and various amenities to take advantage of.

Why the Growing Demand?

Anyone who invests or develops real estate would know that, while the demand for rentals is increasing, homeownership is steadily reducing in the United States. The U.S. Census Bureau released reports in 2021, stating that demand for good rental property is growing, even if there is a recession.

CNBC reported that about 37,000 homes were built to be rented out in 2017, according to the National Association of Home Builders. In 2019, the number increased drastically to be about 43,000.

This is why many investors are using these home shortages and demographic shifts to their advantage, by investing in build-to-rent properties. This led to the increased demand and supply of this type of rental property.

Other factors add to the growing demand for build-to-rent properties, with demographic shifts being one of the major factors. The younger generation is constantly looking for ways to live in a place they can call home, but with high housing prices and student debt, they’re largely turning to rental options that include high quality amenities.

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