We see a trend and a new way of real estate investing in the Orlando and Central Florida Market. Rental property owners and investors seek rental housing that will continue to shape and form a new way of investing in rental properties. This unique rental housing trend is called Build-To-Rent, and it may be the future of rental properties in Orlando, Florida. Here at The Listing Real Estate Management, we are a professional property management company and have seen increasing demand and inquiries for build-to-rent communities or opportunities from real estate investors. The future of Build-To-Rent rental properties is here, and we love this concept in Orlando & Central Florida.
What Is Build-To-Rent?
Build-to-rent housing and investment strategy are combining the two concrete real estate investing strategies; single-family and multi-family. The two real estate concepts earn the opportunity to be mashed into one. The new trend is proficient in allowing a property owner to have multiple units at one location. Build-to-rent single-family homes entail a partnership between builders, developers, investors, and property management to build single-family rentals in one spot on a large scale.
Courtesy of Transcendent Investment Management
Why Build-To-Rent in Orlando Florida?
The demand for rental homes in Orlando and Central Florida is exceptionally high. The Orlando rental market is HOT, and build-to-rent is in style. What are the underlying factors making build-to-rent homes such a slam dunk?
- Enormous amounts of renter populations are moving to Florida and flocking to areas such as Orlando, Winter Park, Lake Nona, Windermere, Winter Garden, Lake Mary, and Kissimmee.
Renters are escaping the apartment or multi-family housing. The Pandemic has pushed apartment renters to the suburb and single-family housing. Single-family homes allow renters to have their own space, an office to work from home, and the community at their doorstep.
Courtesy of Transcendent Investment Management ~ Cantabria In Bradenton Florida
All real estate and rental markets are not created equal. Orlando is one of the best places to buy a rental property. With Covid, the Orlando and Central Florida market will weather the storm and come out ahead. There are real estate markets that have taken a deep dive. As stated from The Real Estate Guys, “The thing is… people and money and business don’t just go away. They do, however, move around. The key is to see where they are going. When you can see that, you see that there will be an opportunity on the opposite side of a problem. Central Florida is cheap, cheerful, and affordable.
- According to Florida Realtors, Build-to-rent single-family homes tend to be what would appeal to first-time home buyers. Younger generations are also appealing to renting single-family homes. As remote working becomes more popular, city life and commute to work become less prevalent.
Why Orlando Real Estate Investors Like BTR?
The Build-To-Rent concept has been tested and proved to be a viable technique for real estate investors in the Central Florida area. According to CrowdStreet, “The Build-To-Rent market has a unique ability to achieve Market Rate Premiums over competing Class A Multi-family assets. This is an excellent opportunity to build a single-family asset that amounts to well above average Orlando rental rates.
As an Orlando property management company, we see many tenants seeking single-family homes. When it comes to rental properties in the $1,350-$1,750/mth rental rates, it is a hotbed for filling a vacant rental property fast.
According to Gregg Logan with RCLCO Real Estate Advisors, “Approximately 6% of new single-family homes are purpose-built for-rent, which would result in approximately 700,000 new units over the next ten years.” There is a low inventory of rental units in the Orlando area, and large institutional investors have their eyes on the Central Florida market.
- For Example, Tricon American Homes and American Homes 4 Rent have shifted to the build-to-rent concept. They are purchasing lots (located in master-planned communities), partnering with local area builders, and developing the property specifically for renting.
Source: Screenshot of Tricon Homes Webpage
Rental property owners can charge higher rental rates than a similar apartment/multi-family units.
Hedge funds have their eye on the Central Florida market because of cheap plots of undeveloped land and less expensive real estate acquisition costs versus other real estate markets.
According to Hunter Housing Economics Discussions with Brent Landry, SVP of AH4R, American Homes 4 Rent’s typical renter is in their late 30s, 1.8 adults, one child, and one pet a household income of $100,000/year. Most tenants stay for three years, and their built-for-rent homes are typically 3,4 and 5 bedroom homes ranging from 1,600sqft-2,600sqft.
The data shows that the build-to-rent housing model attracts high-quality tenants with excellent income and stay for years.
Courtesy of Hunter Housing Economics Discussions with Brent Landry, SVP of AH4R
Build To Rent & Orlando Property Management
If the big players in rental property investing target the Build-To-Rent segment, it may be worth taking a look at here in the Greater Orlando area. We love the concept, and investors can start with one new construction home and instantly rent it out to high-quality tenants, paying top dollar.
Real estate investors looking to plant a substantial investment into the Orlando and Central Florida market may have property management being the last thing to consider. Although, having an established guide from the start will make things much more manageable. As the top Orlando property managers, we help homeowners and investors buy rental properties in Orlando and rent their real estate assets. Build-to-rent communities will need to 1. Attract New Renters and 2. Make Sense Financially, and we can help determine this information.
Do you have any questions left unanswered? If so, reach out to us here at The Listing Real Estate Management. Get in touch with us here.