Real estate is one of the fastest-growing industries in the world. As the population keeps growing steadily, so does the demand for suitable housing. More property developers have emerged to create affordable yet comfortable residential properties.
The meaning of build to rent
“Build to rent” refers to the development of properties solely for rental purposes, not for selling or leasing. The concept of rental properties has been in existence for quite a while, but most people have been learning about it recently. In the past, such properties mainly used to be occupied by multiple families. Now, landowners also develop rental properties for single families. Multifamily properties predominantly constitute at least 50 units.
Why do people prefer rental houses?
In the recent past, the demand for homeownership has gone down drastically. Most people prefer renting houses over purchasing permanent homes. The cost of living has dramatically increased, so buying a home is out of the question for most people. Many millennials have accumulated student loans, and renting houses is the most affordable means of survival. Even older families live in rental properties, real estate developers are seizing this opportunity to invest.
It is easy to get capital for building rental properties. You can get a mortgage or ask your bank to finance you and let them collect an agreed percentage of the property’s income till you complete your debt balance. Also, rental properties don’t require commitment. You have several options if you want out of the real estate business. You can find another residential property investor to sell the property to, or you can sell it to the tenant. Another option is handing it over to a real estate company looking to invest.
The evolution of rental housing
Real estate developers have been concentrating on building multifamily properties in dense cities for a long time. Young professionals have always preferred to live in urban areas close to their workplaces for convenience. Single-family rentals were mainly in the suburbs, and older people who didn’t mind commuting were the main occupants.
The COVID-19 pandemic forced people to work from home, realizing the importance of having comfortable and quality homes. People started relocating from dense cities to suburban areas where living costs are lower and embraced single-family housing. The single-family property market has since increased, and investors are building more properties.
The single-family rentals have low maintenance costs and shared amenities, thus requiring a lower amount of capital. Most tenants who live in single-family houses occupy the houses longer than those in multifamily dwellings. These houses have a higher rentability rate and attract both younger and older tenants with families.
As a rental property owner, your property value increases over the years. You can increase the amount of rent you charge depending on the cost of living and the property’s maintenance costs. You can leave your property management to a trusted company that will take care of how everything will run for a small percentage of the total income and concentrate on other things while still receiving your payment every month.
Build to rent benefit to renters
As a renter, you only deal with one landlord who addresses. Most landlords hand over the property’s management to a lettings agent or housing company, making it easier to address issues. Now rental properties are available in almost every part of the country, so you have the privilege of choice.
Rent charges depend on the geographic location of the property. You can get properties for whatever budget you have, which allows you to live within your means. With the innovative technology reducing property development costs, renting is more affordable. Renting allows for flexibility since you can relocate within short notice, and there are no cumbersome legal procedures to follow before getting a new house.
Now rental property owners are equipping houses with innovative home technology like keyless entry and built-in appliances. Most rentals now come with pools, hangout areas with pool tables and tennis courts, gymnasiums, and playgrounds for kids.
With more rental properties coming up every day, searching for suitable housing is no longer a hassle. You can easily find a house within your budget and convenience.