If you’ve been in the real estate industry over the past few years, you no doubt noticed an uptick in conversation surrounding BTRs. You’ve also likely seen your fair share of investing fads and aren’t too phased by the so-called “next big thing.”

But BTRs are different. We’ll tell you why…and if you should consider adding them to your portfolio!

What are BTRs, Anyway?

Build-to-rent (BTR) properties are purpose-built single-family homes or townhouses explicitly designed to be rented rather than sold to individual homeowners.

Advantages of Investing in BTRs

Strong Rental Demand

The demand for single-family rentals (SFRs) is growing, especially among millennials and Gen Z renters who want the benefits of a home (space, privacy, yards) without the hassle and commitment of ownership. BTRs offer that “new house” excitement without the same financial barriers and obligations.

Lower Maintenance & Operating Costs

Since BTR communities are newly built, they require less maintenance than older rental properties. Developers use modern, durable materials to minimize repair costs and optimize energy efficiency. Standardized designs throughout the community make repairs, maintenance, and property management more efficient – incentivizing investors to hold multiple properties within a BTR community.

Easier Management & Scalability

BTR communities are typically owned by a single entity or investor group, making property management easier compared to scattered single-family rentals. For example, an REI Nation BTR community would be handled by our Premier Property Management. So, as investors buy from us, they benefit from the existing systems. That makes it all much easier to manage and scale!

Higher Retention & Stability

BTR properties attract long-term residents, such as families and young professionals, who prefer stability. They’re also more likely to treat the home as their own, reducing vacancy and turnover costs. And unlike apartment renters, BTR residents often stay longer due to the added space and suburban lifestyle.

Consistent & Predictable Cash Flow

BTR investments provide stable rental income with less variability than other asset classes. Since these properties are literally designed for renting, investors can better predict occupancy rates and rental yields.

Further Reading: Why the Build-to-Rent Model is Here to Stay

Who Should Invest in BTRs?

#1 – First-Time Real Estate Investors

Our first bit of advice for any first-time real estate investor is to leverage experience that helps you avoid costly mistakes. Being new to something is challenging. It’s even tougher when it comes with significant financial stakes. First-time investors have much to gain from BTRs simply because they:

• Will encounter fewer maintenance and repair issues from the outset.
• Benefit from an established property management team.
• Know exactly what they can expect from each property in a BTR community.

There are just fewer surprises. BTRs mitigate many of the variables that can make rental property investment risky.

#2 – Passive Real Estate Investors

BTRs aren’t just for green investors looking to get started. They’re also for investors who don’t want investing to turn into their full-time job. Most investors have careers or ambitions demanding time, attention, and passion. But still, they want to establish passive income and build wealth.

BTRs are a great way to accomplish this goal because investors don’t need to deal with leasing, maintenance, or property management. This is turnkey investing with that extra “oomph” from new construction.

On top of that, buying without the same community streamlines the transaction and research elements. Even your responsibilities as a passive investor become easier!

#3 – Remote Real Estate Investors

Finally, remote real estate investors stand to gain the most from the rise of BTR communities. Sometimes your local market just isn’t suited to building a strong investment portfolio. The demand may not be there, or prices may be too high to justify. Remote investors look afield to invest instead – often making acquisitions in faraway states. Remote investing without a known and trusted team supporting you is incredibly risky.

You can’t invest remotely without strong partners – especially property managers. BTRs solve the different facets of this issue in one fell swoop. The current owners of the BTR community? They’re investing in it. They believe in the model and then sell their properties to other investors for mutual benefit.

They have management in place. They know their markets. Remote investors can leverage all that to benefit, even a world away.

Ready to purchase your next investment property? Tap the button below to connect with one of our experienced Portfolio Advisors.