Have you ever wanted to fix up and sell a home? Perhaps you were inspired by popular real estate investment shows, such as Fixer Upper, Fix or Flop and Rehab Addict. Although investors are inspired to rehab houses by buying, fixing up and selling (or renting), some parts of the country don’t have enough property inventory. This change has spurred an interest in new construction for investment purposes and a concept of “build to rent” (B2R). The popularity of new builds for investment purposes continues to skyrocket.
Build to Rent Explained
Traditional real estate investing involves buying a house from another homeowner and then turning it into a rental property instead of living in the home themselves. Build-to-rent real estate takes rental property investing to the next level by building new homes from the ground-up to rent to tenants. While investments in multi-family homes were common in the past, building single-family homes for investment is a newer concept.
In 2017, 37,000 homes were built as rentals, according to the National Association of Home Builders. That grew to 43,000 in 2018, or just under 5% of total single-family housing new-builds. This number is only homes built and held by builders for rent and doesn’t include homes sold directly to investors. The numbers are likely larger and growing more quickly.
What’s Caused the Boom?
Inventory has dried up in many locations around the country. Any existing inventory is astonishingly expensive, which has shifted investors to build property to rent.
Have Build-to-Rent Questions?
Please contact us if you have questions about loans whether it’s for flipping a property or new construction. We’ve helped plenty of investors with new construction loans, and would be happy to help you as well! Every situation is different, so please reach out with any questions.