According to a recent survey of 3,300 renters on RentCafé [1], as many as 78% said they were interested in living in a community of single-family homes. The survey confirmed the rising interest in single-family rentals that began to take shape last year, where searches for “homes for rent” tripled in 2021 compared to the previous year.
For renters looking for lifestyle changes offering more space and privacy, single-family communities and houses built for the purpose of renting have become a more popular trend in housing. While 2021 was a record year for single-family rental home construction, with 6,740 new built-to-rent homes already completed. The trend is growing rapidly, as twice as many homes are now under construction for an average total of 14,000 set to open their doors to renters this year.
Described by some experts as “horizontal apartments,” communities of houses built for the sole purpose of renting are becoming an increasing topic in residential living. Although proliferated in the aftermath of the 2008 housing crisis, the pandemic created an unprecedented demand among renters for space and privacy, unlike apartments.
The built-to-rent trend combines the financial and leasing flexibility of a rental with the amenities and convenience of a professionally managed property, all while living a single-family home lifestyle. As a result, everyone is interested, according to Shannon Hersker with Walker & Dunlop [2]: “There is a misconception that the majority of renters are Millennials when, in reality, you have everyone including college students, empty nesters, families with kids, pet owners, and those wanting to downsize,” Hersker said.
Because consumers need large lots of land to build on, rental home communities are prevalent in low-density areas, with the 61% located in suburbs. “Undoubtedly, coronavirus has also impacted upon this increased popularity,” said Christopher Michael, Architect and Founder of Archisoup [3]. “Many are now moving out of the cities and apartment living to seek out more space in rural and suburban locations.”
This aligns with our renter survey, which also revealed that besides the main reasons for choosing a single-family rental over an apartment — more space and privacy, these types of rental homes are also attractive for families. More precisely, 19% of respondents believe a single-family rental is more suitable for their family, especially if the community is located in a quiet, family-friendly area in the suburbs.
Mapping the top 100 locations with the most built-to-rent houses reveals that 39% of these communities are located in urban areas, particularly in geographical regions where land availability allows. While they’re more likely to be found in urban settings in the Southwest, they tend to be more present in suburban areas in the Midwest and Northeast.
The top metros for built-to-rent houses are:
- Phoenix, AZ
- Tucson, AZ
- Columbus, OH
- Dallas, TX
- Houston, TX
- Las Vegas, NV
The largest built-to-rent communities in the U.S. are:
- Buffalo Highlands, Las Vegas, NV, 819
- Buffalo Highland, Las Vegas, NV, 819
- Homecoming at the Preserve, Chino, CA, 805
- Rosemont Brookhaven, Bellport, NY, 795
- Antelope Ridge, Box Elder, SD, 780
- Homecoming at Eastvale, Eastvale, CA, 738
- Castlewood/Castle Gardens, Atwater, CA, 680
- Treviso Gardens, Katy, TX, 644
- Arbors at Antelope, Antelope, CA, 540
- 83 West Townhomes, West Bloomfield, MI, 504
Single-family rentals are filling up fast, with the occupancy rate in 2021 is 2% higher than apartments— 97% compared to 95%. Increased housing demand has led to increasingly larger communities, resulting in mega-projects that look like whole neighborhoods. The average built-to-rent community has about 125 single-family rentals, while some mega-communities can have up to 500 houses and others can be as large as 800 homes.