It’s the newest, hottest trend in residential development, so new that it does not yet have a standardized abbreviation, talked about by various players as BFR, B2R, or BTR. The dramatic emergence of “built-for-rent” single-family over the past eight years is supported by voracious demand, but the participants in this space will need to pick their strategies skillfully and think increasingly in terms of diversification, niches, and even new methods of production.
The demand for newly-built rental homes is being fueled in part by the wave of millennials who are finally forming families. Many of them are having kids now, which is driving them to want to have a home in the suburbs, with a yard, other kids in the neighborhood, parks nearby, and good schools. Adding to that demand are young singles and empty-nesters who want the convenience that comes with a professionally-managed rental community and who want something bigger than an apartment. When members of these groups lack the savings for a downpayment or simply prefer the freedom that comes with being a renter, they often choose a single-family home for rent.