Tight Rental Market
Rental markets across the United States are extremely tight, with vacancy rates at decades-long lows.[i] The graph[ii] below from Statista shows the decline in the number of unoccupied rental housing units in the United States from 2012 to Q3 2020 (in millions):
The ramifications of the shortage of available rental units are being felt not only among low-income populations, but also among those with middle incomes.
Homeownership rates have been falling since 2008.[iii] These days, even those with high incomes are renting rather than buying more often than in the past. For some, it’s by necessity — they live in an expensive area and, despite their high income, they still struggle to afford the down payment on a home that has the features they want (size, location, amenities etc.). For others, it’s by choice — they’re choosing what they perceive as the flexibility of renting over the responsibility of owning a home.
According to the Joint Center for Housing Studies of Harvard University, between 2010 and 2018, the greatest increase in renting was for households earning $75,000 or more:[iv]
Single Family Build-to-Rent is Growing
Perhaps as an effect of higher-income residents looking to rent rather than buy, in recent years there’s been an increase in the number of single-family build-to-rent homes being constructed.
According to housing economist, Brad Hunter, the pandemic increased the demand for more living space, which in turn has increased the demand for single family home rentals. It’s easier to physically distance from your neighbors if you live in a single-family home than if you live in an apartment and need to share an elevator. Some people have wanted to avoid mass transit in dense cities, which has encouraged them to move to the suburbs. Finally, homeschooling kids and working from home have also increased the demand for living space.[v]
The Housing Innovation Alliance says:“Single Family Build-to-Rent has emerged as a hot new asset class and captured the attention of investors and builders alike.”[vi]
For more information about the build-to-rent phenomenon, take a look at these articles:Understanding Build-To-Rent Part 1, Part 2, and Part 3.
Why Build-to-Rent is the Hottest Thing in HomebuildingBuilt-for-Rent Single Family: the Strongest Niche in Real EstateWhat Should Build-to-Rent Communities Look Like?What You Need to Know About ‘Build to Rent’: A Break-Through in Rental HousingWhy is the Demand for Build-to-Rent Homes Growing?What is Build-to-Rent, and How Can You Invest?
Over the past decade, construction of single-family homes intended for the rental market has steadily increased. According to the Joint Center for Housing Studies of Harvard University, from a low in 2009 at 14,000 units started, there were 49,000 units started in 2020. (The previous high was 47,000 in 2003.) This is still a very small portion of total housing construction — under 4% — but growing.[vii]
Quality Inspection Services for Build-to-Rent Developers
You may already be familiar with ProHome’s warranty management services for homeowners and homebuilders who sell their completed houses. However, you may not be aware that we also provide Quality Inspection services (Developer Walkthroughs) for developers who opt for the build-to-rent model — whether for multi-family or single-family developments.
Our New Home Agents do an initial walkthrough of each new unit to create the punch list. We then provide that list to the GC for repairs to be addressed and completed.
Once the GC notifies ProHome that all the punch list items have been rectified, we perform a second walkthrough to verify that. We take care of documenting everything so you, the developer, don’t have to think about it.
As a developer, if you choose to work with ProHome, you’ll be assigned a dedicated account manager on our team who is familiar with your business and your developments. You won’t have to repeat yourself to someone new every time you call.
Our New Home Agents are trained to inspect homes for items that your GC needs to fix. This means that you neither have to hire someone new nor train one of your current staff to perform Quality Inspections. This is especially important if you build developments in a number of different markets. Sending your own staff to different areas to do Quality Inspections is a costly hassle. You can move onto your next project, knowing that the last little details on your newly completed development are being taken care of.
After tenants have moved in, we work alongside the property management company to answer tenant phone calls and address claim questions the tenants might have.
If you’d like to learn more about our Quality Inspection services for build-to-rent developers, please contact Matt at (316) 706-0368 or firstname.lastname@example.org today.
If you know a developer who might find this information helpful, please share it with them. https://www.jchs.harvard.edu/americas-rental-housing-2020https://www.statista.com/statistics/187569/housing-units-for-rent-in-the-us-since-1975/http://www.housinginnovationalliance.com/whats-new/articles/view/understanding-build-to-rent-part-ihttps://www.jchs.harvard.edu/across-country-most-growth-renters-high-income-householdshttps://www.forbes.com/sites/bradhunter/2020/10/07/a-developing-business-thinking-about-the-next-wave-of-built-for-rent-housing/?sh=2781d4ca4406http://www.housinginnovationalliance.com/whats-new/articles/view/understanding-build-to-rent-part-iiihttps://www.jchs.harvard.edu/blog/young-families-and-growing-number-new-single-family-rentals