The Build to Rent Phenomenon
The build-to-rent phenomenon has triggered a seismic shift in the real estate industry over the past few years. As the clamor for rental properties has reached fever pitch, developers have taken to constructing entire communities of rental homes in a bid to meet the soaring demand.
According to a recent report by the National Association of Home Builders, the build-to-rent market has skyrocketed from fewer than 100,000 units in 2012 to a staggering 600,000-plus units in 2020. This represents a major upheaval in the real estate industry as developers pivot away from the traditional homebuilding model to concentrate on building rental communities.
The dominant players in the build-to-rent market comprise a mix of traditional homebuilders, real estate investment trusts (REITs), and private equity firms. The likes of Invitation Homes, American Homes 4 Rent, and Blackstone Group are among the industry heavyweights.
These firms have adopted varied growth strategies, with some focusing on developing communities in specific regions or markets while others have opted for a nationwide approach. For instance, American Homes 4 Rent has erected over 53,000 rental homes across 22 states, while Invitation Homes boasts over 80,000 homes in 16 markets.
Despite the challenges posed by the COVID-19 pandemic, the build-to-rent market has continued to grow apace. A recent report by CBRE revealed that the sector witnessed record levels of investment in 2020, with over $7.7 billion plowed into it in the first nine months of the year alone.
Rents in the build-to-rent market have also remained steadfast, with numerous developers reporting high occupancy rates and robust rental income. In fact, according to a survey by the National Multifamily Housing Council, 80% of build-to-rent developers recorded an increase in rental income in 2020, despite the pandemic.
What’s more, the build-to-rent market has proven to be a highly lucrative investment for many companies. A report by Green Street Advisors indicated that the sector has outperformed other commercial real estate types, with returns averaging roughly 8%.
As the build-to-rent market continues to surge, companies are ramping up their hiring efforts to keep pace with the surging demand. Indeed, the Wall Street Journal reported that the build-to-rent industry is one of the fastest-growing job sectors within the real estate industry.
Enter TalentWoo. With more than a decade of experience in the single-family rental and build-to-rent arena, we have been instrumental in helping some of the most renowned names in the industry recruit the talent they require to scale their operations. Two of the top three institutions in the sector depend on our expertise to help them expand their businesses.
To sum up, the build-to-rent phenomenon has irrevocably transformed the real estate industry and shows no signs of slowing down. With robust growth, revenue, rents, returns, and profits, it has emerged as a highly compelling investment opportunity for developers and investors alike. And with TalentWoo’s specialist knowledge of the sector, firms can find the talent they need to thrive in this fiercely competitive marketplace.