With new shifts in the rental marketplace, it is becoming clear why more and more boomers are moving into single-family rental homes. Most flock to master-planned communities, aimed at those who don’t want to deal with the maintenance of owning a home and those who are looking for the newest and most innovative amenities. This shift is showing builders that newly build SFR’s are in high-demand and are increasing at an impressive rate. Continue reading below to learn more!
It was a lunch stop for burgers that changed Bonita and Bernie Styers’ idea of the American dream.
The couple, both in their 60s, felt that their 3,000-square-foot, Dallas-area house was too big for two empty nesters. They had considered buying a smaller house, but it was tough to find one for the right price in such an expensive market. That’s when Bonita spied a gated community of compact, cottage-style homes behind the parking lot of a fast-food restaurant.
She had found a single-family rental community—a neighborhood of one- to three-bedroom, single-family, detached homes. The neighborhood of 122 rentals ranges from $1,275 a month for a one-bedroom house to $2,900 for a three-bedroom model.
“We feel like it’s our home, but we have a little bit of help taking care of it,” says Bonita, 62, a medical receptionist.
These master-planned communities are aimed at those who don’t want to deal with the maintenance of owning a home—but aren’t keen on living in an apartment either. And they’re gaining in popularity. That’s because more baby boomers are retiring and seeking a simpler life, as sky-high home prices are pushing many out of the market.
The Urban Institute reported in 2017 that single-family rentals—whether detached homes or townhouses—were the fastest-growing segment of the housing market.
Builders have taken note. The number of newly built, single-family rentals was up from 37,000 in 2017 to 43,000 in 2018, according to the National Association of Home Builders. They make up only about 4% of all single-family construction nationwide, but they’re expected to jump to 6% over the next few quarters, according to Robert Dietz, chief economist of the NAHB.
They’re going up predominantly in the suburbs of Southern states stretching from Arizona through Texas and into Florida and the Carolinas, says Rick Palacios Jr., director of research for John Burns Real Estate Consulting. There is more affordably priced land available in this part of the country, and the cheaper property means rents don’t have to be sky-high for builders to make ends meet.
“The stigma of renting has … gone away,” says Palacios, whose firm advises builders and developers nationally. “Fewer and fewer people think you need to own a home to make it.”
Contact Jeff Cline at SVN | SFRhub Advisors
SVN | SFRhub Advisors
2400 E. Arizona Biltmore Circle
Phoenix, AZ 85016