Build-to-rent Florida housing is taking off, says the CNBC website.
The market is exploding as investors rush in, builders, including Qualitas, look to build rental homes across Florida.
More investors are being new homes, like those being offered by Qualitas in Cape Coral.
Why build-to-rent Florida housing is taking off
CNBC says, “The build-to-rent business is growing fast, with several companies, including big names, dipping into it.”
During the foreclosure crisis nearly a decade ago, investors plowed into the housing market. They bought millions of distressed homes and turning some of them into lucrative rentals.
“They transformed the once mom-and-pop market of single-family rentals into a large-scale, formally managed asset class — and it is still growing, in fact faster than ever,” the website says.
Foreclosures, however, are now few and far between. Distressed properties — foreclosures and short sales — make up just 2% of home sales today. That is down from a high of 49% in March 2009, according to the National Association of Realtors. The regular existing home market is very pricey, so investors are now turning to a new strategy: Buy new. And suddenly, the so-called build-to-rent market is exploding.
Putting dozens of homes in one location makes property management much easier and far less expensive.
Numbers are larger
In 2017, 37,000 homes were built as rentals, according to the National Association of Home Builders. That grew to 43,000 last year, or just under 5% of total single-family housing starts. But that is just homes built and held by builders for rent and doesn’t include those sold directly to investors, so the numbers are likely larger and growing more quickly.
Demand is growing, because while the huge millennial generation is aging into marriage and parenthood, not all of them want nor can they afford to buy a home.
Renting also offers flexibility to baby boomers who are moving into smaller homes that they can lock and leave, when required.
For investors, buying new has a multitude of benefits, especially when the homes are in the same community. There are no repair costs that come with a 15 or 20-year-old home and appliances are new, too.
There is also much less turnover in single-family rentals, and the rental market is much less volatile than the home sales market.