Investing in Build-To-Rent Communities: What You Should Know

January 6, 2023
Aerial shot of a subdivision

Investing in Build-To-Rent communities is becoming an increasingly popular investment strategy as real estate markets evolve. Build-To-Rent communities are a type of real estate investment involving purchasing land and constructing purpose-built rental properties. This type of investment aims to generate steady cash flow from rental income and, over time, appreciation of the property.

The Millennial Home Buyer

Millennials are a major driving force behind the increased demand for Build-To-Rent communities. Millennials are more likely than other generations to rent instead of buy and are attracted to the convenience and flexibility of renting a home. 

Build-To-Rent communities offer a unique opportunity for this generation to have access to quality rental homes that are tailored to their needs.

The Benefits of Investing in Build-To-Rent Communities

Investing in Build-To-Rent communities offers several advantages, including:

1. Steady cash flow: Build-To-Rent communities typically generate steady cash flow from rental income, offering investors a consistent return on their investment.

2. Appreciation potential: As demand for rental properties increases, the value of Build-To-Rent communities can appreciate over time, increasing the return on the investor’s initial investment.

3. Low risk: Build-To-Rent communities are generally considered to be a low-risk investment, as they are typically leased to reliable tenants.

4. Tax benefits: Investors may be able to take advantage of tax benefits when investing in Build-To-Rent communities.

Overall, investing in Build-To-Rent communities can allow investors to generate steady cash flow and potentially benefit from appreciation of their investment.

Inflation Hedge

Build-To-Rent communities can also be a good option for investors looking for an inflation hedge. As inflation rises, rental prices also tend to rise, which can help protect investors from the effects of inflation. Additionally, the construction of new homes can help increase the supply of rental properties, which can help keep rental rates in check.

Strong and Increasing Demand

The demand for rental properties is expected to continue to increase in the coming years as more people choose to rent instead of buy homes. This increased demand can lead to higher rental prices and greater cash flow for investors. Additionally, as rental prices rise, the value of the investment property may also appreciate.

Risk Mitigation

Finally, investing in Build-To-Rent communities can help investors mitigate the risk of investing in real estate. By investing in larger projects and taking advantage of the economies of scale, investors can spread the risk across many properties and tenants. In addition, the rental income from these properties can provide investors with a steady stream of income, which helps offset any potential losses.

To Sum Up

In conclusion, investing in build-to-rent communities can be a great choice for long-term real estate investments with potentially high returns. Researching and understanding the specific market is important to make a wise investment decision. 

Build-to-rent communities can provide a steady stream of rental income and capital appreciation when done correctly. Investors should also be aware of the risks associated with this type of investment and understand the local market before committing to a build-to-rent project. With the right research and planning, investing in build-to-rent communities can be a great way to grow your real estate portfolio.

Are you looking for Florida investment properties? Next Generation Land Company we offer only the best when it comes to developing thriving and desirable communities. Get in touch with us.