Is Build-To-Rent For You?

There’s a new trend in the real estate market that took off during the pandemic years and still holds strong interest for investors and, in some cases, potential homebuyers. As we watch the market continue to reach new levels of home valuations, inventory lows, and trepid demand, this Build-To-Rent style of housing continues to draw our attention. Build-To-Rent (BTR, B2R, BFR) has many pros and cons for both owners and renters, especially in a market where the cost-of-living continues to rise and debts hang over the national discourse.

What is Build-To-Rent

BTR is typically “entire communities of single-family rentals in one professionally-managed, high-amenitized community,” according to CrowdStreet. BTRs are typically long-term rentals, not short-term rentals (like AirBnB or VRBO properties). These types of properties are not restricted to communities, but since the pandemic private equity firms have been heavily investing in this style of property ownership. Individuals, too, have started looking at BTR for a way to safely invest.

These rentals are similar to apartments and condominiums, where the property’s maintenance is handled by the owner. In larger communities, other amenities become available, like pools, community centers, parks, and more. In most cases, these BTR homes are smaller than built-to-sell homes and have fewer ‘add ons’ or amenities.

Is BTR for Renters

BTR homes can be attractive to renters and potential homebuyers. Since housing prices are at historic highs, student loans and credit card debts are at monumental levels, and stagnant wages continue to pinch pockets, the BTR model fits into most first-time homebuyers’ budgets. Here are some pros and cons for getting into a BTW.


  • Renters don’t have to get into a mortgage at high interest rates.
  • BTRs don’t require as high of a credit score to enter.
  • Community amenities like pools, community centers, mail rooms, parks, and more add enticing incentives for renters.
  • Prices mirror other rental properties, but offer more space and privacy than apartment complexes or condominiums.
  • Allows rentals without HOA fees.
  • Like apartments and some condominiums, repairs and maintenance are left to the property owner, not the renter.


  • Prices often mirror mortgage costs with additional amenities within BTR communities.
  • Renters are unable to personalize their rental.
  • Payments made to rent to not go into amortizing loans or savings.
  • Rent is set by the property owner, and may rise year-to-year (or between contract signings) based on accumulated expenses incurred and rising interest rates.

Is BTR for Investors

If you’re looking to invest in properties, but find the costs of purchasing a formerly owned property higher than desired, a Build-To-Rent home could be perfect for you. Here are some pros and cons to getting into the BTR market.


  • Less risk in the long-term rental market. Tenants tend to respect the property more when they plan to stay long-term. You also have far lower tenant turnover than in short-term rentals.
  • Property valuations continue to rise, so investing today would mean a good payout in 5 – 10 – 20 years when ready to divest.
  • With newly built properties, there are less maintenance costs up front allowing for rental payments to build savings for the future.
  • There is quite a bit of flexibility in when building, so can find the right market for prospective tenants, prices, amenities, etc.


  • Property management can be stressful. Working with tenants can bring new levels of understanding to rental ownership.
  • Maintenance costs can be surprising, especially when working with older properties. With a newer BTR, some of these high costs are foregone.
  • Competing with large equity firms or BTR communities can be a struggle. Offering different amenities, or building in specific markets, can help allay this competition.
  • Finding a balance between rental pricing and your target ROI can be difficult in an inflationary environment.

What We Recommend

For Investors

BTR properties can be great for investors! If you’re looking to have your money work for you, BTR’s can be a great way to have slightly passive income flowing into your bank account. As realtors, we support expanding your real estate portfolio by adding long-term rentals to the market. This also helps local families find affordable options when their credit  is not great or interest rates are high.

For Renters (Or Prospective Homebuyers)

If you’re looking to get into a property and build for a better future, BTRs are not the way to go. The price and size of the property may be appealing, but longterm the benefits do not outweigh the costs. Each month’s payment goes to benefit the property owner, not the renter. Over time, these costs of living in BTRs will rise, potentially pushing the tenant out of the property and back into apartments and condos. On the whole, BTRs are not less expensive than other rental options. We would recommend finding a low cost rental and saving for a larger down payment when the mortgage rates reduce.

If your plan, however, does not include home ownership in the near future, BTRs can be a great way to have the feel of home ownership with the benefits of renting. Ultimately, it’s up to your budget and desires.

When you’re ready to enter the market, whether to build a BTR or buy a previously owned home, get in touch with The Wise Team. We’re here to guide you in the real estate market to make the best decision for you