By Natalie Jones
Phoenix’s build-to-rent communities are filling the space between renting and owning, and it is growing by popular demand.
Commonly referred to as single-family rentals, they offer another option for renters who do not want to live in traditional multifamily housing, without the commitment or responsibility of home buying.
Here are the top reasons why build-to-rent homes have become a popular choice in Phoenix metro.
The best of both worlds
Build-to-rent communities offer renters everything they need for a modern and worry-free lifestyle. Like an entry-level starter home, these housing communities are the perfect solution for many residents. Combining convenience and style, these homes were designed to streamline everyday living experiences. They offer a lock-and-leave, maintenance-free, resort-style environment with all the amenities of traditional multifamily housing options.
With single-family rentals, residents can enjoy the same amenities and quality of apartment living, while having the space and privacy of having a home. That said, it is important to keep service quality the same as if they were renting a traditional apartment. Here are some things to prioritize when managing a build-to-rent community:
- Uphold the same high standard of customer service
- Remember that the resident comes first
- Although they are renting, this is still someone’s home – treat it as such
A shift in market trends
Population growth has been an influential component of Phoenix’s latest market trends. In turn, many up-and-coming submarkets have developed throughout the Metro area which is causing the need for more housing options. Rising interest rates have led the home buying environment to shift, driving demand for multifamily options like build-to-rent communities. Additionally, it continues to be difficult for some to qualify for mortgages as home prices remain at an all-time high. Build-to-rent communities have become an ideal option for many as an alternative.
Unique investment opportunity
Build-to-rent communities are a new space where competition is different, drawing the attention of investors alike. With a market that has consistently performed in recent years, it has set the stage for innovative investment opportunities to succeed.
Build-to-rent is the hottest development sector in the Phoenix metro, accounting for nearly 40 percent of all new products anticipated in 2023. Other markets have yet to explore the build-to-rent segment to this extent, making this area a sweet spot and a unique investment opportunity. Furthermore, these communities are seeing a significantly lower turnover rate compared to traditional multifamily housing because of the high-growth segment that is generating higher rental rates.
Phoenix has the luxury of building out, as opposed to east coast cities that have no other choice than to build up. Simply put, there is more opportunity for it here than in other markets because of the combination of geographical and market advantages.
About the Author
Natalie Jones, Managing Director of Multifamily Investments at Mark-Taylor, is a trusted leader within the industry. Handling the investments and assets of our clients, Natalie offers consistent communication to achieve optimal financial success across the Mark-Taylor portfolio.