In recent years, a notable transformation has been unfolding in the residential real estate landscape. As traditional homeownership becomes increasingly out of reach for many and renter preferences shift toward more flexible living arrangements, the Build-to-Rent (BTR) model has surged in popularity. Unlike the conventional rental model that converts existing homes into lease properties, BTR developments are designed and constructed specifically for the purpose of renting. Kory Habiger explains that these purpose-built rental homes offer a blend of privacy, community living, and institutional investment stability—capturing the attention of both renters and real estate investors alike.
For investors seeking resilient, long-term assets in a shifting economic environment, BTR communities represent a compelling opportunity. Kory Habiger explores the drivers behind the BTR trend, the unique characteristics of these communities, and what current and prospective investors need to consider to make informed, strategic decisions.
The Emergence of Build-to-Rent: Understanding the Model
The Build-to-Rent model consists of housing developments—typically single-family homes or townhouses—that are constructed explicitly for the rental market. Kory Habiger explains that these are not conversions of pre-existing properties but rather purpose-built units managed professionally and often located within amenity-rich communities.
Key features include:
- Professional property management on-site or within the community
- Uniform design and infrastructure, reducing maintenance complexity
- Shared amenities such as pools, fitness centers, parks, and co-working spaces
- Long-term lease options and modern conveniences aimed at lifestyle renters
BTR appeals to a growing demographic that values the space and privacy of a suburban home but doesn’t want the financial or maintenance obligations of ownership.
Why Build-to-Rent Is Growing in Popularity
Kory Habiger emphasizes that several key trends are fueling the rise of Build-to-Rent developments:
1. Housing Affordability Crisis
The cost of homeownership has skyrocketed across many U.S. markets. Rising interest rates, limited housing supply, and inflated home prices have made it increasingly difficult for first-time buyers to enter the market. BTR provides a middle-ground option—offering the comforts of a standalone home without the financial burden of a mortgage, down payment, or unexpected maintenance costs.
2. Lifestyle Flexibility and Changing Preferences
Millennials and Gen Z renters, in particular, are less tied to the idea of homeownership than previous generations. Career mobility, urban sprawl, and a preference for experiential living over material ownership have increased the appeal of rental living—even in suburban or semi-urban settings.
3. Aging Population Seeking Simplification
Empty-nesters and retirees are also showing interest in BTR communities. These older tenants seek simplified living arrangements without the responsibilities tied to maintaining a property, while still enjoying privacy and access to outdoor spaces.
4. Institutional Investment Appeal
Institutional investors have taken note of the stable cash flows and scalability of BTR communities. Firms such as Blackstone, Brookfield, and Invitation Homes have made significant investments in this space, seeking to capitalize on the reliable, recession-resistant nature of rental income.
The Investor’s Perspective: Key Considerations
Build-to-Rent communities offer a unique set of benefits and challenges for investors. Kory Habiger explains that understanding these dynamics is crucial for long-term success.
1. Steady Cash Flow and Demand Resilience
Rental homes tend to maintain occupancy even during economic downturns, as people prioritize housing above nearly all else. BTR communities, due to their professionally managed nature and uniformity, can generate more predictable returns than scattered-site single-family rentals (SFRs).
2. Operational Efficiency
With homes built specifically for renting and often clustered together, property management becomes more streamlined. Maintenance is more efficient, tenant services can be centralized, and leasing strategies can be more cohesive.
3. Appreciation and Exit Strategy
Although BTR homes are rented rather than sold individually, investors can benefit from appreciation of the entire community. When demand increases, these developments can be sold to institutional buyers, REITs, or as turnkey investment portfolios.
4. Higher Upfront Costs and Development Risks
Investing in BTR projects requires significant capital, particularly when purchasing land, navigating zoning regulations, and funding construction. Delays in permits, labor shortages, or cost overruns can eat into margins. Investors must assess their risk tolerance and ensure they have contingency plans.
5. Tenant Retention and Community Culture
Longer leases and tenant retention are key to profitability. Creating a strong sense of community—through amenities, design, and events—can reduce turnover and vacancy. Investors should evaluate the reputation and operational strength of property managers as part of their due diligence.
Geographic Hotspots and Market Trends
Build-to-Rent is particularly thriving in high-growth Sun Belt states such as Texas, Florida, Arizona, and Georgia. These areas offer a combination of population growth, relatively affordable land, and friendly zoning laws. Suburban and exurban areas near metropolitan hubs are especially attractive, as they provide the space needed for horizontal development while remaining accessible to urban job markets.
Kory Habiger understands that the shift to remote and hybrid work has reshaped demand, with tenants seeking more space, home offices, and outdoor living areas—all of which are more readily available in BTR homes than in dense apartment complexes.
Looking Ahead: Is Build-to-Rent a Lasting Investment Trend?
Build-to-Rent is not just a passing phenomenon—it’s a response to structural shifts in housing, economics, and demographics. While the pace of development may be influenced by interest rates and economic cycles, the fundamental demand for high-quality, professionally managed rental housing is expected to persist.
Kory Habiger emphasizes that as more institutional capital flows into the BTR sector, competition among developers and investors will likely increase. Differentiation will become more important—whether through better amenities, technology integration, or localized community engagement.
Build-to-Rent communities represent a transformative shift in the way people live and in how investors approach residential real estate. For those willing to navigate the capital requirements and development timelines, BTR offers the potential for steady income, portfolio diversification, and long-term growth.
Kory Habiger understands that as with any investment, thorough due diligence, market research, and partnership with experienced developers and property managers are essential. In a world where flexibility is paramount and the definition of home continues to evolve, BTR is a model well-suited for the future. For investors with a long-term vision, this trend is one worth embracing.
