The Marketplace for Single-Household Leases Grows as Homeownership Wanes

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The Market for Single-Family Rentals Grows as Homeownership Wanes

The supply of owner-occupied housing in the US has grown by 10 percent over the past five years, while rental apartments have only increased by 1 percent. Freddie Mac estimates the housing shortage in the US at more than 275,000 homes.

"There is a shortage of homes in the rental market as much as there is in the home-purchase market," said David Howard, executive director of the National Rental Home Council. "The demand for single-family homes has increased, partly in response to the Covid pandemic, but also due to strong demographic factors."

The shift also appeals to landlords, as tenants in single-family homes tend to stay longer and have lower failure rates. In the NexMetro Communities, whose 23 districts carry the Schindel Avilla Homes, the tenant retention rate has increased by 20 percent since the beginning of 2020. For investors and landlords, built-to-rent properties are increasingly offering higher returns that continue to pay off year after year. "With so many landlords holding onto distressed tenants, built-to-rent offers a higher capitalization rate than real estate development and sales," said Justin Abdilla, a real estate attorney. "Why slaughter the sheep when they can be sheared?"

Nicolette Boxe, an investor and real estate agent in Leesburg, Virginia, agrees. After years of buying and renting properties one at a time, she is now building a community of two-story, three-bedroom townhouses in her hometown of DeRidder, La. will rent for around $ 2,000 per month. You'll stand out in DeRidder, she said, and that's the point.

"We're trying to give people an urban city feel, even in Louisiana, where people aren't used to it," she said.

In the NexMetro communities that surround Phoenix, Dallas, Denver and Tampa, "residents are first and foremost tenants of their choice," said Mr. Hartmann, the general manager. “You have the necessary change to buy, but you decide to rent it based on your stage of life and your preferences. For them it's a lifestyle game. "

Micaela Cullender, 22, a Goldman Sachs fraud specialist, chose the Avilla Heritage Community in Grand Prairie, Texas, near Dallas after the noise from neighbors in her apartment building became unbearable while working from home. She and her fiancée Tate Stavenhagen wanted to buy a house after they got married. After living in Avilla, where they have 3-foot ceilings and quartz countertops, they plan to build a home with amenities that match those of their rent.

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