Built-for-rent investment has become one of the market stalwarts in some parts of the world this year, particularly where real estate supply has dropped to rock-bottom levels. Southwest Florida is one of those areas and it’s currently experiencing “a tidal wave” of built-for-rent developments.
Tampa and Sarasota built-for-rent hotspots
A recent article in the Tampa Bay Times described the new phenomenon sweeping Southwest Florida. It claims that the area is seeing a new type of suburb, “those with new homes only for rent”.
The rise is this sort of property comes in response to “an insatiable demand for homes”, experienced across the US but particularly in Florida metros. In some, inventory levels for single-family homes stand at less than one month.
Demand is so high for properties that rental leases are also flying off the shelves. This surge has also affected rates in Southwest Florida. A recent survey by the National Association of Realtors found that rents have risen in several metros in the area by 20%, more than double the national rate.
Built-for-rent tidal wave in Florida
Arizona was the first state to experience built-for-rent investment on a large scale. Its success led to its spread to Denver and Texas before reaching Florida this year.
“It’s like a tidal wave that is about to crash on the beaches of Florida,” said Brad Hunter from Hunter Housing Economics, quoted in the articles. “I see it suddenly hitting this year.”
According to Hunter, the explosion of the trend in the Sunshine State makes it difficult to gauge the actual number of built-to-rent developments. However, he estimates that almost 20 are currently building in the Tampa Bay area. They form part of the 600 units in Florida as a whole.
Demand for single-family rentals
Analysts believe that 2022 will see considerable growth in the sector as investors appreciate the potential behind the built-for rent concept. In addition, data from the industry points to a solid business model, particularly in those areas where single-family homes are in high demand.
Larger homes with private outdoor areas have become more desirable since the pandemic arrived. In addition, young families are particularly keen to upgrade from an apartment to a single-family home to enjoy more living space.
However, would-be buyers in Florida are currently facing double-pressure from the market: on the one hand, escalating prices have placed many homes out of their reach. And on the other, the lack of supply has reduced inventory to its lowest level ever.
In this context, rental homes offer a stop-gap solution for many Floridians and built-for-rent single-family homes give them the space they need.
BRIC Group has built-for-rent opportunities in Southwest Florida in the highly sought-after area within easy reach of Sarasota and Punta Gorda. Plots with full infrastructure start at just US$26,500 and new build upgrades are available.
(Source: Tampa Bay Times)