Month: December 2022

From young professionals to retirees and families of any size, more and more people are opting to rent instead of buying residential real estate. As these renters look for a housing alternative that offers more privacy and space, more and more developers adopt by creating entire communities of single-family homes built specifically for the purpose of renting.

What exactly are built-to-rent homes, and how can a real estate investor benefit from these? Keep reading to learn more.

What Are Built-to-Rent Homes?

A built-to-rent home is a single-family home constructed for the purpose of long-term rental. Also referred to as BTR homes, B2R homes, or built-for-rent (BFR) homes, such properties have become the hottest trend in the rental market over the past few years. Today, entire communities of houses built for the sole purpose of renting continue arising across the country.

While typical new-build communities are developed with prospective buyers in mind, B2R homes are designed to be used by tenants. This can affect the property itself, as well as the overall layout of the community. Typically, built-to-rent communities combine versatility (to meet varying residents’ needs) and luxury (to serve as an attractive alternative to other rental options).

Types of Built-to-Rent Homes

A typical built-to-rent home can look like a traditional, suburban family house. However, it can also encompass a variety of building plans, such as:

• Small lot homes. These are standard individual homes that have been built close together, with lots as small as 600 square feet each.
• Row homes. Row homes are built side-by-side and share a common wall in between.
• A duplex includes two rental units attached to each other.
• Horizontal apartments. This is a relatively new term describing a tight cluster of freestanding, single-family rental residences that is professionally managed by the same company.

Benefits of Investing in a Built-to-Rent Home

For investors looking to acquire a rental property, built-to-rent is often a good option. Here are some important benefits that these types of homes offer over typical rental units:

• You may be able to collect higher rent. Rent payments for single-family homes are growing at a faster rate as compared to payments for multi-family apartments. This means that with built-to-rent homes, you may be able to achieve faster growth to your passive income.
• You have more flexibility in property location. If you want to get into real estate within an up-and-coming location, building there is often easier than finding an existing property.
• You will experience less tenant turnover. While apartments typically attract more temporary renters, single-family homes are preferred by families looking for long-term housing.
• You may be able to invest in real estate with less competition. By building your own rental property, you will be able to avoid bidding wars and other competitive struggles associated with purchasing real estate.

Built-to-Rent: Additional Considerations

While building your own rental property offers several attractive benefits, there are a few other factors any prospective landlord should keep in mind.

Every experienced real estate investor knows that the less you spend, the more likely you will be able to get a good ROI. So, buying distressed property and increasing its value through renovations will often be more profitable than purchasing a new house from the builder. Your new rental property’s value will continue to increase with the real estate market while it is still under construction, which will often help to offset some of the extra costs.

Final Thoughts

Without a doubt, built-to-rent homes are a hot trend for a reason. For those who aren’t ready to buy, these units offer a more comfortable alternative to rental apartments. For real estate investors, BTR housing is a great way to get around an overly competitive market.

As with any other type of rental real estate, generating ROI from a built-to-rent home often requires the help of a professional property manager. Luckily, Lofty Property Management can help you to take care of your new built-to-rent property and ensure that your tenants are in good hands. Give us a call today to learn more.

 

Whether you are a professional landlord or just looking for a way to make your real estate work for you, it is crucial to understand how to manage a rental property properly.

If not managed correctly, even the best property will deteriorate or not add value to your investment portfolio over time. Luckily, Lofty Property Management has a few professional tips to help every potential landlord keep the property generating revenue for years to come. Let’s get started!

Professional Tips for Successful Rental Property Management

The job of any landlord can be divided into three equally important parts: managing the property itself, managing tenants, and managing finances.

1. Managing the Property

Taking care of the property itself involves maintaining the rental structure in great physical condition to ensure the safety of the tenants. For example, you need to make sure that your tenants have adequate heating and air conditioning, have access to running water at all times, and can enjoy clean and safe common areas.

This means that it will be up to you to figure out how to fix plumbing problems, roof leaks, loose handrails, faulty locks, and cracked tiles. In addition, you will have to deal with inspections from the township, the lender, and the insurance company.

Pro Tip

Regular inspections can help to minimize the risk of potential problems within the property. Some items to regularly inspect include smoke and fire alarms, HVAC systems, roof and downspouts, windows, decks, and water lines.

2. Managing Tenants

Another important part of how to manage a rental property is dealing with tenants, – and this involves much more than simply collecting rent. In addition to setting due dates and late fees for rent collection, you will need to prepare legal lease agreements, find and screen tenants, and respond to any tenant complaints and repair requests. Furthermore, as a landlord, you will be responsible for tenant evictions, which is often the most dreaded part of managing a rental property.

Pro Tip

If you are not prepared to send legal eviction notices, file for eviction with the court, and prepare your evidence for the hearing, don’t worry! You can always hire a professional property management company like Lofty Property Management to take care of all your landlord responsibilities, from beginning to end.

3. Managing Finances

The third part of how to manage a rental property successfully involves taking account of your finances. As such, you need to understand exactly how much money is coming in each month and how much money is going out.

While your rental income will often include rent payments alone, you will be responsible for a number of fees as a landlord. This includes paying the mortgage, yearly property taxes, home insurance, and any fines and additional fees based on property inspections. In addition, you would need to arrange whether you or your tenants are responsible for paying utilities like gas, water, and electricity.

Pro Tip

Maintaining organized financial records is of the utmost importance to managing your rental property stress-free. Make sure to record all the rental income coming in, along with property expenses like maintenance, trash removal, and employee payroll. Alternatively, you can hire a qualified bookkeeper to keep track of your finances.

Make Your Life Easier with Lofty Property Management

Without a doubt, investing in rental properties comes with a host of tasks that need to be completed regularly. From learning how to manage a rental property and find tenants to regular property maintenance and emergency repairs, there is a lot on any landlord’s plate.

Luckily, professional property management companies like Lofty Property Management can take a lot of the stress and responsibility off your shoulders. With a track record of success, outstanding due diligence, and a transparent fee structure, Lofty Property Management has all it takes to ensure that your property and your tenants are well taken care of. Contact us to learn more.