In the last several months, we’ve seen a two-fold increase in mortgage rates. As the Federal Reserve raises benchmark interest to mitigate inflation, the costs associated with homeownership have risen significantly. While many builders, developers, and brokers are finding it difficult to navigate this changing climate, others are taking advantage of the shift with build-to-rent residential communities.
The build-to-rent market has seen a substantial lift. Last year, it was estimated that North Texas welcomed the construction of some 5,000 new single-family rental homes. This accounted for roughly 9 percent of construction throughout the Dallas-Fort Worth region.
As more and more would-be homeowners abandon hope in the traditional market, build-to-rent developers have found their opening.
Why Build-to-Rent Makes Sense
When you think about it, all the pieces are in place for a build-to-rent boom. Not only are record interest rates adding to the appeal of leasing, but lifestyles are changing as well. After the pandemic, many Millennials moved away from big cities, opting for the spatial upgrades the suburbs offered.
With historically low real estate inventory, many of these suburban refugees are finding the perfect fit in single-family rentals.
Jake Dollgener, a transmission technician in South Dallas, is among this new wave of suburban renters.
“I moved back to the DFW area from the east coast at the end of 2022 because the job market here is really good,” says Dollgener. “Unfortunately, the housing market has become so expensive. I’m renting a newly built home just south of Wolf Creek. When things cool off, I plan to pull the trigger on my first buy.”
Company Capitalizes on the Build-to-Rent Boom
Good + West Residential is a real estate developer out of Austin. This firm focuses on both multifamily and single-family rental properties with over 937 units completed between Austin and D-FW.
Right now, this growing residential development firm is focused on capitalizing on the build-to-rent boom. They currently have $150 million in development across the lone star state, including two communities underway in the D-FW region — one in Denton and one in Fort Worth. They call these developments Perch homes.
“We created Perch for people ready to take a step up from traditional apartment living,” the firm states on its website. “People looking for room to roam, space to breathe, and stars to sit under. All without giving up the refined architecture, modern finishes, and lifestyle-enhancing features you’d get in new apartments in the heart of the city.”
Homes in these communities feature farmhouse architecture, outdoor spaces, plus an array of modern amenities and community features like resort-style pools, pet parks, etc. With such an innovative approach to the rental market, this model could very well see continued popularity in the coming years.
The Build-to-Rent Boom is Just Beginning
Dallas is ranked No. 3 in the nation for build-to-rent projects. With developers like Good + West, Wan Bridge, and Thomas Woliver creating single-family rental communities throughout suburban cities such as Denton, Fort Worth, McKinney, and Grapevine, this trend is blowing up across our region.
