The Denver Business Journal wrote a great story recently titled, “Single—But Not Looking to Mingle.” This story was not about single adults looking to remain single. But, this story is about the hottest idea in the real estate market nationally, and that is Build for Rent, in which big investment firms partner with home builders to build new home communities just for renters. Why? According to the story:· Low interest rates
· A booming housing market
· Demand from renters seeking more space during the pandemic
· Millions of renters are now “renters by choice” and they can afford higher rents
Yardi Matrix says there are at least 10 build-for-rent communities, totaling 1,500 new homes that have either been completed or are under construction here in metro Denver. Here are some of the names of these communities and locations—
· Canvas at Castle Rock is building 102 townhouses for rent.
· NexMetro Communities, one of the first companies using this strategy, builds under the name of Avilla Homes and they have completed about 500 rental homes in Commerce City, Brighton and Thornton.
· NexMetro wants to build between 300 and 500 single-family homes as rentals along the Front Range each year going forward and their next project of 130 homes at 96th and Tower Road in Commerce City will start construction later this year.
· Oakwood Homes is now building The Front Porch, its first single-family rental community, in Green Valley Ranch.
According to John Burns RE Consulting metro Denver has an estimated 115k single-family rental homes currently or about 9% of total housing stock and this number and share will grow as both large institutions and smaller investors look to invest in more single-family homes in Denver.
Jenny Usag, the employing broker at Usag Realty said, “Investors are now looking more at the long-term gain from appreciation, and they’re sitting in the market longer, which is, I think, going to affect inventory, and has affected inventory, Investors aren’t going into flip, investors are going in to hold and to create rentals for the long haul, to get the appreciation gain.”