The Rise of Build to Rent Communities: What Buyers Should Know

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The rise of build-to-rent communities is transforming the real estate landscape, offering new options for renters and investors alike. Build-to-rent communities are developments where properties are built specifically for rental purposes rather than for sale to individual homeowners. Most people know that homes are built to sell, but what many don’t know is that they can also be built to rent. That second category, called build-to-rent communities, has been growing rapidly, serving rising rental rates and growing populations. The growing demand for rental housing is fueled by a growing population and the fact that many Americans are choosing to rent instead of buy due to affordability challenges. These communities are popping up in suburbs, city outskirts, tertiary markets, and new masterplan neighborhoods.

Who Should Read This Article

This article is for homebuyers, investors, and anyone interested in understanding how the rise of build-to-rent communities affects the housing market. Understanding this trend is crucial for making informed decisions in today’s evolving real estate landscape.

What Buyers Should Know About Build-to-Rent Communities

Build-to-rent communities are designed specifically for renters who aren’t interested in or ready for home ownership. They are developments where properties are built specifically for rental purposes rather than for sale to individual homeowners. These communities are designed specifically for renters who are not interested in or ready for homeownership. For buyers, this means that these homes are not typically available for purchase, and the presence of such communities can influence local housing supply, pricing, and neighborhood dynamics.

Why Build-to-Rent Is Trending

This article breaks down what BTR communities are, why they’re expanding so quickly, and how they impact both renters and buyers. Whether you’re planning to purchase a home, invest, or simply trying to understand how housing markets are evolving, the BTR development trend is worth watching. The demand for rental housing is rising, with an estimated 112,920 build-to-rent homes started nationwide in 2023, a 102% increase since 2019.

Millennials are driving 55% of the demand for build-to-rent properties, followed closely by Gen Z at 48%, and the rise of the millennial generation is a significant factor in this trend. Many would-be homeowners are choosing to stay renters because it is cheaper to rent than to buy a home in every major U.S. metro.

What Are Build-to-Rent Properties?

Build-to-rent communities are developments where properties are built specifically for rental purposes rather than for sale to individual homeowners. Typically, build-to-rent homes include single-family rental properties like individual homes, townhouses, duplexes, and small-lot homes.

Build-to-rent communities—also known as BTR or BFR (build-for-rent)—are residential developments designed specifically for renters, not buyers. These aren’t just a few homes held by landlords in a for-sale neighborhood, but full communities of townhomes, duplexes, small-lot homes, or single-family rentals built from the ground up for long-term rental. Unlike traditional apartment buildings, BTR communities typically do not include apartment buildings and instead focus on providing standalone or attached homes that offer more privacy and space. This distinction sets BTR homes apart from conventional multifamily rentals and apartment buildings.

There are typically two kinds of BTR ownership structures:

• Institutional BTR: Entire neighborhoods owned and operated by large investment firms or real estate funds.
• Individual BTR: Developments where each unit is sold to small-scale or independent real estate investors, usually with professional management already in place.

Some communities are a mix of both. What they all share is a rental-first business model. The homes are treated as income-producing assets from the start and are not intended to ever hit the resale market for owner-occupants. That means they don’t add to the available housing inventory for buyers—only for renters. Build-to-rent homes are a distinct asset class in real estate investment, offering long-term stability and diversification. BTR homes can take the shape of rows of townhomes, duplexes, small-lot homes, or suburban-style detached single-family rentals, but not traditional apartment buildings.

These are the common features that define most BTR communities:

• Professional property management
• Updated home designs with efficient layouts
• Shared amenities like pools, gyms, or parks
• Centralized leasing and online rental platforms
• Turnkey maintenance services

BTR communities provide high-quality rental units that are typically more expensive than multifamily rentals but offer suburban benefits such as more space and privacy. They are increasingly sought-after because they combine the privacy and living space of detached single-family homes with the amenities and convenience of professionally-managed apartment buildings.

Developers are building for renters because that’s where demand is growing, and it creates a real estate product that can be sold to real estate investment firms or REITs. These institutions see the profit potential of housing and future rent growth. As home prices climb and affordability slips out of reach for many households, long-term renting has become a practical and, for some, permanent solution. As a result, demand for quality rentals is increasing. BTR offers a way to meet that demand while creating a steady return for real estate investors.

Typical Amenities of Build-to-Rent Developments

Build-to-rent communities are designed to appeal to renters who want the space and comfort of a home without the responsibilities of ownership. These communities focus on providing high-quality rental units that are well-designed and built with high-quality materials, which reduces maintenance needs and costs for both tenants and investors. To stay competitive, many BTR developers include features that rival or exceed those found in traditional neighborhoods.

Typical amenities of build-to-rent developments include:

• Community pools and clubhouses
• Fitness centers and yoga rooms
• Co-working lounges and conference spaces
• Dog parks and pet washing stations
• Outdoor kitchens, fire pits, or grilling areas
• Walking trails and playgrounds
• On-site maintenance and package lockers

BTR homes often command a 10–15% rental premium over traditional single-family rentals due to their superior amenities. These properties also offer more space than standard apartments, including more square footage, private yards, and attached garages, which appeals to renters seeking privacy and comfort.

While individual units may be slightly smaller than traditional homes, the shared amenities are designed to add convenience and a sense of luxury. This structure helps attract long-term renters who want a lifestyle experience with less maintenance and more flexibility.

Management Structures of BTR Developments

Once completed, the BTR developments are often sold in bulk to institutional owners like real estate investment trusts (REITs) or private equity firms. These communities are then professionally managed from the start. On-site or third-party property management teams handle leasing, maintenance, landscaping, and tenant communication. Many BTR operators utilize management tools—such as software and technology—to streamline operations, automate rent collection, track finances, and provide valuable financial insights for owners and investors. For renters, this structure can offer faster response times and well-maintained amenities.

However, the priorities of institutional ownership often center on increasing net operating income. That can mean annual rent hikes or strict leasing terms as long as market demand allows. These properties are run as businesses, and rental strategies reflect that.

In some cases, BTR units are sold to individual investors. Even then, they’re typically packaged with built-in management agreements. Investors purchase turnkey properties that come with tenants, services, and systems already in place. BTR communities offer predictable cash flow for investors, thanks to lower vacancy rates and longer tenant retention. In fact, build-to-rent properties typically have lower vacancy rates and longer tenant retention compared to traditional rental properties, making them attractive for those seeking steady income.

Whether owned by institutions or individuals, the common thread in BTR communities is operational efficiency. These neighborhoods are designed to function at scale, with consistent revenue in mind.

Why Build-to-Rent Communities Are Growing

In 2024, BTR new construction completion reached a record high, with more than 39,000 single-family rental properties completed. That marked a 15.5% year-over-year increase from 2023. As of early 2025, more than 100,000 additional units were already in the pipeline, pointing to even greater momentum ahead. The appeal of affordable housing options is a major driver, as BTR communities help meet the need for flexible and budget-friendly living, especially among Millennials and Gen Z. However, rising interest rates are dampening growth.

Build-to-rent developments are spreading fastest in the Sun Belt and suburban markets, especially in states like Texas, Florida, Arizona, and North Carolina. These desirable locations attract residents due to strong economic growth, amenities, and proximity to job opportunities, which further drives demand for BTR properties and maximizes investment returns. These areas make it easier to build, and recent population growth supports demand for new construction.

Population Growth & Affordability

Population growth is coupled with rising home prices, which have pushed ownership out of reach for many. As a result, we see a rising trend of “forever renters.” These individuals may earn enough to afford a monthly mortgage but lack the savings or credit profile for a down payment.

Renting a BTR home is estimated to be roughly $440 per month cheaper than owning an equivalent home. Build-to-rent communities also tend to attract tenants who prefer the flexibility of renting and may stay for more extended periods—the average single-family renter stays for 5.6 years, which is longer than typical multifamily renters, reducing tenant turnover and associated costs. For this market segment, BTR homes offer a single-family lifestyle without the financial burden of buying, providing comfortable living without large upfront costs and ongoing maintenance expenses.

Investor interest has followed because, with the right capital structure, they offer steady cash flow and appreciation. Higher rents are often achievable in BTR communities due to modern features and amenities, increasing rental income and property value. As the number of renters grows and traditional homeownership rates stall, build-to-rent homes offer reliable returns in a tight housing market. However, high upfront costs and long development timelines remain challenges for BTR investments, as creating a community requires significant capital and several years to complete. That investment appetite is expanding the footprint of BTR developments across the country.

How BTR Communities Affect Local Housing Markets

Build-to-rent developments have added much-needed supply to the rental market, especially in areas with rising demand and limited apartment stock. For renters, this expansion creates options, newer homes, and often better amenities. BTR communities are increasingly viewed as the new suburban starter home for families making the transition from apartments. Census data reveal that 14.3 million households—about one-third of all renter households—have minor children, and the number of renter households with children grew by 1.9 million between 2006 and 2016. BTR communities are designed to create a sense of community, with shared spaces and events that foster social interaction. But the story shifts when you look at the broader housing market.

Impact on Homebuyers and Market Supply

Unlike for-sale homes, BTR units don’t increase the supply available to homebuyers. They’re designed and managed as long-term rental properties, making them a good investment, but are often held by institutional investors for years, if not decades. That means hundreds or even thousands of homes in a region may never reach the hands of individual homeowners. The result is a tighter housing inventory, even as construction activity appears high. Many criticize the growth of BTR properties for their negative impact on housing affordability. However, investors are drawn to the primary advantages and many benefits of BTR communities, such as steady cash flow, higher occupancy rates, rental income, capital appreciation, diversification, and long-term stability in the rental market.

The separation between new construction and available homes for purchase can skew local market dynamics. In neighborhoods where BTR communities cluster, resale homes may see less relief from price pressure because the new housing stock isn’t actually for sale. Supply of rental properties is growing, but that only benefits renters, which can impact entire communities. At the same time, there is a risk of market saturation in some areas, where oversupply could lead to increased competition among properties, dropping rents, and challenges for investors. Understanding market saturation is crucial for evaluating the longevity and profitability of this housing trend.

Neighborhood Impact

From a planning perspective, BTR growth also transforms how neighborhoods function. Owner-occupied homes often carry more community involvement and longer-term residency. A shift toward renter-heavy blocks can change turnover rates, school enrollment patterns, and HOA dynamics. In large enough concentrations, it reshapes the character of entire zip codes.

While BTR communities help meet immediate housing needs, they also raise long-term questions about affordability challenges, access, and who benefits from new development. Buyers navigating these markets should understand how these projects might shape both pricing and the neighborhood experience.

Pros of Buying in or Near a BTR Community

Key Advantages

Here are some of the advantages of buying in or near a BTR community:

• Access to newer construction and modern amenities
  Build-to-rent communities offer more in terms of design and livability with features like walking trails, fitness centers, and stylish landscaping to the neighborhood.
• Potential for appreciation if the area grows
  BTR projects tend to cluster in high-growth corridors. As infrastructure and population follow, nearby properties can benefit from rising values.
• Neighborhoods maintained by professional management
  Properties are typically managed by companies with full-time staff, which can improve curb appeal and community upkeep. Those benefits can extend to surrounding homes.
• Opportunity for long-term stability in well-planned communities
  With consistent investment and oversight, build-to-rent neighborhoods are built to last. These communities typically have fewer empty units and provide steady income for investors, thanks to lower vacancy rates and consistent occupancy. That stability can be attractive for nearby homeowners seeking predictability.
• Lower maintenance costs
  Build-to-rent properties generally require fewer repairs and updates than older rental properties, leading to lower maintenance costs. BTR investments require less maintenance due to new construction and high-quality materials.

It’s important to remember that many build-to-rent communities are only available to renters. Buyers can live adjacent to these developments, but they typically can’t purchase a home within them.

Cons of Buying in or Near a BTR Community

According to the National Association of Realtors, from 2021 to 2024, the share of newly built single-family homes designated as build-to-rent grew from 5% to 9%. This in new development shows that there’s strong investor demand, but it also introduces new considerations for homebuyers evaluating nearby neighborhoods. In fact, BTR communities have gained significant popularity since the pandemic, doubling their share of the single-family housing stock from 5% in 2021 to 10% by 2023. Additionally, build-to-rent homes are typically more expensive than multifamily rentals but offer the benefits of suburban living, such as more space and access to amenities.

Potential Drawbacks

Some of the potential drawbacks include:

• Lower price growth A high concentration of rentals can affect how buyers perceive resale value. Owner-occupied homes tend to appreciate more steadily, while areas heavy with rental properties may see slower price growth.
• Limited control In managed communities, decisions about upkeep, landscaping, or even neighborhood aesthetics often come from property managers or corporate owners, not residents.
• Competition from investors Investors purchasing BTR units in bulk can push up local property values, creating challenges for individual buyers looking for affordable options nearby. The presence of other investors, including both private and institutional players, can further impact pricing and availability, as they compete for properties and drive demand in this emerging asset subclass.
• Less community cohesion BTR neighborhoods tend to have higher turnover and fewer long-term residents. This can lead to a different feel compared to traditional homeowner communities, where neighbors often put down deeper roots.

While owning a house to a build-to-rent development may come with convenience and newer infrastructure, buyers should weigh these benefits against the long-term dynamics of investor-owned neighborhoods.

How BTR Communities Are Changing Buyer Behavior

The growth of build-to-rent properties is influencing not just where people live, but how they think about buying. The appeal of single-family living in BTR communities is significant, as these homes offer the comfort and privacy of traditional single-family houses with the flexibility of renting. This has influenced buyer preferences, especially among young families, remote workers, and retirees who seek a home-like environment without the long-term commitment of ownership.

Shifting Buyer Preferences

First-time buyers, in particular, are shifting their expectations. Many renters in BTR homes get used to new construction, modern finishes, and low-maintenance living. When they decide to buy, they often look for homes that mirror what they’ve been renting. That means they want homes that are:

• Move-in ready
• Updated
• Feature luxury amenities

While many renters view renting in a BTR community as temporary while they save for ownership, it does impact their preferences. This demand puts pressure on existing homeowners to renovate before selling, and it fuels interest in new construction outside of build-to-rent communities.

Buyers are also becoming more strategic. As BTR growth absorbs land in fast-growing areas, buyers have to act earlier or look slightly farther out to find properties for purchase. Some adjust their budgets or broaden their search criteria. Others begin to view renting in a BTR community as a temporary lifestyle step while they save and prepare for ownership.

Investor activity around build-to-rent communities has also affected pricing dynamics. Investors are increasingly acquiring multiple properties within these communities, allowing for portfolio growth and diversification. In competitive markets, buyers may face higher offers from institutional investors or need to be flexible when negotiating for homes in or near high-demand BTR zones. It’s important to note that the build-to-rent model has been around since the 1980s, but it gained significant traction after the Great Financial Crisis. All of these shifts point to a broader trend: buyers who understand the impact of BTR communities are better positioned to navigate changing inventory, pricing, and expectations.

What Buyers Should Ask Before Purchasing Near a BTR Community

BTR properties may look similar to for-sale properties, but the ownership model and long-term goals are different. Before buying a house near one, ask questions to understand how the surrounding community could impact your experience and investment. Here’s what to ask:

• What percentage of homes in the area are rentals versus owner-occupied?
• What is the average turnover rate of renters?
• Are there HOA rules or rental restrictions that apply to the neighborhood?
• How might nearby BTR developments affect home values in the short and long term?
• What amenities or services are shared between owners and renters?
• What is the developer’s long-term plan for the community?
• Who is the property management company? Are they known for quality service and upkeep?

The answers to these questions can help buyers gauge future resale value, neighborhood stability, and day-to-day experience. They can also help you decide if you want to live near large-scale rental housing. In some cases, a BTR development might support your goals. In others, it could lead to buyer’s remorse.

That’s why working with an experienced real estate agent matters. Local experts can identify BTR zones, access data about renter-to-owner ratios, and help you avoid surprises after closing.

How Local Experts Can Help Navigate BTR Markets

The BTR industry is changing how neighborhoods grow, which is something that today’s homebuyers need to consider. Fortunately, there are resources that can help. Local real estate agents help cut through that complexity with insight into what’s happening on the ground.

If you’re considering a BTR for rental purposes, a local expert can help weigh the risks and benefits. Through professional relationships or market research, they likely have information about rental density and growth plans. Furthermore, they can flag restrictive HOAs, high tenant turnover, or property management issues. Before you buy, they can help explain how these factors could affect real estate trends and long term capital appreciation.

Whether you’re looking for a personal home or an investment opportunity, you want professional help. An agent who understands BTR communities can make the difference between a smart purchase and an overlooked risk.

BTR Communities Are Shaping Housing, but Buyers Still Have Options

With the growth of BTR communities, we are potentially witnessing a fundamental shift in the housing market. The build-to-rent concept combines the privacy and living space of a detached single-family home with the amenities and convenience of a professionally-managed apartment building. While these developments add affordable housing to the rental market, they leave the housing market wanting more. Strong returns from cash flow, rent growth, and appreciation are on the table, so investors are doubling down. Investors can gain exposure to the BTR asset class to diversify their portfolios and access a growing segment of the real estate market. Developers are responding. But that doesn’t mean homeownership is out of reach, and it doesn’t mean buyers are boxed in.

In some areas, BTR projects may bring new infrastructure, added amenities, and well-maintained surroundings. In others, they may shift market dynamics in ways that affect pricing or long-term value. Buyers who understand these trends can make stronger, more informed decisions. Property management services and management tools can also simplify financial management for owners, especially at tax time, by providing organized reports and resources.

Every market is different. Every neighborhood reacts in its own way. With the right guidance, buyers can still find strong opportunities and build a future that aligns with their goals.

Considering a home near a build-to-rent community? FastExpert connects you with trusted local real estate agents who know your market and can help evaluate neighborhood trends. Find an agent to guide you to a smart buying decision, whether in a BTR zone or a traditional community.