How Build to Rent Can Keep You Competitive

In the shifting housing market, builders could take advantage of home-buying trends. Here’s why Build to Rent may be able to help you stay competitive in a shifting market.

Build to Rent Is Bucking the Trends

It’s no secret that affordability has been a nightmare for buyers. But demand for single-family space refuses to wane.

For these reasons, Build to Rent has been bucking the trends despite affordability challenges.

A key driver behind the growth of Build to Rent is related to the concept of the American Dream of owning a home. Though many Americans still believe that owning a home is the very definition of the American Dream, affordability has made it extremely difficult to achieve that dream.

Build to Rent homes may be a middle ground between achieving the American Dream and addressing affordability issues.

Strong Build to Rent homes provide many of the experiences of homeownership:

• A safe place to live (and raise a family/grow a career)
• A sense of community
• Space

And in many cases, Build to Rent homes provide a greater sense of security in terms of living spaces. That’s because many Build to Rent homes have a much lower turnover rate, which not only helps buyers feel more at home in their home but also increases the sense of community. Each of these factors could be a great selling point for builders in the Build to Rent space.

Build to Rent Is Proving to be a Strong Investment

In addition to fulfilling some of the demands prospective tenants have, Build to Rent comes with other benefits that make it a potentially strong investment.

First, Build to Rent is increasingly popular in places like the South, West, and Southwest. As more people move into these areas, Build to Rent communities provide an option for those who can’t quite afford to own but desire a step up from apartment living. This is a strong space for capitalization.

Second, Build to Rent tends to attract tenants who are right on the cusp of homeownership. Additionally, Build to Rent communities are commonly run by professional property managers. As such, the tenants who occupy Build to Rent homes commonly take good care of the homes they rent, which is a good way to boost your reputation for building quality homes.

2-10 Can Help Protect Your Potential Profits

Investing in a new space comes with inherent risks. 2-10 is the industry leader in structural warranty administration, and a big part of that administration is risk management.

There are several ways 2-10 helps protect potential profits within the Build to Rent space.

Reducing long-tail risks

The average structural defect costs between $75,000 and $125,000 per claim, which doesn’t include the time it takes to find the right experts to address the claim.

A 2-10 New Home Warranty transfers the cost of qualified defects off the builder’s books. It also provides access to the right experts to mitigate issues while strengthening exit strategies for both builders and investors. That can help reduce the likelihood of surprise costs cropping up down the line.

Providing risk management solutions

2-10’s Dispute Avoidance and Mitigation Team has a success rate of over 99%.* We’ve also fielded over thousands of homeowner callbacks, which helps reduce the time and money builders spend addressing these callbacks. And with Front Line Warranty Service, builders can offer outstanding post-closing customer experiences.

Offering third-party validation

Investors and tenants want to know that their Build to Rent home and community are top notch. There’s simply no substitute for third-party validation in this regard. When the industry leader in structural warranty administration can go to bat for the quality of your homes, it adds more credence to your reputation of quality workmanship.

*Excluding New Jersey