Could Built-for-Rent Housing Become the New American Dream?
An upcoming picturesque Georgia suburb may be unveiling the new American Dream—single-family rentals. The neighborhood, Beacon Lake Lanier, is 45 miles northeast of Atlanta and features 200 three-, four-, and five-bedroom homes with fenced backyards and sprawling suburban space. It’s a neighborhood fit for raising families and buying in, says Fast Company, but it’s a small share of the 15 million single-family built-for-rent homes popping up across the country. A total of 6% of new single-family homes in the U.S. are built-for-rent housing, according to an August analysis by RCLCO Real Estate Advisors.
Demographic trends, including the forming of families among the 24- to 39-year-old age group, means demand for these homes is expected to grow for the next decade.
“As millennials have moved well into the family formation years, there’s demand for a different type of product. And the ability to afford a for-sale home that provides more space isn’t available to everyone,” says Todd LaRue, managing director of RCLCO.
RangeWater, the developer of the homes in Flowery Branch, is making an aggressive entry into this growing market. With an $800 million investment, the company will be building 15 single-family rental neighborhoods just like Beacon Lake Lanier in suburban areas across the Sun Belt over the next 18 months. While most single-family rental homes are owned by mom-and-pop operators, bigger players like RangeWater and institutional investors are beginning to represent a bigger part of a relatively underexplored sector.