This is the first I've heard of the term, but I just read an article from Houston Business Journal that was talking about Camden properties ( big apartment developer) just bought land in the Richmond area to build 180-200 single family homes and duplexes.

From the article it sounds like this isn't a new thing going on and there are already a ton of communities like this across the country. As well as a handful in the planning stages around Houston like in Cypress and Atascocita.

I'm torn between this, on one hand it's basically like apartment complexes but now people have yards, and that's fine. On the other hand if this is the way things are going and developers start going this route they are literally starting to keep younger first time home buyers out of the market and it proves that my feelings on we're turning into a rental nation(mostly the middle class and below) are turning true.

This comment in the last paragraph says it all

Quote:

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"The trend is not expected to slow down anytime soon, as low single-family housing inventory and rising home prices are making it more difficult for young families to afford to buy a house"

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They're literally preventing low single-family housing inventory from rising by building communities strictly for rentals and not communities of low single family housing.

I'm not a real estate expert, but these developments seem like disasters in the making -- even beyond the idea of damaging the affordable housing market.

Camden seems to have a strong reputation as an apartment developer/manager, so maybe they will do a good job of proper leasing and long-term maintenance. But I'm guessing lots of these places will become rundown eyesores within a decade.

A realtor friend of mine told me this was because the younger generation folks want a house, but not the responsibilities of homeownership. So, basically, this is market-driven. There's demand for nicer housing without the commitment.

I hate it, but it seems to be a thing.

GeographyAg said:

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A realtor friend of mine told me this was because the younger generation folks want a house, but not the responsibilities of homeownership. So, basically, this is market-driven. There's demand for nicer housing without the commitment.

I hate it, but it seems to be a thing.

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That sounds like some lame justification the developers are using to yes, stick younger generation folks into a rental class.

There is more than enough demand from the younger generation to fill the current supply, multiple times over.

Corporate apartment management is often horrible. Slow to respond, cheapest repairs possible. Hopefully for these homes they do better than apartments. In some ways it may lower the cost to rent a home because of large lawn care accounts and full time maintenance staff that a community of individual owners and landlords and renters would not have. But now rent goes up every year, unlike a mortgage.

Property tax goes up so in essence your mortgage does go up. Rents follow

So how does someone building homes to rent keep you or anyone else from building homes for sale in the next field over?

Build-to-rent seems more like something to blame at this point than a real cause of inventory issues.

From what I can find out, they still make up a very small % of total new inventory.

Is the target market people priced out of owning or is it people that like the idea/flexibility of renting but don't want to be in an apartment?

Diggity said:

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Build-to-rent seems more like something to blame at this point than a real cause of inventory issues.

From what I can find out, they still make up a very small % of total new inventory.

Is the target market people priced out of owning or is it people that like the idea/flexibility of renting but don't want to be in an apartment?

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Drive through one and you'll see it's the family that can write a $1600/month check but have a credit score of 400.

Ducks4brkfast said:

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Diggity said:

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Build-to-rent seems more like something to blame at this point than a real cause of inventory issues.

From what I can find out, they still make up a very small % of total new inventory.

Is the target market people priced out of owning or is it people that like the idea/flexibility of renting but don't want to be in an apartment?

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Drive through one and you'll see it's the family that can write a $1600/month check but have a credit score of 400.

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right...so is the worry that these builders are no longer going to build product for people that are willing and able to buy?

I just see it as another offering based on market demand. Developers like it because they can get larger returns, (but they do have to hold/manage the properties). Renters like it because they don't have to deal with a shared wall and parking garage. Maybe the neighbors don't love it but neighbors don't love KB starter home communities either...which is the same demographic these folks are targeting.

The one upside I can think of is that having a central management group that is in charge of lawncare and exterior aesthetics should prevent the neighborhood from decaying, like I see in a lot of these entry-level price points that get rented out.

It just seems like I've seen build-to-rent and "corporate" property ownership singled out as large reasons for homes getting more expensive, when artificially low interest rates coupled with historically high supply costs appear to be the real culprits.

Ducks4brkfast said:

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Diggity said:

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Build-to-rent seems more like something to blame at this point than a real cause of inventory issues.

From what I can find out, they still make up a very small % of total new inventory.

Is the target market people priced out of owning or is it people that like the idea/flexibility of renting but don't want to be in an apartment?

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Drive through one and you'll see it's the family that can write a $1600/month check but have a credit score of 400.

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Erebody out there tryin to look rich instead of being rich.

Carnwellag2 said:

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TxAG#2011 said:

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GeographyAg said:

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A realtor friend of mine told me this was because the younger generation folks want a house, but not the responsibilities of homeownership. So, basically, this is market-driven. There's demand for nicer housing without the commitment.

I hate it, but it seems to be a thing.

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That sounds like some lame justification the developers are using to yes, stick younger generation folks into a rental class.

There is more than enough demand from the younger generation to fill the current supply, multiple times over.

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seems like that is the trend.

younger people want LESS possessions and want to be MOBILE. buying a house is the opposite of BOTH

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Do they? I am a "younger" person and I don't know many that fit in that category. Maybe ths younger 20's crowd but they weren't in the buyer pool anyways.

But it's not like younger people have much choice, they can't compete with these all cash offers from out of state and PE buyers.

Everyone needs to quit thumbing their nose at the every day American. Most people forget this community is generally middle to upper middle class and has a college degree or higher.

The fire fighter/teacher combo (or the oilfield welder/vet tech or chipotle manager/day care worker, whatever you can think of that doesn't make a combined 150k/year) need a place to live. Without SF rental homes, the ability to live in a community where they can raise children is hard. Some people just don't want to live in an apartment - can't blame them.

With home prices inside cities or nice suburbs being so high and inventory still being low, it's hard for people to come up with $60k+ cash for a down payment. It takes YEARS of saving significant amount of cold hard cash to get there. Hell, I bought at 27 and it felt like it was the hardest thing ever to save up $25k while still paying rent to live in Dallas.

The $200k starter homes just don't exist anymore - at least not in decent quantities or good areas.

These communities are filling a need with smart money backing them(I'm invested in a few through REITs).

ChoppinDs40 said:

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Everyone needs to quit thumbing their nose at the every day American. Most people forget this community is generally middle to upper middle class and has a college degree or higher.

The fire fighter/teacher combo (or the oilfield welder/vet tech or chipotle manager/day care worker, whatever you can think of that doesn't make a combined 150k/year) need a place to live. Without SF rental homes, the ability to live in a community where they can raise children is hard. Some people just don't want to live in an apartment - can't blame them.

With home prices inside cities or nice suburbs being so high and inventory still being low, it's hard for people to come up with $60k+ cash for a down payment. It takes YEARS of saving significant amount of cold hard cash to get there. Hell, I bought at 27 and it felt like it was the hardest thing ever to save up $25k while still paying rent to live in Dallas.

The $200k starter homes just don't exist anymore - at least not in decent quantities or good areas.

These communities are filling a need with smart money backing them(I'm invested in a few through REITs).

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This. Blue star for you.

ChoppinDs40 said:

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TxAG#2011 said:

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Isn't that the entire point? They can't buy in these communities because they are getting gouged out?

20% down on a 400k loan is about $1,500 per month so maybe $2,500 after adding in taxes/HOA. Renting a home like this, is probably at least double, or more likely triple.

The people you just described can't afford something like this either

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Rent is not linear in terms of homes when you move passed the 300k mark, in my opinion.

No way someone is charging 3x $2,500 ($7,500!!!) to rent a $400k house. The "1% rule", which no one really gets in this market in this area, is $4k a month....

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no kidding. what kind of nonsense is this?