The Build-to-Rent hype is real. One reason? Compelling economics: lower maintenance costs and tenants willing to pay more for new homes with amenities. Sounds like a win-win. But as the sector matures and competition increases, it's important to reexamine assumptions. Do BTR units really command a rent premium over traditional scattered single-family rentals? Parcl Labs got to work in the 🧪 and analyzed millions of data points at the unit level. The results? It may not be what you expect: 🇺🇸 Nationally, scattered site rentals are outperforming BTR on a price per square foot basis. 👀 From near-parity in January 2020, we've seen a growing gap. As of July 2024, scattered rentals commanded a 7% premium over BTR properties. At least at the national level, since 2020, BTR hasn't commanded higher rents vs. scattered sites across the US. National trends are one thing. We've also analyzed 7 key institutional markets where corporate owners have gone the biggest with scattered SFR and BTR acquisitions. The trends at a more local level? Even more 👀. I'll be sharing market-specific price performance data in the coming days... P.S. Want this data for every market? This price analysis is from our "Rise of BTR" report - which is also packed with data on supply, vacancies, and investor activity. It offers a different perspective for anyone operating in the space. DM me or email jason@parcllabs.com for access.
Paul Morgan
3mo
Does the market mix differ much between your scattered vs BTR data points?
CRE Broker, Land/Multifamily specialist, Masters in Real Estate Dev., #DanTheUrbanLandMan, U.S. Army Veteran
3moDo you have any data on whether the turnover rate on BTR is lower than scattered sites? I would suspect it would be less but then again I'd have predicted that BTR rates per sf would be higher. BTR could still outperform scattered sites despite lower rates if their turnover is less.