By Ken Abramczyk
For homeowners, relocation to another community or state traditionally meant selling one house to buy another. Not anymore. Would-be home buyers who enter the metro Atlanta market now are considering and leasing homes in build-to-rent communities, a hot trend that has emerged in Georgia, spawned by a low housing inventory, skyrocketing home values and demographics that may want more mobility or lack the funds needed for a mortgage down payment.
Developers noticed this trend and recognized this unfilled need. Among them was Jay Byce, co-founder and SVP of ResiBuilt Homes, which offers several communities for rent throughout metro Atlanta.
“When we started looking at the Atlanta market specifically, we noticed builders were constructing second or third homes or higher-end homes,” Byce says. “We looked at the dynamics and realized that millennials who were apartment dwellers had needs for more room or had a growing family. We thought that market was incredibly underserved.”
ResiBuilt moved forward on the build-to-rent concept but soon discovered the potential market was larger than strictly millennials. “We expected millennials, but they only make up about 40 percent ,” Byce says. “Another 40 percent is recent empty nesters. Those people either want to downsize or move to a hassle-free lifestyle.”
Fortunately in metro Atlanta, those looking to take advantage of rental opportunities have plenty of options.
How We Got Here
This housing dynamic is a remarkable evolution. The foreclosure explosion of 2008 to 2011 increased the housing stock and property availability until the foreclosures leveled out. Construction of new homes stalled. Fast forward to 2019, when millennials began to fuel housing demand as some paid off student loans. They were itching to build their own home equity, and they entered the market with a vengeance. Low interest rates also helped fuel the housing markets for new homes and homes listed for sale.
“But the pandemic hit and that hit the pause button,” says John Hunt, principal of MarketNSight, which researches housing and mortgage data and trends. In May 2020, there were 2.7 months’ supply of available homes to purchase, but that fell to 0.7 of a one month supply in May 2021, according to MarketNSight research. With 0.7 months’ supply, inventory “might as well be zero,” Hunt says. These potential home buyers turned to rentals because they could not find housing they liked or could afford to purchase. With values continuing to increase and housing inventory so tight, Hunt explains, “Housing is in a vacuum right now.”
Building to Rent
When it comes to the build-to-rent arrangement, Byce says the concept follows the same logic as the lease agreement for cars. “The product we build is the same as what homeowners buy,” he says. “It is an option, much like a car lease was created to access a car.”
Developers are creating build-to-rent communities to accommodate consumers’ needs by adding flexibility with less home maintenance, yardwork and landscaping. What’s more, Byce notes, “We put all the same amenities in our homes as we do for home buyers—we just give them an opportunity to lease instead of buy. We handle 100 percent of the maintenance of the homes, and we handle 100 percent service of the homes. It’s an easy lifestyle choice for residents.” What’s more, renters don’t have to worry about closing costs that accompany home purchases or homeowners’ association fees and taxes.
According to Hunt, zoning often requires developers to build larger homes, so renters often can obtain four-bedroom, 2,400-square-foot homes in highly coveted and convenient locations. “You get more options with space for your family,” he says. “And just like the builders, the developers of build-to-rent are moving further out to keep the prices down.”
Mobility is another consideration in a rental home. “People tend to stay in homes for four or five years, which is about the same for renters and homeowners,” Byce says. “That was one of those trends we saw that indicated we need to bring this concept to market.”
In late April, ResiBuilt’s homes ranged in price from $2,000 a month for townhomes to $2,300 for single-family detached homes, while larger homes rented for $2,900 to $3,000.
“The most important thing for us is that the product is exactly the same as they buy,” Byce concludes. “We’re not trying to be a dominant factor in the housing market; we are simply an option for people to have the lifestyle they want.”
Metro Atlanta’s Build-to-Rent Communities
Build-to-rent communities are thriving throughout metro Atlanta. Don’t miss these outstanding options from ResiBuilt as you begin your own search for the ideal rental property.
Chase Landing, Loganville
This community offers single-family homes along Big Flat Creek and is located near Loganville’s downtown. A variety of three- and four-bedroom homes are available, and the community offers amenities including a community clubhouse, an outdoor pavilion, a fire pit and more.
Overlook at Mill Creek, Dacula
Located just off of I-85, Overlook at Mill Creek features a mix of single-family homes and townhomes, which boast an array of interior amenities like stainless steel appliances, granite countertops, hardwood floors and more. The community also features a community pool, recreation area and playground.