The number of people wanting to rent homes is growing, yet real estate investors hoping to cash in on that trend are finding a tight market for homes available to turn into rental properties.
But Auben real estate agent, Phuong Nguyen says there is a solution – Build-for-Rent homes. He and Auben are currently working on several such developments in the CSRA. The Build-for-Rent (BFR) homes are typically single-family houses or townhomes clustered in a community setting, often with yards and garages.
“It’s the same concept as an apartment complex but it’s single-family,” Nguyen said. “What people want is a sense of community, aesthetics, a cozy and welcoming feel.”
He said these small communities have the atmosphere of a small college town or even hearken back to a small-town, Mayberry-like feeling.
“What’s most appealing for these communities is they’re more the white picket fence neighborhoods,” he said. “It brings them back to those times when people were more friendly. It’s easier to interact with one another.”
Some of these communities have amenities like dog parks and coffee shops. Nguyen compared them to having a similar atmosphere to the Hammond’s Ferry area in North Augusta. In fact, North Augusta already has one such community, LEO at Augusta Commons off Exit 5 (pictured above the headline).
While the American Dream has always been home ownership, Nguyen said that an increasing number of people, especially those in the Millennial generation, prefer renting. They don’t want the headaches of home ownership and the burden of making repairs. An evolving job scene where more people work remotely is part of the change. Renting also provides more flexibility when moving to another city, avoiding the hassle of waiting to sell a home while trying to buy a new one.
Millennials aren’t the only ones with that mindset. Many retirees are looking to downsize and take a break from the cost of home maintenance. The homes are usually on the smaller side – in North August’s LEO community, homes range from 731 square feet for a one bedroom-one bath home, to 1,804 square feet for one with four bedrooms and 2.5 baths.
The communities have a property manager, such as Auben, to handle repairs. The BFR communities are built with ease of maintenance in mind with all units containing the same types and brands of utilities, like HVAC and electrical systems.
“When it comes to making repairs, they know the product,” Nguyen said.
One project Nguyen and Auben are working on locally is large, with nearly 50 homes, expected to be completed around 2025. It takes a lot of capital to invest in a project of that size and Nguyen said those typically are sold to institutional investors or large hedge funds. But some of the smaller projects could entice local investors.
“A lot of these companies are looking in the Southeast because the demand is here because the cost of living is less,” Nguyen said. “But there’s a shortage of supply. Availability is one of the biggest factors.”
That’s why Auben Realty has been proactive in the BFR concept.
“It’s such a new concept but it’s gaining traction,” Nguyen said. “Real estate is an ever-changing market. We focus on projections for where the future is going.”