Lots of Americans who could buy a home choose to rent instead, notably many with incomes in the $120K-$150K range. They view the higher cost mainly as a convenience fee.
WASHINGTON – Many thousands of Americans who can afford to buy homes choose to rent instead, and they’re in the market for built-to-rent communities that offer luxury features and finishes, amenities and reputable school systems. Renting is also a way to avoid today’s highly priced single-family homes and bidding wars.
Tim Sullivan with Zonda, a real estate research firm, says the premium for a rent-built, single-family home can be 10% to 20% higher than a purchase, as such homes are new and generally part of larger, master-planned communities with amenities including pools, walking trails and playgrounds.
This factor, plus strong demand for product from multiple demographics, is why traditional home builders are increasingly making inroads into the built-to-rent market. For example, BB Living in 2019 partnered with luxury home builder Toll Brothers to develop communities of luxury homes to rent, with more than 20 under development in markets like Tampa.
“A lot of our customers are renting by choice,” says Toll Brothers’ Fred Cooper. “The average income is in the $120,000 to $150,000 range. It’s turned out to be a more affluent customer that’s very interested in renting.”
Clients aren’t limited to empty-nesters, though. Brad Hunter of West Palm Beach-based Hunter Housing Economics says rentals are also favored by “baby chasers” – grandparents who want to be close to their children and grandchildren.
Source: Wall Street Journal (06/03/21) Friedman, Robyn A.
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