Thousands of single-family homes are being built to rent rather than sell, The New York Times reports. More home builders and investors see it as an income-generating investment at a time when the pool of first-time home buyers is shrinking.
The percentage of homes built specifically as rentals was 6.2 percent in 2012 — a record high, according to Census Bureau figures.
“New homes still command a premium with renters,” the Times reports.
For investors, a new home can offer “fewer repairs, lower maintenance, and it looks great to the tenants,” says Bruce McNeilage, the managing partner of Kinloch Partners, a Nashville-based real estate investment company that has been acquiring model homes in the Atlanta area to turn into rentals. “You can get maximum rents, and people are going to stay in them for a while because they’re brand-new.”
However, some home owners say they’re concerned about investors turning their new subdivisions into neighborhoods of renters. They fear it will worsen property values.
Some firms say they try to avoid buying up blocks of rentals in one subdivision.
Source: “Home Buyers Are Scarce, So Renters Take Their Place,” The New York Times 12/4/13