SFR/BTR homes are high among resident preferences, especially Millennials and Gen Z members. How can property operators attract them into their properties?

Single-family rentals or built-for-rent homes are currently the best performing housing asset class. They make up approximately one-third of the housing market inventory in the U.S., and the pandemic has made single-family units even more desirable. Because of this, demand has increased substantially as people look for safer (less dense) environments and larger spaces where they can fit both their everyday lives and work areas without worrying about maintenance.

The financial aspect associated with SFRs for renters is appealing compared to homeownership—economic volatility persists, and some might struggle with qualifying for a mortgage. Not to mention that many might not be able to afford the loan if offered. There is also the need for flexibility to be able to move in the future, as no one really knows when or if they’ll have to return to the office.

These all attracted investors to SFRs and put developers to work. Presently, the available SFR inventory is limited, but growing. According to John Burns Real Estate Consulting, nearly 12 percent of new single-family construction this year will be for rental properties. According to Yardi Matrix data, there is a significant regional disparity on the properties under construction: More than two-thirds are in secondary markets and the rest in tertiary markets.