A primer on the suburbs’ newest housing option: build-to-rent
If you feel like you recently have seen more signs in the suburbs for new single-family or townhouse rentals — or built-to-rent (BTR) homes as the real estate industry calls them — you are not alone.
Once found primarily in the Sun Belt, BTR homes have been growing in popularity in the Chicago area since the pandemic.
You can find them in suburbs from Antioch to Oswego. In fact, the number of Chicago-area BTRs grew 76% between 2017 and 2022, according to RentCafe, making the area a top 20 metro market for this new category of housing.
But what exactly are BTRs and why have they become so popular?
For starters, people have been renting single-family homes and townhouses for decades. But historically this involves renting directly from existing homeowners, who usually are renting their somewhat dated homes for passive income and are not professional property managers.
By contrast, today’s new built-to-rent homes typically are constructed in maintenance-free planned communities of 50 or more homes with the latest energy efficient building techniques and stylish interior finishes.
Most BTR communities are developed by experienced real estate firms and managed by professional teams, so residents can rely on property managers to walk their dogs, water their plants when traveling, shovel show, assist with repairs and more. These new BTR communities also offer a range of amenities, from pools and clubhouses with coworking and entertainment areas to wellness offerings and pet and landscaping services.
Why are BTRs growing in popularity?
Offering what many consider to be the best of both worlds — the privacy and size of a single-family home with the maintenance-free lifestyle and flexibly of renting — BTRs were popular first as age-restricted (55+) communities.
During the pandemic, BTRs got a boost when more people moved out of urban cores due to remote work. Now, driven in part by the combination of low for-sale housing inventory and relatively high interest rates, BTRs have continued to pick up steam with everyone from downsizers and divorcees to growing families and young professionals. In fact, one quarter of BTR properties were built in the last three years, according to CBRE.
Depending on the community, some BTRs live even more like traditional single-family homes with basements, two-car garages, extended driveways for more parking space, and private yards.
How does cost compare with buying or renting?
Although monthly BTR rents vary, they typically are lower than a mortgage payment for a comparable single-family home, especially at today’s interest rates. Home at Ashcroft, a 178-unit BTR single-family community in Oswego, has three-bedroom homes starting at about $2,500 per month.
In many BTR communities, the monthly rental fee also covers interior maintenance for general wear and tear not caused by the tenant, such as broken windows or appliance repair or replacement.
Some properties also charge a monthly or yearly fee in addition to rent to cover amenities, ongoing building maintenance and services such as lawn care and snow removal.
How can I learn more?
Spring is an excellent time to visit an open house. You can either tour different BTR communities yourself to comparison shop, or work with a trusted Realtor who is well-versed in BTRs. Also, while Home at Ashcroft has two models open daily and a leasing/property manager onsite to answer questions or help guide you through the models, other communities offer self-guided tours.
BTRs have carved out a niche in the Chicago-area market, one we only expect to grow as more people learn about the concept and its many advantages.
• Anthony Tiritilli is the president of development at Lynd, a national real estate and property development firm with a portfolio of rental properties that includes Home at Ashcroft in Oswego.