| Historically, construction for multi-unit rental properties has consisted of apartment buildings and smaller multi-family properties in the two to four-unit ranges. However, a new category of multi-unit rental property has been attracting more attention from both renters and long-term buy and hold investors: build-for-rent properties often referred to as BFR investment communities.
A typical BFR property is a community built specifically for renters that want more of a single-family experience, but with the convenience of a professionally managed community with desirable amenities. These communities typically consist of one to three-bedroom attached or detached homes with upscale finishes such as stainless appliances, quartz countertops, high ceilings, and small private yards. These properties include higher-end finishes than a typical entry-level apartment, and typically include in-unit washers and dryers, kitchen islands, hardwood-style floors, high-end lighting, and other finishes normally associated with upscale homes. A BFR community will often include amenities like a swimming pool, tennis courts, dog park, clubhouse or meeting facilities, and a workout/gym facility on site. Renters enjoy the convenience of professional management without the burdens of HOA fees or the responsibility of servicing long-term mortgage debt. BFR neighborhoods provide privacy, quality, convenience, and luxury and meet the need for more space along with a sense of community. These communities fill a growing niche for renters with lifestyle desires that are different than typical apartment renters who normally view apartment living as a temporary housing solution. Renters often lease BFR property for longer periods because they value the upscale finishes and the nearby amenities, and the single-family-home style of privacy. Investors like BFR communities because the renewal and retention rates are higher than a typical apartment community. Also, BFR rent increases have generally outpaced apartments which is another advantage for investors seeking to maximize return on investment. The U.S. Census Bureau estimates that 65% of Americans under the age of 35 currently rent their home. Renting is more affordable than buying a home in 18 of the country’s 25 most populated counties, and in 29 of 44 counties with a population of 1 million or more, including Los Angeles, San Diego, Chicago, Houston and Orange County, California. Where can 1031 exchange investors find BFR investments? One source of 1031 exchange replacement property for investors seeking to acquire multiple assets is SVN | SFRhhub Advisors (www.sfrhub.com). The SFRhub.com is an online marketplace for buyers and sellers dedicated to single-family rental (SFR) and build-for-rent (BFR) investment portfolios of five or more homes. |
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1031 Exchange Webinars We Love Our Happy Customers Our exchange paperwork was flawless and always on time. Thank you. -William T., California Get Real Podcast: Ways To Defer Taxes and Get Better Returns Scott Saunders, [...]
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The purchase of an undivided interest in investment property with a third party, including a child or other family member, who will occupy the property as their principal residence (referred to as the “occupying-co-owner”) can [...]
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Dear Clients and Associates, As we bring 2021 to a close, we have extremely good news! The proposed limitation to cap 1031 like-kind exchange tax deferral was defeated. The 1031 national trade association, the Federation [...]
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Thank you for referring your 1031 exchange transactions to Asset Preservation, Inc. (API) over the years. We appreciate the opportunity to provide excellent service on each and every 1031 exchange. We will continue to work [...]