The hottest thing in residential development is built-for-rent single-family communities (BFR), and billions of investment dollars are lined up to serve the growing need. Investors seeking yield are having difficulty finding enough built homes to buy, so they are shifting more attention to “ground-up” development of brand-new rental single-family neighborhoods.
The land-rush is intense. Land brokers get 50 calls from groups just now entering the BFR arena for everyone “veteran” buyer, and the demand for land far outstrips the supply of suitable land for sale. A site that is well-suited for built-for-rent will typically get between 10 and 25 offers.
Land brokers dealing in residential parcels traditionally sell to developers and builders who are planning communities in which people buy homes. Now, they are starting to see a growing share who are buying land to build rental single-family communities.
I spoke with my friend Greg Vogel, who runs Scottsdale, AZ-based Land Advisors, the largest land company in the U.S., and he told me that between 5% and 10% of their land sales are for BFR right now, and that the percentage share is growing rapidly month after month. He said he anticipates that percentage will “double or triple in the next couple of years.” Click to read more at www.forbes.com.