Jason Lewis, developer of Dominic Row, poses for a portrait at new townhome development in Denver on Thursday, March 21, 2024. Lewis, developer of Dominic Row, took what was an abandoned medical building and small duplex and created 18 new townhomes that are around 1,500 square feet. Jordan and Taryn Bennett took advantage of low mortgage rates during the pandemic to snag a condo in the Uptown neighborhood. But they need more space with a dog in residence and a child on the way.
Households unable to buy may prefer to live in a community under professional management with other renters, which build-to-rent offers them. “Forever” renters looking for more space and privacy than what can be found with apartments are a core market for build-to-rent. Given its location, Dominic Row has proven popular with homeowners relocating from out-of-state who need a landing place, Lewis said. Build-to-rent communities also appeal to seniors who want someone else to handle the yardwork and maintenance but aren’t ready to sacrifice the space they had owning a home.
FirstBank can provide construction-only loans that roll into a mortgage with a different lender once a project is built or a combined construction and permanent loan with a single closing. Markovich notes the developments are trying to fill the gap created as more renters get priced out of ownership.
“The cost to buy a home is exceedingly getting higher and higher,” said Doug Ressler, manager of business intelligence with YardiMatrix, which provides the data RentCafe uses in its reports. Build-to-rent communities can offer renters something similar in size to an entry-level home — around 1,400 square feet with three bedrooms, a yard, and a driveway — at a lower monthly payment than purchasing, Ressler said.Bennett’s situation exemplifies how the math works in renting versus owning. A mid-point or median home in the Highlands neighborhood costs $885,000, according to real estate brokerage firm Redfin.
Build-to-rent homes also offer builders a way to keep their crews and contractors busy when the for-sale market slows, reducing some of the cyclicality associated with home construction.Supporters of build-to-rent argue the communities offer households priced out of the purchase market an alternative.