How build-to-rent is reshaping U.S. housing for developers and renters

Housing preferences across the U.S. continue to change, but substantial recent bets by institutions show the build-to-rent (BTR) asset class is here to stay.

Many institutions are committing billions of dollars toward placing purpose-built homes in attractive neighborhoods for the exclusive purpose of renting them out.

Developers and investors across the country, meanwhile, are following the trends that brought BTR properties to popularity during the COVID-19 pandemic. As the number of renters increases due to the strains on homeownership, the appeal of BTR properties has evolved and increased.

Developers looking at further BTR expansion are focused on market demand driven by population growth centers and migration trends to the Sun Belt. Assessing demand requires zeroing in on the changing tenant profile for young professionals, the evolving dynamics of U.S. families and the rising number of retirees. 

Real estate investors exploring the viability of BTR properties remain focused on the macro trends affecting yield metrics and on adjusting the risk return within the capital stack—while assessing whether scalability is the answer to maximizing profits. 

Private capital, another key player in the market, continues to pursue opportunistic real estate growth and work with trusted family office capital allocators to ensure that BTR strategies align with goals for liquidity, transparency, tax efficiency and long-term returns.

Build-to-rent market dynamics

BTR properties differ from multifamily and traditional single-family developments. These are purpose-built communities of attached or detached two-to-four-bedroom single-family homes with high-quality amenities, located in close-in suburbs or exurbs of major metropolitan areas. Another differentiating factor is that these properties are rental-only and are ineligible for developer financing even if renters have an option to purchase in the future.

The pandemic drove renter demand for more space, greater privacy and outdoor access—features that remain priorities for renters and are selling points in BTR properties. A new demographic of renters-by-choice—made up of first-time homebuyers stuck in purchase limbo and uninterested in the current market dynamics for traditional single-family homes—is fleeing to BTR communities. 

Millennials in particular find themselves in an affordability crisis amid a supply challenge. But the renters-by-choice movement is rooted in an additional priority: flexibility, which is more important for this demographic than building wealth through homeownership. 

A John Burns Research and Consulting survey of 7,625 BTR residents across the U.S. suggests an increased preference to rent across every age demographic. This trend may reflect the growing maturity of the BTR class, which now has a larger number of established communities and satisfied residents; 36% of respondents in 2024 said they are renters by choice, up from 27% in 2023. 

BTR developers appear to be following these trends as they focus on well-placed properties—in good school districts with other appealing amenities—to produce stable income streams with goals of long-term appreciation.

The impact of property technology on BTR investments

Demand for tech-enabled efficiency is growing in real estate, and the applications to BTR properties align with those that finds the property technology (proptech) asset class so attractive. 

Proptech in BTR focuses on scaling operations and enabling digital property management, with the goal of reducing operating costs while ensuring a high level of service and tenant satisfaction. 

Tenant-first proptech is designed to meet the needs, preferences and experience of renters. It’s a critical facet of BTR, as the goal of these properties is to deliver the comforts and personalization of homeownership without the usual maintenance responsibilities and costs.

Predictive maintenance and smart-home integration have helped operators be more proactive—a mutually beneficial arrangement for them and for tenants. Real-time, user-focused communication platforms continue to improve and bring scalability efficiencies that exceed expectations in BTR communities.

Proptech plays a critical role in tenant retention, helping BTR operators reduce turnover costs and increase tenant satisfaction so that residents stay for a period closer to the typical 48 months of traditional single-family rentals.

Big deals and private capital

The successful closing of the first major loan securitization transaction for BTR development solidifies it as a legitimate real estate asset class. Institutional activity continues to gain steam, validating the liquidity and exit strategies many developers have planned.

Blackstone’s acquisition of Tricon Residential for $3.5 billion is notable due to the robust pipeline of BTR developments in its portfolio. J.P. Morgan Asset Management, meanwhile, is actively investing in BTR developers that demonstrate strong activity in the Nashville and Atlanta markets. Homebuilders struggling to find buyers have flexed into this kind of development; recent earnings transcripts suggest builders are focused on BTR communities as a means of diversifying their business. 

According to the BNY 2025 Investment Insights for Single Family Offices report, 64% of respondents said they planned six or more direct investments in the next 12 months.

This shouldn’t be a surprise, as many family offices leverage in-house expertise. Real estate is often the asset of choice for family offices making direct investments, and optimism continues to grow as interest rates decline and inflation normalizes.

Private capital is poised to reenter the market, as many investors believe that a value reset has occurred and that recent better-than-expected economic data supports growth and tailwinds for real estate investment.

Location and amenities are key to success

BTR developers and investors who have already succeeded in Sun Belt markets are now focusing on higher-cost metropolitan areas to further capitalize on their momentum.

Institutions poised to enter the market may be better positioned to optimize economies of scale with BTR portfolios, driving new efficiencies at a time when proptech adoption still faces hurdles such as high up-front costs and cybersecurity risks.

BTR proponents may find challenges in the future should mortgage rates come down and cost-versus-buy metrics change, but there is real demand for this asset class that interested parties should thoughtfully explore.