Austin remains a booming market for home sales, with the typical price of a home shooting up by more than 30 percent from December 2020 to December 2021. But for those who feel like they’re priced out of the homebuying market, an alternative is gaining ground — built-to-rent homes.
This trend is so popular in the Austin area that the region ranks 13th in the country for the number of homes in built-to-rent communities. That’s according to a new study from rental platform RentCafe, which puts the number of built-to-rent homes in the greater Austin area at 1,390.
The RentCafe study is based on December 2021 data for built-to-rent communities containing at least 50 single-family rental homes. RentCafe performed its analysis with data from data provider Yardi Matrix, a sister company.
Yardi Matrix defines built-to-rent communities as those where at least half of them do not share walls with other homes, or have shared walls but do not have upstairs or downstairs neighbors or have a direct-access garage.
“Cleverly described by some as ‘horizontal apartments,’ communities of houses built for the sole purpose of renting are becoming the hottest topic in residential living,” RentCafe declares.
As such, rents for single-family properties are climbing. In November, single-family rents in the U.S. jumped 11.5 percent compared with the same time a year earlier, according to CoreLogic Single-Family Rent Index.
Shannon Hersker, a director at commercial real estate finance company Walker & Dunlop, says built-to-rent homes don’t appeal to just one demographic.
“There is a misconception that the majority of renters are millennials when, in reality, you have everyone — including college students, empty nesters, families with kids, pet owners, and those wanting to downsize,” Hersker tells RentCafe.
Two other Texas metro areas rank among RentCafe’s top 20 built-to-rent markets:
- No. 3 Dallas, with 4,290 built-to-rent homes.
- No. 4 Houston, with 3,600 built-to-rent homes.
Only the Phoenix metro area (6,420) and Columbus, Ohio, (4,780) metro area outpace DFW for the number of built-to-rent homes.
Drilling down on a specific city-by-city basis, Houston proper outpaces Dallas, ranking second in the U.S. for the number of built-to-rent homes (1,620), according to RentCafe. Dallas proper ranks fifth, with 1,270 built-to-rent homes. San Antonio proper ranks seventh, with 960 built-to-rent homes, and the city of Austin ranks 13th, with 760 built-to-rent homes.
“One of the largest cities in the country in terms of surface area, Houston is able to accommodate large residential communities and respond to the high population influx it’s experiencing as one of the most popular destinations for business relocation,” RentCafe says.
Treviso Gardens, a community of 644 single-family rental homes in Katy, ranks eighth among the country’s largest communities for built-to-rent homes. Treviso Gardens, completed in 2021, is 99 percent occupied, according to Yardi Matrix.