The Charlotte metro's build-to-rent business is booming
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Courtesy of Northwood Ravin
In this housing shortage and affordability crisis, more local developers are getting into the business of building single-family neighborhoods with a twist: All these homes are for rent.
Why it matters: Built-to-rent housing is another option for people who can't afford a down payment or don't want to make a long-term commitment.
- Plus, developers are building these homes from scratch for the purpose of renting. Many other rental homes are owned by big companies that pay in cash and have strained the housing market for regular buyers.
Driving the news: Most build-to-rent properties have been townhomes as this trend has taken off in the Charlotte market. But Northwood Ravin, a Charlotte real estate management company, is about to open one of the first large neighborhoods with rental single-family homes.
- The properties — The Lodges at Fort Mill and Lodges Huntersville — are managed like a professional apartment complex and come with amenities, such as pools, clubhouses and yards. The homes range in size and types of garages.
- CEO David Ravin says they have to educate potential renters that this is an option.
- "I get calls all the time: 'How much do these cost in both locations? Where's the sales center?'" Ravin says. "And I'm like, 'Well, there isn't a sales center. They're for rent.' That always has people scratching their heads."
- Rent for each of the more than 400 homes is comparable with what you would pay for the same square footage in an apartment, Ravin says.
Zoom in: Crescent Communities opened 76 townhomes in 2023 at its Five Points community in the West End. The Charlotte developer has 750 total units under construction or operating across all its markets, from Greensboro to Colorado.
- Tony Chen, Crescent's managing director for build-to-rent, says they're seeing a lot of demand from parents with young children and downsizers.
- "We're actually seeing a lot of residents who probably would typically look at a two-bedroom apartment, but now they get more square footage," he says.
- The homes offer an option for area newcomers who aren't ready to buy, he says. Plus, home prices keep rising while rental prices are stabilizing.
By the numbers: North Carolina is exceeding the national average for built-to-rent construction. Some states have no projects under construction or planned, Axios' Felix Salmon reports.
- Approximately 4,156 units will finish construction across the Charlotte metro in 2025 and 2026, according to real estate investment firm Berkadia.
- Charlotte is second only to Phoenix for most units in the pipeline. Both are some of the country's fastest-growing areas, where people are moving.