Topic 8 of 8

Build-to-rent specifics

New Construction Investment, Lehigh Valley PA: Northampton, Lehigh, and Carbon Counties.

Build-to-rent, sometimes called built-for-rent, is ground-up construction of single-family homes and townhomes intended to be rented rather than sold to owner-occupants. How it works varies, from institutions holding entire communities to individual investors buying one new home to rent out.

Confirm the specifics for any community you are considering, because investor access and rules differ by builder and development.

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Common investor questions, answered first

Will builders sell new homes to investors?

Some will, and many do not, depending on the builder and the community. In the institutional build-to-rent model, whole neighborhoods are held and rented under a single ownership entity and units are not sold individually. In the individual model, units are sold to small investors who rent them out. Ask the builder directly whether investor purchases are allowed in the phase you want.

Source: Fortunebuilders, What Is Build-to-Rent? How It Works

Are there limits on investor units in new communities?

Yes, in two ways. HOAs and builders often cap the share of units that can be rented, and some federal rules target large institutional investors that own a large number of single-family homes, while individual small investors are generally not subject to those caps. Confirm the community's rental rules and how they apply to your situation before you commit.

Source: HousingWire, Single-Family Investor Restrictions Under the ROAD Act

Can I do a bulk purchase of new construction homes?

Bulk purchases are the norm for institutions buying or developing build-to-rent communities at scale, but some builders or phases may accommodate multi-unit purchases by smaller investors. Negotiate the terms directly with the builder, and be aware that bulk deals come with their own financing and exit considerations.

Source: Fortunebuilders, What Is Build-to-Rent? How It Works

Should I use a property manager for a new-construction rental?

Professional property management is common in build-to-rent because it keeps tenant experience and maintenance consistent across a portfolio. Whether it is worth it for you depends on your distance from the property, your available time, and how many units you hold. Compare the management fee against the value of your time for a single property.

Source: JBREC, New Build-to-Rent Survey

Key takeaways

Investor access varies by builder and community; ask directly.
HOAs and builders can cap the share of rented units.
Bulk purchases are possible but are mostly an institutional play.
Property management makes sense depending on your distance, time, and portfolio size.

The bottom line

Build-to-rent is not one product. Confirm whether the builder sells to investors, review any rental caps, and decide how you will manage the property before you commit.

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Investor Guidance

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