Though rental demand is strong, the biggest profits are still in building single-family homes that are for sale.
John Burns Real Estate Consulting found a few scenarios where building for rent is a viable strategy. Builders should target popular relocation areas, where newcomers prefer to rent before buying, and they should consider for-rent communities when for-sale demand is weak.
The developer might also choose to increase cash flow by selling a for-rent parcel to someone who won’t build homes that compete with the for-sale homes in the community. This strategy generates cash and brings future homebuyers to the community.
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