To state the obvious, the booming build-for-rent market is attracting a lot of investment. And while the category shares many similarities with multifamily, for those new to the sector there are also some differences that should be highlighted, starting with underwriting.
In its recent Multifamily Report, Walker & Dunlop pointed out that many of the analyses in income are the same, as are many of the expenses: utilities, insurance, administrative, advertising, and payroll, to name a few.
"It's important to keep in mind that BFR is a relatively new property type, with limited historical data and comparables in areas like expenses and rent," Walker & Dunlop wrote. "This may pose underwriting challenges, depending on your market and lending partner. "
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