Built-for-rent (BFR) demand continues to accelerate, driven by demographic shifts, affordability challenges and a renter profile seeking both flexibility and space. Institutional investors are increasingly attracted to the stable, scalable nature of the BFR sector, especially as single-family detached homes replicate the homeownership experience for a diverse and growing renter base, according to a Walker & Dunlop BFR outlook.
Today’s BFR tenants are choosing to rent not only because homeownership is financially challenging but also because they are prioritizing lifestyle and flexibility. As such, they are attracted to properties that mimic homeownership with features including garages, fenced yards and home office spaces without having long-term mortgage commitments.
BFR properties appeal to a wide variety of demographics. The report said the share of young singles and couples opting for BFR grew from 23% to 35% between 2023 and 2024, while the share of young couples in BFR properties increased from 17% to 29%. The share of mature families renting these properties increased from 22% to 32% between 2023 and 2024 and from 42% to 46% during that period, among mature singles and couples.
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The largest future demand for BFR properties is expected to come from those between 20 and 40 years old. Population growth is outpacing new housing starts, particularly for single-family units, and this gap is fueling demand for these communities, according to the report.
Millennials represent a key demographic for BFR demand. The largest generational cohort in the United States is now entering its prime single-family living years while facing several barriers to home ownership, including student debt, high mortgage rates and scarcity of for-sale housing. They also have shown a preference for flexibility.
For investors, BFR offers the stability of multifamily properties with single-family home characteristics, including stable cash flow, professional management and lower vacancy. Fannie Mae estimates that BFR occupancy is 96%, about 2% higher than multifamily rates, the report said.
Diversified product types are another benefit for investors. The sector includes single-family detached homes, townhomes and horizontal apartments.
“This diversity allows developers and investors to tailor their BFR strategy to market performance preference, site constraints and return expectations,” said the report. “Walker Dunlop's research indicates investor preferences are weighted towards single family detached and townhouse homes built for rent products and acquisitions. Among tracked sales, single family detached units consistently command the highest price per unit as they mostly closely replicate the feel of traditional homeownership.”
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
