At 24, with a roommate and a few others on the way, Luke Janney knew he needed more than his two-bedroom apartment in East Brainerd, but he wasn’t in a position to own it.
“I thought about this [ownership] option, but I didn’t think it was ready,” says Janney, who works in Chattanooga for Knoxville-based Axle Logistics. “Renting seemed like a smart decision to me; it’s definitely more convenient, given my standard of living and with some pretty hectic stuff at work. “
In mid-July, he, Tyler Daniel and Brad McCurdy moved into an indifferent, single-family-style space in Mill Town, a community that rises to the height of the long-abandoned Standard Coosa Thatcher factory.
Janney says he and Daniel used to split their rent of $1,300 per month. Mill Town will charge $2,390 per month, he says, but it’s worth the price.
“With the 3 of us, it probably wouldn’t make a big difference,” Janney says. “And with a third bedroom, being closer to the city center, it was the right thing to do. “
According to rentcafe. com, Janney’s choice of accommodation is incredibly popular. In a December 2021 survey of 3300 tenants conducted through the national apartment search website, 78% of respondents expressed a preference for living in a network of single-family rental homes. The plurality, 29%, of respondents said they opted for a single-family rental rather than an apartment because, like Janney, they needed more space.
Mill Town builder Ethan Collier says indifferent single-family rental homes are proving on many levels.
“They give Americans the opportunity to stabilize their families before they begin the arduous procedure of finding a home [to buy],” he says. “And I think it’s been a generational shift to the extent that other people don’t see assets as the number one way to create wealth, and they think if you can create wealth without having a house, why take on that responsibility?”
Collier says quality of life and flexibility tip the scales for many who decide to hire rather than buy.
“It’s like living in a hotel,” he says. You don’t want to mow the lawn. You don’t want to upgrade the roof or HVAC. I grew up with a father who spent each and every weekend running in a space because something was broken. People don’t want to spend their weekends at The Home Depot and check out their sinks.
“And if you hire here and locate a task in Seattle, you move to Seattle, you don’t have to pay first to sell a space,” he adds.
Collier says the economy of scale is one of the communities built for rent over classic neighborhoods, in which homes are built to be sold.
“The rental structure is built much faster because of the way it’s funded,” he says. “The total network is financed at the same time and all the houses are built at the same time. The subcontractor comes to dig suns, starts without . 1 and does not prevent until he has done the 48, for example.
“In building to sell, you can build six or eight houses at once. Then, once the funds are financed, the builder will borrow more and build more houses,” he adds.
According to knowledge gathered through Yardi Matrix for rentcafe. com, its sister company, there are more than 700 communities nationwide with some 90,000 houses built for rent. According to a one-year record, 6,740 of those homes were built last year, and some another 14,000 are being structured across the country this year.
Hamilton County “reflects the national trend,” says Doug Fisher, executive director of the Greater Chattanooga Home Builders Association. Cannondale Court Townhomes, whose final completion is scheduled for next year, and 3 homes through Collier, Generation Property Management and Texas developer RoseRock – Julia’s Park in Hixson, which is finished; Mill Town and Audrey’s Park, just off Brainerd Road.
Doug Ressler, head of business intelligence at Yardi Matrix, said the trend toward single-family rentals (LICO) began in the wake of the 2008 currency crisis, adding “the collapse of much of the housing market. “
“It’s grown to the point of seeing big real estate investors come into it,” he says.
“There is a massive demand for affordable housing from the customer and a good rate of return from homeowners.
“Demand for SFR has increased the COVID-19 pandemic,” Ressler adds. “Although the economy stalled for a long time, demand for SFR homes skyrocketed as other people moved into larger homes in the suburbs and smaller markets. “
Ressler says single-family home rental operators are positive for the next six months, but adds that with emerging interest rates and the risk of recession, the SFR market “will likely go through a cycle. “
“It’s not a kind of linear progression,” Ressler adds. “The emerging load of cash and structure will lead to a kind of cyclical development. It’s a strong asset elegance and it’s doing pretty well, but, like any other asset, being challenged. “
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