Rent vs. Buy: Is the American Dream Changing

As the housing market evolves, younger generations increasingly opt for renting over traditional homeownership. Multi-family neighborhoods and build-to-rent homes are booming in popularity, responding to the surging demand in the rental market. 

A recent report by Realtor.com reveals that in all 50 major metropolitan areas, renting is now more economical than buying. This trend has led to the creation of vibrant new neighborhoods that are purpose-built with multi-family units to cater to today’s renters’ unique needs and preferences. But what’s behind the growth in built-to-rent housing, and why are so many renters choosing these properties instead of traditional homeownership?

Changing Attitudes Towards Homeownership

The traditional notion of homeownership as a critical piece of the American Dream is being reconsidered, especially among younger generations grappling with today’s real estate market. “Home sweet home” is turning into “home sweet rental” as buyers of all ages are steadily forgoing home ownership. Besides prohibitive costs of ownership, low inventory, and an inability to save for a down payment, there are also so many other reasons many people choose to rent long-term (or forever) — versus buy. 

Avoiding the Burden of Homeownership Costs

The costs associated with owning a home, like property taxes, maintenance, and insurance, can be significant barriers for young adults trying to achieve financial independence. Renting offers a more predictable monthly expense, making it easier for Millennials and Gen Z to budget and plan for their future without being weighed down by unexpected homeownership costs.

The Appeal of Financial Freedom

Unlike previous generations who viewed homeownership as the ultimate symbol of stability and security, today’s young adults prioritize financial flexibility. Renting allows them to sidestep hefty down payments and long-term commitments, freeing up funds for travel, experiences, and investments in their careers or businesses. It’s an approach that allows them to allocate their resources in ways that better align with their values and goals.

Embracing a More Flexible Lifestyle

Another factor driving Millennials and Gen Z to prefer renting is the need for flexibility. In our increasingly globalized world, job opportunities can pop up anywhere, making the ability to pick up and move highly valuable. Renting provides the flexibility to relocate without the hassle of selling a property, making it the perfect choice for young adults who prioritize career advancement and exploration.

Convenience of Living in the Middle of Things

Residents love multi-family rental communities because they offer private, cozy homes while providing access to a host of modern amenities. Think co-working spaces, state-of-the-art fitness centers, play areas, shared green spaces, hang-out lounges, and pet-friendly policies. These conveniences make life easier and create a strong sense of community that aligns with the social preferences of today’s young adults, families, and the aging population.

Investors’ Response to New Trends

Investors are keenly aware of the shifting tide towards renting and are jumping on this opportunity by snapping up single-family homes to turn into rental properties. According to a CNBC report, Wall Street firms have been purchasing hundreds of thousands of single-family homes, capitalizing on the growing demand for rental housing nationwide. For instance, in the first half of 2022 alone, institutional investors accounted for nearly 30% of single-family home purchases in the Dallas-Fort Worth area. 

Dallas-Fort Worth (DFW) is one of the fastest-growing metropolitan areas in the United States. The area’s population growth drives demand for housing, making multi-family properties a lucrative investment. Investors are seizing the opportunity by purchasing existing homes, developing new builds, and acquiring acreage for future projects. 

The trend is particularly noticeable. Many of these new developments feature single-family homes within professionally managed communities, offering a variety of compelling advantages for investors.

Steady Rental Income: Investing in rental properties creates a reliable and ongoing revenue stream. Renters provide consistent monthly payments, which helps investors maintain a steady cash flow. Even during economic uncertainty, the demand for housing remains constant, making rental income from multi-family properties a relatively stable and reliable investment.

High Return on Investment: Multi-family communities often have lower construction costs than traditional single-family homes and typically enjoy higher occupancy rates. This means investors can see quicker and potentially higher returns. Moreover, real estate values generally appreciate over time, offering the possibility of significant long-term gains.

Enhance Your Multi-family Property Today

Whether a young family taking their time before diving into homeownership or an older couple looking to downsize and simplify their lives, multi-family neighborhoods have become a popular trend. With the right landscaping partner by your side, you can take your property’s charm to the next level, creating a welcoming vibe that draws in and keeps residents happy.

We understand the unique needs of multi-family properties and are dedicated to enhancing your outdoor spaces to make them truly exceptional. Having handled a range of similar projects in the DFW area, we offer proven expertise in every development with services such as landscape design, installation, and maintenance, as well as expert hardscaping and playscape solutions. We’re excited to help you create inviting, vibrant outdoor environments that your residents will love and appreciate. Contact us today to schedule a consultation.