August 20th, 2022

The Secret to Keeping Your Build-to-Rent Home Costs Low

The key to building any home is prioritizing your budget to get all that you need while tempering getting what you want. When it comes to build-to-rent homes, things are slightly different. You want to choose materials that are inexpensive, but they also have to be durable enough to take the abuse that can sometimes come with rentals. And you want to make it attractive enough to command a high rental price and to reduce vacancies. Here are some tips for how to keep build-to-rent home costs low so that you don’t outprice yourself from the start! These are the tips that we shared with the readers of RedFin.

Prioritize What is “Investment-Worthy”

Build-to-rent homes differ in both emotional and investment-related ways. First, you aren’t going to be as attached to the “wants” with a build-to-rent as you would be if you were planning on living in it for the long term. The key is to prioritize those things that will have the greatest investment return. The first is going to be the LOCATION. Whether you are building purely to rent, as a second home rental, or you eventually want to retire in it, the location is one thing that you want to throw most of the cost into, because it is the one thing that will always dictate overall value no matter what housing prices do.

Don’t Over- or Under-Spend on Appliances

Renters are notorious for being extra hard on homes. One advantage of having a build-to-rent home is that you get a warranty from the builder, and the appliances are less likely to break down and come with repair costs. However, if you buy cheap appliances, they might come back to haunt you. Sometimes you have to temper cheap with inexpensive, especially when dealing with rentals. Sure, you don’t need a chef’s stove, but you also don’t want to buy one that gives out within a year. Also, if you live near the beach, you have to consider things like sand and the heavy usage that a rental brings and buy a quality machine that won’t break down all the time or need replacing quickly.

Durable Materials are a MUST

Marble countertops look great, but they are also easy to stain and ruin. Before you put anything in your rental, remember that there are going to be people coming in and out, probably regularly. With that comes a lot of wear and tear, stains, and fingerprints. Make sure to spend the extra money to invest in hardwood or vinyl versus carpeting that will stain easily. Also, opt to pay a little more for things that are not only nice-looking but will also last. Sometimes when we attempt to save pennies, we end up shelling out dollars. Your build-to-rent might be a rental, but that goes hand in hand with heavy use and not as much care from renters.

Go Inexpensive Where You Can

Things like ceiling fans, fixtures, and hardware are where you don’t have to go high-end. Find products that look nice, but don’t have a luxury price tag. Window treatments in faux wood are just fine; hardware that isn’t custom or from a boutique will do; and fixtures that provide good light and look standard are great. Remember, it is a rental. Even if you intend to retire there or stay there, you aren’t going to care if you purchased a fixture that is $20 versus $200. If you do eventually end up moving in, it is a quick and easy fix to upgrade at that point.

With rental prices on the rise and inventory remaining low, now might be the perfect time to invest in a build-to-rent home. The key to maximizing rental profits, paying down the mortgage quickly, and low maintenance is in the choices you make. Don’t outprice yourself or underspend and end up paying more than you thought. At O’Connor Homes, we are experts at building homes of all kinds. Whether you want a build-to-rent investment home, a luxury home, or a custom home built, we are the industry experts to call. Contact us today to discuss building your new home!