What is BFR?

In the world of Build for Rent aka BFR we have several acronyms with overlapping similarities:?

Build for Rent BFR, Built to Rent BTR, Single Family Rental SFR, and Single Family Build to rent SFBR.? Really, these 4 groups are associated to 2 macro categories of SFR and BFR.

For now, we are going to focus primarily on BFR.??

So what is BFR and how does it differ from SFR???

BFR - is a whole neighborhood or collection of homes owned by one company all rented, no owners. While SFR is scatter-site homes, meaning random single homes in any given neighborhood owned by various property groups, investment groups, or mom and pops who rent out their properties.

A key BFR differentiator is that these properties were built with the intent to rent.? With that comes a couple of fundamental differences in the asset itself, the most advantageous of these differences being amenities.? Amenities are a core feature catering to an up and coming generation of renters, people who prefer to rent instead of own throughout their 20’s and early 30’s.

BFR, while in its infancy, actually began back in the 1980’s in the Arizona markets.? Today, BFR is targeting a millennial / gen z demographic but back in the 80’s when it initially began it was targeting retirement lifestyle communities and areas of the country where people move to at this phase of their lives.? As BFR grew throughout the 90’s and early 2000’s it maintained a focus on what is a traditional multifamily build / apartment styles we see today.??

All of this changed when we hit the housing crisis in 2008. Not too dissimilar from COVID, a big crisis either kills or accelerates businesses and with BFR in mind, we saw an acceleration.? We saw a small acceleration after the housing crisis and are seeing a big acceleration now since COVID.?

Why is BFR booming?

There are a couple of compounding factors that I’ve already alluded to earlier.? The main one is generational behavior shifts.? The average mid 20’s to early 40’s person lives what we shorthand as a “subscription lifestyle.” They rent most objects that we previously would have owned.? Financing an iPhone over 12 months, leasing a car or relying on rideshares, pay monthly for Netflix/Hulu/etc., subscription based grocery and food services, etc. We see this macro trend emerge culturally but it is most present in large metropolitan cities, which keep getting bigger and bigger as they absorb surrounding suburbs and burrows.? The cost of ownership is out of reach for so many people but the ability to rent is possible.?

This macro trend was already well in motion prior to COVID and since COVID we are seeing additional trends that compliment a BFR lifestyle.? Working from home or remote work is a major factor contributing to people moving into new areas to try on a new city for a shortened timeline. Plus, in hot markets like Texas, Arizona, Florida, the Carolinas, etc., the cost of buying a house right now is just too high and the market is unstable enough to scare off most first time home buyers.?

The icing on the cake here, from an investors perspective, is who doesn’t want to lean into an asset class that is catastrophe positive? This logic is what will lead to more and more BFR communities popping up across the country and I’m so excited to watch this asset class develop.

Fortunately, the plotr team is looking at this real-time data all day everyday so we are on the frontlines of digesting these trends and reporting on the data that affects the future of BFR.??

So what does the future of BFR look like? We can say for certain that in the next decade we are going to see massive growth in this space - a pouring in of capital and investors looking to take advantage of the ROI this asset class produces.?

The future of BFR is truly exciting and we are thrilled to play a role in shaping the future of it. For more information visit www.getplotr.com.