The most recent reports on the economic statistics in July indicate a mild drop in the inflation numbers. However, it has also highlighted a considerable drop in the average income of US households. Wages are falling, Inflation is rising, and Bills are soaring.
The soaring cost of living has precipitated a housing crisis in the United States as an increasing number of people are unable to buy a house outright, especially the Millennials and Gen Zs. This has led to a spike in the demand for single family rental homes as well as multi-family rental homes.
At such times, build-to-rent real estate investments – be it private equity funds or an actual build-to-rent property itself, stand out as a prudent investment. For new investors, this asset class stands out as the most promising when it comes to generating consistent yields as long term passive income.
Historically, quality investments in the real estate sector, be it private equity real estate funds or an actual build-to-rent property, have always delivered good and consistent yields irrespective of the state of inflation, be it the Southwest real estate market or across all of the United States.
Why does it make sense to invest in build-to-rent?
In the current scenario, strategic investments in the real estate sector are not a challenge. However, there is a need for a paradigm shift in how such investments are routed to the right segment of real-investment infrastructure.
One of the contemporary areas of infrastructure development, wherein quality investments can reap potential benefits is the “build-to-rent”. Technically “build-to-rent” can be defined as a systematic investment wherein the reputed property dealers and builders engage in property development that is exclusively available for the public to rent.
How does build-to-rent address the US housing crisis?
Be it Bloomberg or any other survey, everyone has declared there exists a housing crisis in the United States. The United States is falling short of 1.5 million houses for people to stay in as of today, per a White House briefing. The global figures are even more stark – the World Bank estimates that 1.6 billion people would be impacted by a housing shortage by 2025!
When build-to-rent housing communities are developed, it provides a ready solution for those engaged in house hunting. They can move in quickly and have a place for themselves. It becomes even more attractive when a real estate firm makes a prudent decision to develop such an asset in a location which has good transport links, provides amenities and becomes a social connector.
In the foreseeable future, the United States must be able to solve the housing crisis in hand and prevent it from becoming bigger than what it is.
The development of build-to-rent homes provides a succor to people in need of houses and uplifts the entire community in which they are developed. This is simply because small businesses can thrive when they have a readily available customer base to work with. A steadily improving business means more people get jobs.
Build-to-rent is a win-win for tenants as well as owners of such properties. Longer tenancies, an assured rental income which is a steady source of passive income and adds to wealth generation makes it an extremely prudent decision for those who want to invest their monies in a safe and high class asset.
How do private equity real estate investment firms help?
Often, build-to-rent properties are developed in strategic locations based on the demand from the salaried class and middle-class public are high. Ascertaining the right areas to develop build-to-rent assets is only possible when prudent investment decisions, strategic acquisition acumen and foresight of what could happen in the future is contemplated by private equity real estate investment firms.
33 Holdings as a private equity real estate firm brings in the right mix of an astute acquisition strategy, property management and rehabilitation (vertical integration capabilities) backed with deep insights of judicious financial asset management.
For potential investors, the right set of investments in build-to-rent properties can be a long term, risk free, consistent source of passive income.
The 33 Holdings team can be reached via email (ir@33holdings.com) and phone (678.824.4508).
