not build entire subdivisions with nothing but Build-to-Rent? So far, it’s worked. We’ve con- ceived and built several Build-to- Rent properties. The concept has caught on with Wall Street Investors, as we’ve sold entire Build-to-Rent portfolios to REITs and hedge funds. We saw this trend coming a few years ago because we kept our ears to the ground regarding the latest trends. What’s coming in the next few years that will create other opportunities for creative real estate investment strategies? For one, Covid-19 is getting people to move out of big cities in search of more open space. Work-from-home has created a much more mobile society, where employees can often work from anywhere. And those Millenni- als? More marriages and more kids are highly likely. How will this play out? To me, it adds up to more suburban sprawl, with four-bedroom houses in states with little to no income tax. New Yorkers are likely to migrate to Flor - ida and Los Angelinos will probably continue to roll into Las Vegas. What strategies will emerge? Time will tell. •
was a pool of potential renters who could become buyers in a relatively short time. At the same time, foreclosures were creating a glut of unsold inven- tory in Atlanta. Any good investor will tell you, buy low, sell high is always the goal. We took a risk, buying sev- eral homes in the Atlanta area, but the price was right. We married these two trends together—renters who eventual- ly could buy paired with low-cost homes that would likely go up in value. Working with our tenants to ultimately become buyers was the best solution for us both. They got in a good home they could eventually own. We created positive cashflow on our investment with people who could eventually afford to buy us out. As the old saying goes, we took lem- ons and made lemonade. Our second creative strategy, Build-to-Rent, is another outgrowth of following emerging macro trends. Millennials (born between 1981 and
1996) are now the largest cohort out there, with some 72.1 million people as of 2019. This generation is saddled with most of the nation’s $1.6 trillion in student loan debt. The average student loan debt month- ly payment is $393 a month and it’s holding many Millennials back from buying a house. At the same time, they are get- ting married and raising families, albeit at a slower rate than previous generations. Three in 10 Millennials live in a household with a spouse and child. That’s a lower percentage than Gen Xers at the same age (4 in 10), but it’s still more than 20 million people coming into prime family raising years. People raising families want yards. And four walls. And extra space. Basically, they don’t want a tradition- al apartment. Raising a family, combined with high levels of student debt led us to one conclusion. Single-family rental homes would be a huge market. Why
Bruce McNeilage is the managing member and a co-founder of Kinloch Partners and a partner in Harpeth Development.. He is a passionate
advocate for housing affordability and homeownership, and invests heavily in Nashville, Tennessee, as well as throughout the southeast. Learn more about his projects, including single-family built-to-rent communities and the Solo East and North condominium projects at www.Kinlochpartners.net.
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