The Next 20-Year Boom

Why Single Family Rentals and Build-to-Rent Are Real Estate’s Most Undervalued Assets

The Great Shift in Housing Demand

The American Dream is no longer one-size-fits-all. For decades homeownership was the milestone that marked financial success, but today’s priorities have shifted. Families and professionals still crave space, safety, and strong communities without the burden of a mortgage, maintenance, or immobility.

The Perfect Storm Creating Demand

Three forces have collided to create unprecedented demand for quality rental housing:

Economic Reality: Surging interest rates and rising home prices have put homeownership out of reach for millions. In 2023 alone, mortgage rates doubled while average home prices hit record highs.

Lifestyle Evolution: Post-pandemic life changed how people view their homes. Remote work unlocked geographic flexibility. Young families now prioritize space, quiet neighborhoods, and better schools over ownership obligations.

Demographic Shifts: Downsizing Baby Boomers increasingly prefer the ease of renting without sacrificing comfort or dignity.

The Sweet Spot Solution

Single Family Rentals (SFR) and Build-to-Rent (BTR) communities have emerged as the perfect answer, offering the privacy and space of homeownership with the flexibility of renting. The data shows this isn’t a trend it’s a permanent re-balancing of American housing preferences.

Smart investors who understand this moment aren’t just buying properties. They’re positioning themselves ahead of a generational real estate transformation that’s reshaping how Americans live.

📊 The Affordability, by the Numbers

💡 Key Insight: True BTR assets are fee-simple lots (individually platted) like SFR properties, offering investors multiple exit strategies and value capture while serving growing demographics with higher retention rates and premium rents.

What Are SFR & BTR? Why Are They Different?

At a glance, Single Family Rentals (SFR) and Build-to-Rent (BTR) may appear similar. Both offer standalone or semi-attached homes designed for long-term renters who value space, privacy, and stability. Both are a world apart from traditional apartments offering residents the comfort of no neighbors above or below, and often private or semi-private yards. These key differences often lead to tenant’s feeling at “home” which results in lower turnover and higher occupancy.

But under the surface, they represent two distinct assets each with its own profile, advantages, and operational realities.

Single Family Rentals (SFR)

SFR refers to existing homes or newly built homes that are leased to tenants. These may be spread across different neighborhoods (scattered-site) or grouped in small clusters. Most inventory is acquired one property at a time or as part of a small portfolio making it more accessible for individual investors.

Build-to-Rent (BTR)

BTR refers to communities of homes with continuous lots built specifically for long-term rental. These properties often include professional management, uniform construction standards, and shared amenities similar to apartments, but in a horizontal layout. BTR asstets

Why This Asset Class Is Undervalued?

If SFR and BTR are so attractive, why aren’t they more widely owned? Simple, they didn’t fit traditional real estate investment categories.

For decades, institutions favored large multifamily properties for their scalability and remote management ease. SFR assets can be operationally complex, and non-uniform so they were largely ignored.

The Great Financial Crisis changed everything. With home prices below replacement cost, Wall Street could no longer overlook these exceptional returns. Now perceptions are shifting rapidly, and BTR is solving the fragmentation challenge by delivering scalable SFR experiences with operational efficiency.

SFR and BTR remain undervalued due to:

• Low Institutional Ownership: As of 2024, institutional investors own less than 5% of the 17 Million Single Family Rentals in the U.S.
• Operational Complexity: Managing scattered-site properties requires sophisticated logistics
• Perception Lag: Many still view these as less prestigious than traditional multifamily or simply don’t understand the asset class

This disconnect between growing demand and limited institutional ownership creates unique advantages for savvy investors. Currently SFR and BTR properties often offer higher cap rates than traditional multifamily assets. As institutional interest increases annalist expect cap rates to compress and significant value appreciation.

Institutional Investment Surge

• Blackstone acquired Tricon Residential for $3.5 billion in 2024, massively expanding its SFR portfolio
• J.P. Morgan Asset Management launched Laseter Development Group in 2025, targeting BTR communities across the Southeast
• Brookfield Asset Management raised nearly $6 billion in early 2025 for real estate investments, with substantial allocation to SFR and BTR properties

Key Performance Drivers

In key Sunbelt markets, SFR and BTR homes have achieved annual rent growth between 4–8% in stabilized portfolios, outperforming Class A multifamily in several metros. This resilience is attributed to constrained housing supply, strong in-migration, and tenant stickiness. Demand is growing, but new inventory is not keeping pace. BTR still represents less than 6% of total housing starts, and zoning restrictions in many cities limit expansion.

SFR and BTR properties routinely outperform traditional multifamily in occupancy and lease renewal rates. National occupancy for stabilized BTR communities remains above 96%, while renewal rates hover between 65% and 75%, compared to approximately 55% in many apartment markets.

High Occupancy & Retention Rates deliver Pricing Power!

How to Access These Investments?

For busy professionals, SFR and BTR offer strong fundamentals and steady cash flow. The question is: what’s the best way to invest without derailing your career?

Direct Ownership of Turnkey SFRs: Buy individual turnkey SFRs for full control and direct tax benefits, but requires significant time and local expertise.

REITs or Public Funds: Invest through companies like Invitation Homes for liquidity and hands-off management, but face stock volatility and limited tax advantages

Private Real Estate Funds & Syndications: Partner with experienced operators for institutional-grade assets with professional management and direct tax benefits. Less liquid but often superior risk-adjusted returns.

For passive investors, doctor, entrepreneur, or busy professional, private funds typically offer the best balance of returns, tax benefits, and time commitment. *Not Investment advise

The Long-Term Opportunity!

Does SFR and BTR represent the next 20-year boom hiding in plain sight? We can’t say for sure, but they represent a structural shift in American housing. Rising home prices, lifestyle changes, and demographic trends have created lasting demand for quality rental homes.

The opportunity is clear with institutional ownership is under 5%, occupancy rates exceed 96%, and tenant retention beats traditional apartments. This isn’t about timing the market it’s about positioning for long-term housing demand.

These investments also solve real problems. With over 3 million units of housing shortage, professionally managed rental communities provide quality options for families who choose flexibility over ownership.

At HDZ Partners, we’ve spent decades mastering SFR investing across Florida’s growing markets. Book a call today if you want to learn more.

👉 Schedule Your Call Today

For informational purposes only not Investment advise and does not constitute an offer to sell, or a solicitation of an offer to buy, any securities.
All investments involve risk, including the potential loss of principal. Investors should consult with their own financial, tax, and legal advisors.