Build-to-let is the New Buy-to-let

MARBELLA, Spain - July 19, 2017 - PRLog -- Following huge investor demand for US buy-to-let properties, existing supply is growing ever tighter. Investors keen to continue taking advantage of the lucrative rental market are now looking in a different direction buying up new homes directly from the builder.

Homeownership in the US sits at a near 51-year low making rental accommodation the only option for many households. Strong demand for property and rising rental rates mean buying a property remains out of reach for many.

Obstacles to homeownership

In the aftermath of the US property market crash in 2008, families have confronted a number of obstacles to becoming homeowners. One of the most challenging comes in the form of mortgage lending conditions, which stipulate a larger down-payment in many cases. Steadily rising house prices represent another hurdle, despite the fact that in many metro areas, property prices are still below their 2007 peak.

Among one of the largest population groups, the Millennials, high student debt forms another obstacle and as a result, hinders their possibilities as home buyers. Lifestyle changes such as delaying marriage and forming a family have also made rental homes a more attractive option to this age group. Analysts point out that renting a home has now become much more mainstream.

Demand for property strong

Despite the increase in single-family rental properties on the market, the vacancy rate remains low overall. Statistics compiled by ATTOM Data revealed that vacancy rates averaged just 4% in the 473 counties included in the study. The research also found that rental rates stabilised in the year to May and rose by 4.5% on average.

Strong job creation in the US is another factor driving demand for property. Employment growth remains solid in most of the best single-family rental markets where salary increases bode well for rental yields.

New-build vs buy-to-lets

Foreclosure homes formed the main gateway for buy-to-let investment after the crisis. However, the drop in the foreclosure rate across the nation has led to the supply drying up and forced investors to look at alternative options. One of these is the so-called build-to-rent, currently gaining in popularity.

Investors opt to approach builders directly and purchase single-family homes off plan. As a result, some new developments are exclusively rental properties. Those offering onsite facilities such as sporting amenities and a pool are proving to be particularly popular.

New-build buy-to-lets reap higher yields, according to industry experts. Research has calculated returns on a new single-family property at between 5 and 8% more than an older home.

"We have been offering build-to-let options for a number of years now seeing the diminishing supply in these markets," says Dies Poppeliers, Managing Director of BRIC Group. "One of our main investment products promotes the purchase of plots in Southwest Florida, an area with high demand and low supply, to build single-family home rentals. These prove particularly popular with young families moving to the area who wish to buy but cannot because of rising property prices and mortgage constraints."

BRIC Group offers prime land plots and build packages in Southwest Florida, in the sought-after golf residential area of Rotonda West. Freehold plots with all utility connections in place start at US$26,500. Instant equity returns on build are estimated at up to 9.98% and annual rental yields at up to 9.3%. More information is available from http://bric-investment.com/investments/florida-land/

BRIC Group, http://bric-investment.com/ an investment company specialising in global real estate opportunities, offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group is also developing The Coral resort, in Northeast Brazil, a luxury beachfront resort with land and villa investment opportunities. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US. For more information about BRIC Group visit www.bric-investment.com or email info@bric-investment.com