What is a build-to-rent community, and how is this investment strategy redefining the real estate market in California?
We have some answers.
At Bell Properties, we’ve been following this trend and helping investors position their rental assets accordingly. We’re excited to tell you about this shift in the rental landscape and what it could mean for the future of your growing portfolio.
Your Takeaways:
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Defining Build-to-Rent Communities: What Makes Them Different?
A Build-to-Rent (BTR) community is a residential development designed from the ground up specifically for renters, and not for eventual sale. Unlike a typical apartment complex or a landlord-owned single-family home, every home in a BTR community is purpose-built with the long-term renter in mind, from the floor plan to the finishes.
In California's competitive housing market, this distinction matters.
Most rental properties are either apartment units stacked in large buildings or individual homes that an owner decided to lease out. BTR communities occupy a unique middle ground: residents enjoy the privacy and space of a single-family or townhome-style layout, complete with private yards, attached garages, and no shared walls, while still benefiting from professional on-site management, community amenities, and flexible lease terms.
Because the entire community is typically institutionally owned and operated, maintenance is faster, standards are consistent across every unit, and shared spaces like pools, dog parks, and fitness centers are maintained with the same care as a premium apartment complex.
For Californian tenants who feel priced out of homeownership but crave a neighborhood feel, Build-to-Rent offers something genuinely new: the lifestyle of owning, without the financial commitment of buying.
Rising Popularity Among Tenants and California Investors
Bell Properties has come across some data that’s especially interesting for any investors thinking about this type of rental acquisition:
BTR home starts nationwide reached 130,520 in 2024, which is a 134% increase since 2019, and a 16% jump from 2023.
The share of BTR single-family construction starts had never exceeded 6% before 2022, but then climbed to around 9% by mid-2024.
The total U.S. build to rent inventory now reaches about 350,000 units.
California added more than 1,800 BTR rental homes in 2024, with another 2,270 units currently underway, which tells us the trend is expanding beyond its Sun Belt origins into the state.
The Build-to-Rent boom isn't a coincidence. This is the result of two important groups finding exactly what they've been looking for in the same product.
For renters, the appeal is straightforward. California's homeownership rate remains one of the lowest in the nation, and with median home prices still well out of reach for many working households, the dream of a yard, a garage, and a quiet neighborhood no longer has to mean a 30-year mortgage. BTR communities deliver that lifestyle without the down payment, the property taxes, or the maintenance burden. For Millennials and Gen Z renters especially, generations that value flexibility and experience over ownership, BTR fits naturally into how they want to live.
For investors, California represents a compelling long-term opportunity. The state's chronic housing undersupply, strict land-use regulations, and persistently high demand create the kind of structural rental market that institutional capital finds attractive. BTR assets offer something traditional multifamily investments often don't: lower tenant turnover, longer average lease terms, and a tenant base that tends to be highly engaged with the community they've chosen. That stability translates directly into more predictable returns.
At Bell Properties, we can see what makes California particularly interesting here. Markets where land costs are lower but demand from coastal transplants remains strong have become early hotbeds for BTR development. As affordability pressures show no signs of easing, both renters seeking quality and investors seeking yield are expected to keep driving the sector forward.
Contact us for some guidance about your specific market and how a BTR opportunity might make your portfolio stronger.
How to Invest in Build-to-Rent Communities in California
Large institutions may dominate BTR development, but that doesn't mean individual investors are locked out. There are several practical ways to get a piece of the action.
Purchase a Home Within a BTR-Designed Community
Certain BTR developers open a portion of their communities to individual buyers rather than selling exclusively to institutional players. These homes are typically offered as turnkey investments, already ready-to-rent so investors can begin generating income quickly. In markets across California, new construction homes purpose-built for the rental market are increasingly becoming available to individual buyers seeking this type of opportunity. We have worked with investors to buy a single home within an existing rental community as well as investors who bought several assets inside of one neighborhood. Contact us at Bell Properties for both asset management and property management advice.
Build Your Own BTR-Style Rental
Some investors choose to replicate the BTR model on their own terms. This means acquiring a lot, constructing a single-family home or duplex, and leasing it long-term. New construction carries meaningful advantages over buying existing rental stock: lower maintenance demands, contemporary layouts that attract quality tenants, energy-efficient systems, and stronger rental income potential. Over the first decade of ownership, reduced repair costs alone can make a significant difference to net returns.
Co-Invest Through a Development Partnership or Syndication
Investors who want exposure to larger BTR projects without taking on full ownership can participate through partnerships or syndication deals. These structures typically involve contributing capital toward a new development, collecting a share of rental cash flow once units are occupied, and participating in any appreciation when the asset is eventually sold; all without needing institutional-level capital to get started. Talk to us at Bell Properties and we can look at your portfolio and your finances to offer some advice.
Invest in Single-Family Rental REITs
There’s always the REIT. For those who prefer a hands-off approach, publicly traded REITs focused on single-family rentals offer passive exposure to the BTR trend. Several of these trusts manage large national portfolios that include BTR-style communities, allowing individual investors to participate in the sector's growth through the stock market. In this case, there’s no property ownership or management required, but that also means no operation control is offered.
Access the Sector Through Private Real Estate Funds
Private equity funds that specialize in residential development represent another avenue worth exploring. These funds typically acquire land, develop BTR communities, lease the homes to stabilize occupancy, and ultimately sell the completed assets to institutional buyers. Individual investors participate as limited partners and receive a proportional share of profits when a project reaches completion, offering a more direct stake in the development cycle than a publicly traded REIT.
The right entry point depends on your capital, goals, and risk tolerance. Contact Bell Properties for some insight on the best way forward.
The Future of California’s Build-to-Rent Landscape
Investing now in the BTR model will set investors up for serious success as the trend takes off. Over the last few years, states like Arizona, Texas, and Florida saw most of the BTR development and interest. This has expanded, however, and California is an ideal location for additional BTR communities. We have enough housing shortages in markets across the state, investors looking for creative ways to compete, and affordability challenges in the housing market as a whole.
With homeownership remaining out of reach for a growing share of the population, long-term rental demand is structurally strong, and purpose-built communities are well-positioned to meet it.
Emerging markets throughout the state offer the land availability and population growth that investors look for when evaluating new opportunities.
As institutional capital continues flowing into the space, individual investors who move early in these developing markets stand to benefit most.
In California, we believe that build-to-rent isn't a trend. It’s becoming a permanent fixture of the housing landscape, and it’s an ideal opportunity for investors looking for new tenant pools or a way to diversify their portfolios.
Making the Case for BTRs
Why should investors think about BTR communities instead of just buying a handful of single-family homes in different neighborhoods?
Unlike scattered single-family rentals spread across different neighborhoods, BTR communities are designed to be managed as a single, cohesive operation. Centralized and professional property management, uniform building materials, and standardized appliances all work together to keep maintenance costs predictable and lower over time. And because these developments can be delivered and leased out in phases, developers can manage risk more effectively throughout the construction cycle.
Curious about the property management aspect? That’s what we’re here for. Contact us at Bell Properties, the experts in asset and property management throughout multiple California markets.
This is our general overview of the BTR market and why such homes are attractive to both tenants and owners in California. If you’d like a more personalized assessment of how you can benefit, contact our team at Bell Properties.
