When Las Vegas-based American Homes 4 Rent sets out to build a new community of single-family homes for rent in the Orlando market, the company is noticing a common pattern:
Tenants are leasing the homes before they’re even finished.
“The response to our newly constructed communities has been tremendous,” said Brent Landry, the company’s executive vice president told GrowthSpotter. “Residents are very excited about the opportunity to live in a brand new home with lawn care and maintenance included. For many of our new customers, they’ve never seen a (rental) option like this put in front of them. It’s still a relatively new concept for consumers in that it’s much higher quality than what they’ve typically had to select from in the market.”
In response to the demand, AH4R is looking to bring more of its Built-to-Rent product to the area. The company currently has eight rental communities scattered across Apopka, St. Cloud, Kissimmee, Leesburg, Mascotte and Sanford.
It recently submitted a permit application to the St. Johns River Water Management District for its ninth: a 100-lot subdivision called Palmetto Pointe just south of the Orlando Sanford Airport in Seminole County.
The vacant 39.9-acre piece of land sits along the south side of E. Lake Mary Boulevard, just north of Lake Jessup.
Landry aid the homes here will be similar to ones within the company’s Celery Cove community a few miles north in Sanford.
“That community has done very well; we’ve received very good feedback from our residents,” he said, “and this (Palmetto Pointe) is a follow-up to that one.”
However, Palmetto Pointe, like many of its other communities, will offer a pool and amenity center with exercise equipment.
At 100 lots, Palmetto Pointe will also be much larger than its Sanford counterpart. Celery Cove has 37 lots.
At Celery Cove, homes with fenced yards and two-car garages range in size from 1,605 square feet (a three-bedroom, to bath floorplan) to 2,106 square feet (a four-bedroom, three-bath floorplan.) Rent rates start in the low $2,000s.
The affordability of the product compared to other options is also driving its growing popularity nationwide, Landry added.
“We’ve all seen housing prices go through the roof, more recently we’ve seen mortgage rates elevate,” he said. “All of that has combined to make purchasing your quintessential American family home more difficult for many working-class families. And while many still purchase, we are in the business of providing an option for those who choose to rent.”
According to site plans drafted by engineering firm Madden, Moorhead & Stokes, homes within the community will rise as tall as two stories and sit on lots with a minimum size of 75-by-120 feet. That’s also comparable to Celery Cove, Landry said.
It’s estimated that the subdivision will bring as many as 50 children to nearby schools.
American Homes 4 Rent, the largest single-family Build-tor-Rent (BTR) operator in the nation, is coming off another successful quarter that saw single-family property revenues increase 15.4% year-over-year to $361.9 million.
As of June 2022, the company owned 58,715 single-family properties in select submarkets in 22 states, according to its website. It had 2,054 closings in 2021, ranking 41st on the Builder100 list of homebuilders for that year. The development company ranked 45th the previous year when it made its debut on the list.
The company develops, owns, and manages its communities for the long term.
“For many build-to-rent developers, it’s build to rent to sell to someone else” Landry said. “For us, we plan to operate these communities for 15 to 25 years into the future.”
Single-family rental homes are becoming more and more popular across the nation. More build-to-rent homes were built in 2021 than any other year, and the activity this year is expected to shatter that record.
A report by RentCafe said that 6,740 new built-to-rent homes were completed in 2021 nationwide. As of January of this year, there were more than double that number under construction: nearly 14,000.
“Single-family rentals are not a new concept,” the report reads. “Although they proliferated in the aftermath of the 2008 housing crisis, this time it’s different. The pandemic created an unprecedented demand among renters for space and privacy, which houses can address much better than apartments.”
American Homes 4 Rent has been busy in the Orlando market. It has three communities in Apopka, two in Kissimmee, and one apiece in Leesburg, Sanford and Mascotte, according to the developer’s website.
Its 222-lot Sky Lakes community in St. Cloud — featuring brand new homes with granite countertops, stainless steel appliances, two-car garages, a community pool, and a clubhouse stocked with a fitness center — is expected to welcome renters by the summer of 2023, its website says. Rent includes front and backyard maintenance.
Available homes for Sky Lakes are 4-bedroom, 2.5-bath and range from 1,977 square feet to 2,449 square feet. Rent ranges from $2,395 to $2,550 per month.
AH4R paid $5.77 million for the 143-acre site in October of 2020, snagging land that was formerly used as St. Cloud Airfield property on Michigan Avenue, just south of St. Cloud High School.