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Built to Rent - BTR
Paul Grant Truesdell, J.D., AIF, CLU, ChFC, RFC
Founder & CEO of The Truesdell Companies
The Truesdell Professional Building
200 NW 52nd Avenue
Ocala, Florida 34482
352-612-1000 - Local
212-433-2525 - New York
Truesdell Wealth, Inc.
https://truesdellwealth.com
The Truesdell Companies
https://truesdell.net
Casual Breakfast Conversation at the Stone Creek Grille - January 8th @ 9:45 AM
Casual Conversation over Cocktails at the Stone Creek Grille - February 19th - 3:00 PM
Reservations Required - Call or Text: 352-612-1000
The Truesdell Companies is a proud sponsor of the Eirinn Abu benefit concert for Tunnel to Towers, on February 28th at the Circle Square arena in Ocala, Florida. For more information, visit: https://eirinnabu.com or https://eirinnabu.com/event/5760795/695871447/eirinn-abu-and-tunnel-to-towers-foundation-concert
- - -
Rough Transcription
Paul Grant Truesdell, J.D., AIF 0:00
The growth of build to rent communities such as the BB livings developments, these are going on in the Tampa Bay area, makes a well, it's a significant shift in the housing market that a lot of people should be paying attention to, and this may be the first time you've heard of it. And so we're going to talk about the growth of build to rent, B, T, R, you are
Speaker 1 0:27
listening to the Paul Truesdell podcast sponsored by Truesdell wealth and the other Truesdell companies. Note, due to our extensive holdings and our clients always assume that we have a position in all companies discussed and that a conflict of interest exists, the information presented is provided for entertainment and informational purposes only. Truesdell wealth is a registered investment advisor.
Paul Grant Truesdell, J.D., AIF 0:58
Build to rent communities, not couple homes, an entire community. Now these communities are designed as single family subdivisions, but their use is, well, it's for rental use, and they've surged in popularity over the past five years in particular, especially since and after COVID, a ridiculous pandemic that we had now. This trend has been fueled by a growing demand for more spacious private living options compared to traditional multi family apartments. I can tell you absolutely without any doubt or hesitation if I was moving to an area for two or three years as kind of a job situation. These communities would be number one on my list. Apartment living. I don't care who you are or what you do. Generally speaking, trigger warning, they suck. You just can't get an ongoing caliber of people worth a ding dong. There's always problems, parking lots, cars, issues, parties, you name it. So as I said, the trend is really being fueled by a growing demand for more spacious and private living options compared to traditional multi family apartments. I kind of want to have a little bit of distance between the neighbors. Maybe want the kids to be able to run around the yard a little bit. Not that kids really do that anymore. Does anybody even ride a bicycle? In fact, come to think about it, when's the last time you ever saw a group of kids who found a vacant lot and they turned it into like a football field or baseball field, or they just did anything like that on their own? I guess had to all died out with our generation. The appeal of build to rent communities lies in their ability to combine the privacy and space of single family homes with the amenities that's the key thing, amenities and maintenance service of luxury apartments, as I said, residents enjoy the convenience of such high end amenities as property management, but not just Ralphie tool, dude who looks like he crawled off of a Navy ship in World War Two. We're talking about professional property management and the freedom from long term ownership commitments look. One of the big advantages of people when they move to Florida is the amenities in these 55 plus communities. When you have a really good dynamic understanding activities director or team, things can be a lot of fun, the villages, Stone Creek, Sun City Center and the many others here in Florida, that's one of the reasons you move there, is because there's so much to do. And so you have a community center, a clubhouse gym of a gym of some type, pool, usually you have tennis courts and pickleball courts. And depending upon the size of the community, you might have a golf course, nearby or on site. Now if you go online, you'll read that things. They'll say like, oh, the advantage is, they attract young professionals, that's true, but they also attract retirees and families who prefer flexibility over the responsibilities of home ownership. Now this is something I've talked about for many years as an investment advisor, I can tell you absolutely unequivocally, beyond the exclusion of every reasonable doubt, home ownership is not necessarily the pathway to financial independence. Oh, I know. I know every realtor in the world will tell you, homeownership, home ownership, homeowners, even when President Bush, okay, the 43rd President of the United States, it was always about the American dream is to own a house. Maybe American dream should be about being financially independent. You work because you want to work, not because you have to work. That's a nice situation, by the way. But the issue is, if you have the inability to save money. Uh, on your own without having payroll deduction plans. Yeah, your your your real estate, is like a force to savings. It's one of the big advantages for people. When they buy a whole life insurance policy, it's like a forced savings. Nobody wants to talk about it. Everybody wants to say, Oh, you're better off doing some other type of investment that has a higher rate of return and doesn't have all the costs and fees. I don't disagree, but for most people, that forced savings is, well, the only thing they can accumulate. And I get it, that's not you. So you have a hard time understanding that, but it's true. Now, the model, okay, build to rent doesn't it's not perfect, okay, there are drawbacks. Critics argue that the focus on rental housing could reduce opportunities for first time buyers, exacerbating housing affordability issues. Additionally, build to rent developments are often, well, they require a lot of acreage, potentially reducing the availability of land for traditional residential projects. I had to dig that up and come up with it. I don't buy any of that garbage. Because here's the thing, you you live in a single family home, whether you buy or not, the acreage is there. It's just a false premise. But what I am going to tell you is that the more of these types of developments out there, puts a real squeeze on independent builders, custom builders. It puts a real squeeze. Well, custom, I'll say the semi custom market, but it puts a real squeeze because your venture capital money, your private equity money, your pension money that goes into these types of projects, the leverage they have is astronomical. I mean, I'll give you a good example, DR Horton. It is really hard to compete when you have a home for sale, an existing home, when DR Horton is putting up homes, subsidizing the mortgage, I go on and on, it's really hard. Now, I'm not saying the construction is any better, but it is what it is now in the Tampa Bay area, the trend has gained momentum with communities. Again, like I mentioned, BB living well in park, they're offering a variety of different options, and it's a real growing demand. Now the region's suburban areas such as Manatee and Pasco, they've become really hot spots for these projects, and they benefit from, well, a lot of available space. You can't go anywhere in the heart of Florida or along the Gulf Coast, where you got some open land somebo...
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By Paul Grant Truesdell, JD., AIF, CLU, ChFCPaul Grant Truesdell, J.D., AIF, CLU, ChFC, RFC
Founder & CEO of The Truesdell Companies
The Truesdell Professional Building
200 NW 52nd Avenue
Ocala, Florida 34482
352-612-1000 - Local
212-433-2525 - New York
Truesdell Wealth, Inc.
https://truesdellwealth.com
The Truesdell Companies
https://truesdell.net
Casual Breakfast Conversation at the Stone Creek Grille - January 8th @ 9:45 AM
Casual Conversation over Cocktails at the Stone Creek Grille - February 19th - 3:00 PM
Reservations Required - Call or Text: 352-612-1000
The Truesdell Companies is a proud sponsor of the Eirinn Abu benefit concert for Tunnel to Towers, on February 28th at the Circle Square arena in Ocala, Florida. For more information, visit: https://eirinnabu.com or https://eirinnabu.com/event/5760795/695871447/eirinn-abu-and-tunnel-to-towers-foundation-concert
- - -
Rough Transcription
Paul Grant Truesdell, J.D., AIF 0:00
The growth of build to rent communities such as the BB livings developments, these are going on in the Tampa Bay area, makes a well, it's a significant shift in the housing market that a lot of people should be paying attention to, and this may be the first time you've heard of it. And so we're going to talk about the growth of build to rent, B, T, R, you are
Speaker 1 0:27
listening to the Paul Truesdell podcast sponsored by Truesdell wealth and the other Truesdell companies. Note, due to our extensive holdings and our clients always assume that we have a position in all companies discussed and that a conflict of interest exists, the information presented is provided for entertainment and informational purposes only. Truesdell wealth is a registered investment advisor.
Paul Grant Truesdell, J.D., AIF 0:58
Build to rent communities, not couple homes, an entire community. Now these communities are designed as single family subdivisions, but their use is, well, it's for rental use, and they've surged in popularity over the past five years in particular, especially since and after COVID, a ridiculous pandemic that we had now. This trend has been fueled by a growing demand for more spacious private living options compared to traditional multi family apartments. I can tell you absolutely without any doubt or hesitation if I was moving to an area for two or three years as kind of a job situation. These communities would be number one on my list. Apartment living. I don't care who you are or what you do. Generally speaking, trigger warning, they suck. You just can't get an ongoing caliber of people worth a ding dong. There's always problems, parking lots, cars, issues, parties, you name it. So as I said, the trend is really being fueled by a growing demand for more spacious and private living options compared to traditional multi family apartments. I kind of want to have a little bit of distance between the neighbors. Maybe want the kids to be able to run around the yard a little bit. Not that kids really do that anymore. Does anybody even ride a bicycle? In fact, come to think about it, when's the last time you ever saw a group of kids who found a vacant lot and they turned it into like a football field or baseball field, or they just did anything like that on their own? I guess had to all died out with our generation. The appeal of build to rent communities lies in their ability to combine the privacy and space of single family homes with the amenities that's the key thing, amenities and maintenance service of luxury apartments, as I said, residents enjoy the convenience of such high end amenities as property management, but not just Ralphie tool, dude who looks like he crawled off of a Navy ship in World War Two. We're talking about professional property management and the freedom from long term ownership commitments look. One of the big advantages of people when they move to Florida is the amenities in these 55 plus communities. When you have a really good dynamic understanding activities director or team, things can be a lot of fun, the villages, Stone Creek, Sun City Center and the many others here in Florida, that's one of the reasons you move there, is because there's so much to do. And so you have a community center, a clubhouse gym of a gym of some type, pool, usually you have tennis courts and pickleball courts. And depending upon the size of the community, you might have a golf course, nearby or on site. Now if you go online, you'll read that things. They'll say like, oh, the advantage is, they attract young professionals, that's true, but they also attract retirees and families who prefer flexibility over the responsibilities of home ownership. Now this is something I've talked about for many years as an investment advisor, I can tell you absolutely unequivocally, beyond the exclusion of every reasonable doubt, home ownership is not necessarily the pathway to financial independence. Oh, I know. I know every realtor in the world will tell you, homeownership, home ownership, homeowners, even when President Bush, okay, the 43rd President of the United States, it was always about the American dream is to own a house. Maybe American dream should be about being financially independent. You work because you want to work, not because you have to work. That's a nice situation, by the way. But the issue is, if you have the inability to save money. Uh, on your own without having payroll deduction plans. Yeah, your your your real estate, is like a force to savings. It's one of the big advantages for people. When they buy a whole life insurance policy, it's like a forced savings. Nobody wants to talk about it. Everybody wants to say, Oh, you're better off doing some other type of investment that has a higher rate of return and doesn't have all the costs and fees. I don't disagree, but for most people, that forced savings is, well, the only thing they can accumulate. And I get it, that's not you. So you have a hard time understanding that, but it's true. Now, the model, okay, build to rent doesn't it's not perfect, okay, there are drawbacks. Critics argue that the focus on rental housing could reduce opportunities for first time buyers, exacerbating housing affordability issues. Additionally, build to rent developments are often, well, they require a lot of acreage, potentially reducing the availability of land for traditional residential projects. I had to dig that up and come up with it. I don't buy any of that garbage. Because here's the thing, you you live in a single family home, whether you buy or not, the acreage is there. It's just a false premise. But what I am going to tell you is that the more of these types of developments out there, puts a real squeeze on independent builders, custom builders. It puts a real squeeze. Well, custom, I'll say the semi custom market, but it puts a real squeeze because your venture capital money, your private equity money, your pension money that goes into these types of projects, the leverage they have is astronomical. I mean, I'll give you a good example, DR Horton. It is really hard to compete when you have a home for sale, an existing home, when DR Horton is putting up homes, subsidizing the mortgage, I go on and on, it's really hard. Now, I'm not saying the construction is any better, but it is what it is now in the Tampa Bay area, the trend has gained momentum with communities. Again, like I mentioned, BB living well in park, they're offering a variety of different options, and it's a real growing demand. Now the region's suburban areas such as Manatee and Pasco, they've become really hot spots for these projects, and they benefit from, well, a lot of available space. You can't go anywhere in the heart of Florida or along the Gulf Coast, where you got some open land somebo...