The national trend of build-to-lease communities is gaining quite a foothold in Northern Nevada.
Build-to-lease or build-to-rent communities are developed by home builders who lease rather than sell the new residences.
Lennar kick-started the build-for-lease trend in Northern Nevada back in 2015 with its Frontera at Pioneer Meadows community on Cloud Mountain Drive in Sparks. Frontera was Lennar’s first build-for-rent community. Since then, a spate of build-for-lease communities have cropped up in Northern Nevada.
AMH, a real estate investment trust headquartered at Las Vegas, is nearing completion of Hillsdale Corner, a 58-residence build-for-rent community in northwest Reno on Mae Anne Avenue and Avenida De Landa. D.R. Horton completed The Pines at Ponderosa on Picetti Way in Fernley, along with Aspen Vista at Anchor Point in North Valleys. Landbank Development of Sparks is building the 75-unit Valle Vista affordable housing community at East 4th Avenue and Lupin Drive in Sun Valley, and Lafferty Communities of San Ramon, Calif., has plans to construct a build-to-rent community, also in North Valleys.
The build-for-rent model often hits a sweet spot for a certain demographic of Northern Nevada residents, said Brent Landry, executive vice president of development for AMH.
“You’ve seen what home values have done over the last three to four years, not just in Reno but in every market across the country,” Landry said. “On top of that, you've seen what interest rates have done. Affordability for people to purchase homes for their families has never been worse, yet the desire to live in a single-family detached home with three to five bedrooms is as high as ever. This mismatch has created an opportunity, and as a leader in the build-for-rent space we see these types of communities as an important housing option.
“We strive to add another type of housing solution that gives people the option of renting a new single-family detached home from an operator who will take care of both the house and the resident in a professional manner,” Landry added.
AMH is the nation’s largest developer, owner and operator of single-family rental communities. The publicly traded REIT has approximately 60,000 houses in its portfolio, and it has constructed more than 8,000 homes in over 100 communities nationwide, Landry told NNBW. AMH has an additional 13,000 lots in its pipeline of inventory for future build-for-rent housing units, Landry added.
“We develop communities with the intent to own and operate them long-term,” Landry said. “As a real estate investment trust, we are going to react to market conditions as necessary, but our vision is to be a developer, owner and operator of each community we choose to invest in.”
AMH closed on the 10.7-acre parcel in northwest Reno in June 2022 and began several months of extensive sitework soon after to position the hillside parcel below Westergard Elementary School for a 58-home community with a commons-area park. Rents at its Hillsdale Corner community are $2,795 for a 1,719-square-foot home, and $2,895 a month for a 1,837-square-foot residence.
Those rental prices are typically 25 to 30 percent more affordable than purchasing a similar-quality home, Landry said.
“We are part of the solution in terms of providing new housing inventory for America,” he said. “There’s a shortage of homes in America, and there’s a real pinch in homes at price points and monthly payments that people can actually afford. We provide a great housing option for people to consider.”
Two homes at Hillsdale Corner have already been rented, and AMH expects to wrap up construction at Hillsdale in the next six months, weather permitting.
As an owner-operator, AMH’s property management arm oversees the assets in its build-for-rent communities, and the REIT already has a local development and property management team on the ground in Reno, Landry noted. AMH handles all common-area maintenance and front-yard landscaping for its rental communities. Backyards typically include concrete patios and zeroscaping. Renters pay for utilities on top of their monthly rent, which also includes maintenance, property taxes, and HOA dues.
“There are people who can afford to save up for a down payment and get themselves in a position where they are ready to invest in a home, but there also is a large swath of American families who prefer a different option,” Landry added. “There are some great builders in the Reno area that are happy to sell you a home, but I think we are well-positioned to present a high-quality lease option compared to other lease options in the Reno market.”
AMH began acquiring housing assets more than a decade ago, and it built its first homes in 2017, Landry said. Families typically stay in AMH rental homes for more than three years on average, he added.
Landry said that AMH has its eye on additional development opportunities in the Northern Nevada market.
“As a national publicly traded REIT, we assess the Reno market through the same investment lens as we do for all the markets we invest in. We want to be in places where people are moving in and jobs are growing. Reno checks the boxes on those metrics.
“Consumers also may be undersupplied in housing options in Reno,” Landry added. “If your choices are buying a brand new house, or leasing a house built in the 1970s and ’80s, we think there is an area in the middle that is underserved and requires more options for people who want to live in a new home in the greater Reno and Carson City areas.”