Tennessee developers build single-family rental home communities as interest rates remain high
NASHVILLE, Tenn. (WKRN) — High prices and high-interest rates have kept many from buying a single-family home in a quiet suburban neighborhood. But what if you could rent one? Developers say they are seeing a big demand for build-to-rent communities.
Upon first glance at the DerryBerry Estates subdivision, you might assume the single-family homes are for sale, but they are not—each one is a rental.
“People are very happy with what we are providing,” said Bruce McNeilage, CEO/co-founder, Kinloch Partners.
Bruce McNeilage built DerryBerry Estates in Spring Hill a few years ago. He saw some families struggling to afford a single-family home in the suburbs, but still craving that lifestyle.
“Their kids are getting older, they want to be in good schools, you want to ride a bike around, and you just can’t do that in an apartment complex.”
No sharing walls at DerryBerry Estates, or Fairview Station, the other rental home community Kinloch Partners built in western Williamson County. DerryBerry Estates subdivision has 41 single-family homes with 3 and 4 bedrooms and rents in the $2,300 to $2,500 range; and all the trappings of the suburban lifestyle.
“They have front porches, they have covered back porches, two-car garage. They have all the amenities and appointments on the interior that one would want in a house for sale, but these are available for rent.”
Who would be interested in an all-rental community? McNeilage said his tenants are often folks new to town testing out the neighborhood, young families who can’t afford just yet to buy, those looking for a low-maintenance lifestyle, and senior citizens, which make up 10% of his tenants.
“They don’t want to live in an apartment and share walls with someone. They want to live in a single-family home in the suburbs to probably be real close to their grandchildren.”
McNeilage has a couple of rental communities in Middle Tennessee, as well as out of state. And with housing prices staying high, he sees the popularity of rental communities sticking around
“I could build 100 houses. I could build another 100 houses. I really have a demand that I can’t keep up with.”
McNeilage said that his tenant turnover is lower than an apartment complex. People will stay in his homes 3-4 years on average, but for apartment complexes, it’s 1.5 years.
