A Guide to Rental Communities (Apartments and BTR) and Product Types
Clients frequently approach the team for guidance in defining rental community asset classes, including apartments and build-to-rent properties, as well as their various product types.
Acknowledging the variability in terminology across different organizations nationwide, the team emphasizes the importance of consistent definitions to streamline industry practices and reduce confusion. To address this need, a comprehensive guide has been developed.
According to John Burns, apartments are a well-established asset class in the rental market, comprising multifamily buildings with multiple units under one roof. They range from high-rise buildings in urban centers to garden apartments in suburban areas.
We use 3 housing product types to define apartments.
Mid-to-high-rise multifamily building: High-rise buildings are 10+ stories and are typically located in urban centers. Mid-rise buildings are 5–9 stories and are found in urban and suburban locations. Mid- and high-rise apartments range from affordable to luxury products, and newer buildings typically offer extensive amenities.
Low-rise multifamily building: Low-rise apartments are under 5 stories and are found in both urban and suburban locations. They typically offer a higher-density living option with more amenities than garden-style apartments. They also include an elevator.
Walk-up/garden apartments: These are typically multi-unit buildings with less than 5 stories (3 stories is most common). These complexes usually consist of multiple buildings spread throughout a larger property. All garden product is walk-up (no elevator).
BTR is a relatively new asset class in the rental housing market. These homes are purpose-built for rent rather than for sale and are professionally managed. According to our definition of BTR, communities must have at least 25 units, be less than 26 years old, and be contiguous communities with no stacked units.
We define 5 distinct housing types within BTR.
Single-family detached: A stand-alone home containing only one dwelling unit with no connection to adjacent units and a dedicated garage on the lot
