Sherrie and Sandy Wilson moved to the Twin Cities from outside Chicago last year to be closer to family in Cottage Grove. They weren’t ready to buy in the hypercompetitive real estate market but wanted their own four walls.
“We totally downsized,” said Sherrie Wilson, who’s in her early 60s. “Everyone was overpaying for everything. … I didn’t want to play that game.”
The Wilsons sold their larger, single-family home and leased a 1,500-square-foot house in Canvas at Woodbury, a new, upscale neighborhood of single-family rental homes with a “modern farmhouse” flair. They’re part of a new wave of suburban development in the metro and a larger national trend of high-end, lease-only communities with rent payments of up to $4,500 — and a list of luxurious amenities.
“This place fit our needs,” Sherrie Wilson said, adding that the pair have a dog and needed a yard. “Number one, we’re not in an apartment.”
At least six communities are open or under construction by multiple builders, with another in the land development stage. A big player in the metro is Chicago-based Watermark Equity Group, which has five projects under construction or open in Maple Grove, Plymouth, Inver Grove Heights and Woodbury. They’ve built about 400 homes in the Twin Cities.
Ian Peterson, owner of Integrate Properties, also has “build-to-rent” communities underway in Albertville and Victoria, featuring 1,300- to 3,000-square-foot homes.
“It’s a class-A-plus apartment building on a horizontal scale,” he said, adding that 180 homes are planned between the two locations.
Nikki Longie, regional property manager for Lincoln Property Co., which manages the Watermark communities, said residents are a mix of older, downsizing couples selling off family homes, younger families with kids who want a good school district, and those who choose to rent but don’t want an apartment. They may be contract workers, executives or even athletes here temporarily, she said.
“There is a lot of demand for it — we fit a niche for a lot of different people,” Longie said. “We like to tell people it’s the best of both worlds.”
Clubhouses, pools and dog parks
Regardless of developer, the homes are mostly between 1,500 and 3,000 square feet, though at Canvas at Inver Grove Heights, there are options as small as 842 square feet. The largest homes are five bedrooms, four baths and about 3,000 square feet.
The homes are “highly amenitized,” said Catlin Clarke, Watermark’s marketing and communications specialist. At Watermark homes, all lawn care, snow removal and home maintenance is done by the management company. There’s an outdoor pool, clubhouse, gym and area for lawn games.
Peterson said his homes have similar amenities, though some have dog parks and fire pits, too. Residents value their time and want to spend it working out, for instance, rather than mowing the lawn, he said.
Nearly all of the homes have “smart technology.” Clarke said that includes Ring doorbells, smart locks that allow residents to use a code to enter, and even sensors that monitor for water leaks.
“You can manage everything from your phone,” Clarke said.
Kylie Duarte, a Watermark associate, said the build-to-rent concept began and is going strong in the Sunbelt.
However, some cities are uncertain when they first encounter a proposal for a build-to-rent community, Duarte said.
“When you hear ‘renter,’ most people think something negative,” Duarte said. “All the people who rent from us are renters by choice.”
There’s a lot of “up-front education” with some officials on what the communities are, Peterson said.
Heather Rand, Inver Grove Heights’ community development director, said the discussion in her city was mostly about the lots being smaller than in typical single-family home developments.
Of the 120 homes being built in Inver Grove Heights, 69 are on 30-foot-wide lots, Rand said.
A trend or a fad?
There has been a sharp uptick in developments featuring single-family homes built as rental properties, said Nick Erickson, director of research and regulatory affairs for Housing First Minnesota, the trade group that represents area home builders.
Erickson said that’s because there’s a “strong desire” by many people to live in single-family, suburban homes, but not everyone can afford to buy.
The Twin Cities also has a low inventory of single-family homes for sale, he said, and most of the houses being built are not starter homes. So some people rent instead, he said, including in upscale developments.
There are potential downsides to the trend, including limitations on interior and outdoor decorating choices. That means no interior or exterior painting and no putting up fences, Clarke said.
Sherrie Wilson said she actually misses doing yardwork, though Longie said residents can have a garden in the yard or pots of flowers. Extras like a chair by the entry or welcome mats are OK, too.
Residents should leave the homes in the condition they moved into, Longie said.
“It’s all under landlord discretion … but we do want people to feel at home,” Longie said.
Peterson said he thinks more such communities will come to market.
Watermark officials said they’re looking for the right pieces of land to construct more “build-to-rent” neighborhoods in the Twin Cities. The company has more than 1,500 homes under construction across the country, including some townhomes.
“People are really taking notice … and it’s only going to continue to grow,” Clarke said. “I think it’s a trend, not a fad.”