Separate from rental homes owned by individuals who act as landlords, single-family rental communities are essentially subdivisions of houses typically owned by one entity or company. Additionally, all or most of the homes in the community are for rent, not for sale.
In the Round Rock, Pflugerville and Hutto area, there is only one active single-family rental community called Legacy, which contains 83 homes available for rent.
However, there are more than a dozen single-family rental communities in some stage of development throughout Williamson County, including Leander and Georgetown.
"Overall, it provides another housing option for people,” said Brad Wiseman, director of planning and development in Round Rock.
Wiseman and other local real estate professionals and experts agree that a diverse range of housing options is good for economically diverse populations. Given the high demand for that type of housing coupled with soaring mortgage rates in the area, many experts agree it is likely the single-family rental community trend will continue.
“You get a lot of the qualities of a single-family type neighborhood without the ... expense, the mortgage—everything that goes with owning a house,” Wiseman said. “You get a lot of benefits without a lot of the inhibitors to getting in that single-family house.”
The single-family rental boom
Anna Postelle, a resident at the Legacy single-family rental community off of Pfennig Lane in Pflugerville, said there are several benefits to her situation.
For Postelle, a major benefit of living at Legacy is the flexibility it provides her. She said she also likes not having to worry about paying a mortgage and all of the responsibility that comes with ownership, including home maintenance and repairs.
“I’ve lived in multifamily apartments, and they’re great,” Postelle said. “But when given the option to have more square footage and a grassy area—I have a dog, I love my dog and want my dog to be able to go out in the backyard. I enjoy that aspect of my lifestyle—so that’s a plus, too.”
Since mid-2020, city officials throughout Williamson County have approved several new single-family rental communities, the majority of which will have units ready to rent by late 2023 or early 2024.
Collectively, they will bring well over 2,000 new rental homes to the area.
Two of those communities, called Oasis Round Rock and Oasis Georgetown, will bring up to 540 units combined with a large percentage of single-family detached homes accounting for the inventory.
Matt Shafiezadeh, principal at Urban Genesis, a realty company that produces Oasis, said his company’s single-family rental housing community is oriented to solve the issue that he believes many people are facing right now, including aging millennials and “downsizing” baby boomers.
“They want to live in a [single-family] home, but they can’t afford it, or they don’t have a deposit,” Shafiezadeh said. “Particularly, with what’s unfolding in our economy with where mortgage rates are, [this] is why we’re designing this product in the first place.”
Shafiezadeh said when the Oasis units in Round Rock and Georgetown become available, which should be sometime in early 2024, the rents will go for whatever the market rate dictates at the time. He could not provide specific figures, but said as an example, if units were to become available as of early June 2022, the average rent would be about $2,200 per month.
Another single-family rental community coming to eastern Pflugerville is called Cameron Yardhomes, which will be part of a larger multiuse development called Cameron 96. When complete, Cameron Yardhomes will have about 260 single-family detached homes as well as duplexes. Rental homes should be ready to rent by the end of 2024, according to Jessica King, development manager for Urban Moment, the company bringing the Cameron 96 community to Pflugerville.
In addition to Cameron 96, Urban Moment is bringing several other single-family rental communities to the area, including Urbana at Cottonwood Creek in Hutto, Urbana at Hero Way in Leander and Urbana at Meadow Lake in Round Rock.
All four communities are scheduled to be complete by mid- to late 2024 and will bring almost 1,000 detached single-family and duplex units to the area.
Pros and cons
For local city government officials and staff, having a diverse range of housing options in the area makes sense for several reasons.
“While the rental of single-family homes is not at all new to us in Pflugerville, a neighborhood built on the framework [of] a multifamily project but with single-family structures instead of apartments is a new concept for us,” said Jeremy Frazzell, Pflugerville director of planning and development services, in an email.
Frazzell added that single-family rental communities offer an opportunity for residents looking for an alternative to traditional home ownership without the typical apartment feel.
However, with most developers of these communities in Williamson County and north Travis County confirming that when complete, the rental rates will go for market rate for a single-family rental home, many people could be priced out of that option.
Sarah Wooster, who lives in the Emory Apartment complex in Hutto, said a single-family rental home is not attainable for her. She splits the $1,100 total rent at The Emory, and said even if she wanted to, the average cost to rent a single-family home in Hutto being about $2,200 as of June 2022 prices her out of that option.
“It’s already hard to afford rent, gas and everything else,” Wooster said. “And I couldn’t imagine renting a [single-family] home.”
Mark Sprague, state director of information capital for Independence Title, said he has been a kind of real estate economist and analyst in Central Texas for several years.
Like other industry professionals, Sprague agrees that single-family rental communities can bring many benefits for residents, but they must be well-maintained by property management.
“You’ve got to have property management into perpetuity so that community does not look [bad] in the future,” he said. ••Sprague said he has seen several examples of companies managing single-family rental communities poorly, and those communities ended up nearly going bankrupt. However, Sprague added he can see the communities growing as a trend.
One reason is in Texas, property appreciation has risen 158% in the last 12 years compared to appreciation of between 40%-50% on either coast of the U.S., he said. ••Additionally, he said rents in Central Texas are rising quicker than in most of the country, and demand for rental units in the area remains high.
“I’m able to return my capital quicker [in Texas], there’s great appreciation, and there are higher rents per square foot that I can get on single-family [homes] versus apartments,” he said.
