Jerry's News & Insights

Check out Jerry's latest thoughts and what he's reading about 1031 exchange, Delaware Statutory Trusts (DSTs), the real estate market, and more.

Historical PerformanceIndustry NewsInvestment Guides

Seizing the Potential of Build For Rent

Investment Guides
September 05, 2025•2 min read

Build for Rent (BFR) is a rapidly institutionalizing asset class representing sites of contiguous detached homes, townhomes or cottages. BFR caters to those who desire the space of a single-family home but the convenience and community feel of a multifamily rental.

Demand for rental properties is growing rapidly.

Renters are renting longer for many reasons. An increasing number of younger renters do not have the resources to own their own home, and many older residents with fixed budgets are likely to rent indefinitely. The average interest rate on a 30-year fixed home loan has increased from approximately 3.0% to 7.0% in 2022, and would-be buyers have pulled back. With the cost of ownership exceeding the cost of renting by $880, rental living answers a real demand, offering financial and leasing flexibility to those who need it.

U.S. housing has been underbuilt for over a decade.

Developers need to build more than 4 million housing units nationwide to keep up with demand housing units nationwide to meet today’s demand, as housing deliveries have lagged demand every year since 2012. In addition, the U.S. is experiencing a cumulative 20-year production shortfall of over 600,000 apartment units, while many older homes in the rental marketplace are becoming obsolete.

Single-family renters prefer built for rent because it allows them the flexibility to move if needed or desired, and because they do not want the maintenance or financial responsibilities of home ownership.

Single-family rentals (SFR) historically provide a hedge against inflation.

The short-term leases of single-family rentals can adjust to inflation, remaining flexible and increasing annually to the maximum that the market will bear. A net leased asset may have 2% or 3% rent “bumps” per year, but when inflation is over 8%, short-term leases enable growth even in challenging environments.

Build for rent tops private market return expectations.

Examining all commercial real estate asset classes, build for rent projects the highest risk-adjusted return in 2022 at 8.0%. This exceeds the likes of multifamily (5.9%) and office (4.9%).

--

This article originally appeared on Capital Square's website.

Build For RentBuilt for RentBFRSingle Family RentalSFRMultifamilyDelaware Statutory Trust1031 ExchangeDST1031 Exchange DST
Gerald F. "Jerry" Baker, III founded Baker 1031 Investments after a career on Wall Street, where he worked for some of the world's largest institutional real estate private equity, and hedge funds. Prior to starting the firm, Jerry was directly involved in over $10 billion of real estate transactions worldwide. Drawing on the knowledge gained from managing large institutional property portfolios, he adapted these strategies to meet the specific needs, resources, and goals of his own family's real estate portfolio. After proving the success of these strategies, he founded Baker 1031 Investments to make them available to you and your family.

Jerry Baker

Gerald F. "Jerry" Baker, III founded Baker 1031 Investments after a career on Wall Street, where he worked for some of the world's largest institutional real estate private equity, and hedge funds. Prior to starting the firm, Jerry was directly involved in over $10 billion of real estate transactions worldwide. Drawing on the knowledge gained from managing large institutional property portfolios, he adapted these strategies to meet the specific needs, resources, and goals of his own family's real estate portfolio. After proving the success of these strategies, he founded Baker 1031 Investments to make them available to you and your family.

Back to Blog
Baker 1031 Investments - Jerry Baker Lightbulb Logo -1031 Exchange Intelligently

Baker 1031 Investments • +1 415 625 1649 • [email protected]

The information herein has been prepared for educational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. Such offers are only made through the Sponsor’s Private Placement Memorandum (PPM) which is solely available to accredited investors and accredited entities. DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million dollars exclusive of primary residence) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney.

There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potentially adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk. Because investor situations and objectives vary this information is not intended to indicate suitability for any particular investor. This material is not to be interpreted as tax or legal advice. Please speak with your own tax and legal advisors for advice/guidance regarding your particular situation.

Securities offered through Aurora Securities, Inc. (ASI), member FINRA/SIPC. Baker 1031 Investments (Baker 1031) is independent of ASI. To access Aurora Securities’ Form Customer Relationship Summary (CRS), please click HERE. Baker 1031 Investments, Jerry Baker, and (ASI) do not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstances.

Client examples are hypothetical and for illustration purposes only. Individual results may vary.

This site is published for residents of the United States only. Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all services referenced on this site are available in every state through every advisor listed. For additional information please contact +1 415 625 1649 or email [email protected].

Get started in less than 5 minutes.