Build-to-Rent vs Build-to-Sell

The BTR vs BTS decision is about risk, return, and time horizon.

Build-to-Sell

Key metrics: return on cost (15-25%), absorption rate, comparable sales. Shorter capital cycle but market timing risk.

Build-to-Rent

Key metrics: yield on cost (6.5%+), cash-on-cash return (8-12%), cap rate spread, breakeven occupancy.

Decision Framework

Favor BTS when price-to-rent ratios exceed 18-20x or rates are rising. Favor BTR when YOC exceeds cap rates by 100+ bps and rental demand is structurally strong.