If you underwrite build-to-rent from out of state, the two numbers that decide the deal are what a house costs to build in this market and what it rents for once it’s up. Most of what you can buy is a national cost database and a guess. This is 30 rental houses, actually built, tracked to the dollar — the yield they throw when you hold them, and the margin when you don’t.
The project
Thirty single-family rental homes, built as one build-to-rent community and held — not flipped. Four repeated floor plans, 1,209 to 1,500 sq ft, three and four bedrooms, each with a covered porch and a maintenance-inclusive lease (lawn, pest, HVAC filters, upkeep). Thirty houses off four plans is the whole trick: repetition turns the estimate into the actual.
What it costs to build — one home
Real, from the budget. Grouped from the cost codes into the trades an investor thinks in. This is one house, averaged across the 30 (plans run 1,209–1,500 sq ft).
| Trade | Cost |
|---|---|
| Framing (lumber, trusses, labor) | $26,675 |
| Foundation & concrete | $22,290 |
| Supervision | $12,000 |
| Siding, gutters & porch | $11,341 |
| Sitework, utilities & temp services | $11,309 |
| Interior doors, trim & hardware | $10,525 |
| Plumbing | $9,500 |
| HVAC | $9,377 |
| Drywall | $8,466 |
| Electrical | $8,278 |
| Cabinets, counters & tile | $7,954 |
| Paint | $7,095 |
| Permits, fees, design & accounting | $6,778 |
| Roofing | $6,692 |
| Flooring (LVP & carpet) | $5,739 |
| Windows & exterior doors | $4,957 |
| Insulation | $2,380 |
| Glass & mirrors | $1,565 |
| Budgeted total / home | $172,920 |
That’s about $133 per square foot budgeted at ~1,300 sq ft. Framing and concrete are 28% of the build — the same two trades the market moves you on. Supervision is a $12,000 line, not an afterthought: it’s what holds the other seventeen.
Built under budget — thirty times
Here’s what a system looks like when you run it across a whole community, not one house.
| Per home | All 30 | |
|---|---|---|
| Budgeted | $172,920 | $5,187,587 |
| Actual | $160,361 | $4,810,836 |
| Under budget | $12,558 | $376,751 (7.3%) |
Thirty homes delivered $377,000 under budget — about $12.5k of margin protected on every house. And the consistency is the real signal: across all thirty, actual build cost landed in a $45k band ($141k–$187k); the single home that ran over its budget missed by ~$3k, and the tightest came in $26k under. That’s not a lucky house — it’s the same house, built thirty times, with the variation squeezed out. Deming’s whole point: control the system and the results stop surprising you.
Land in, all-in
| Per home (actual) | Per home (budget) | |
|---|---|---|
| Construction | $160,361 | $172,920 |
| Land basis (illustrative $29k) | $29,000 | $29,000 |
| All-in | $189,361 | $201,920 |
At an illustrative $29k lot (our Buffalo Grove number), all-in lands around $189–202k per home. Drop in the project’s confirmed basis and this closes exactly.
What it rents for — and yields to hold
This is the number a hold investor lives on: the yield on what the house cost to create.
- Rent: $1,850–$2,500 per month, by plan — call it ~$2,175 on the mix, or ~$26,100 a year per home.
- Yield on cost: against the real build cost alone, that rent is a 15% return; against an all-in of ~$189–202k, it’s ~13–14%.
| Yield on cost | @ $1,850 rent | @ $2,175 rent | @ $2,500 rent |
|---|---|---|---|
| On build cost ($160k) | 13.8% | 16.3% | 18.7% |
| On all-in (~$189k) | 11.7% | 13.8% | 15.8% |
Three ways out — the optionality is the margin of safety
Most rental deals have one exit: hold it, and hope the hold still makes sense in five years. This one has three, and the owner can switch between them during the build or right after it — if rates move, if capital’s needed elsewhere, if the strategy changes. That flexibility is worth as much as the yield, because it’s what lets an investor underwrite the deal without betting on a single outcome.
- Hold and rent — ~13–15% yield on cost, maintenance-inclusive. The base case above.
- Break it up and sell one-off. Each house sells retail at $255,000–$285,000 to an owner-occupant or a small investor — a ~$66,000–$96,000 gross spread over the ~$189k all-in, roughly a 35–50% markup. If the investor’s position changes mid-stream, they don’t have to hold; they liquidate house by house at a profit.
- Sell the stabilized community as a portfolio. Leased up, the thirty trade as one package to a regional or institutional buyer on a cap rate — the block exit.
What I’d change — from the data
- The lot that ran over. One house out of thirty missed its budget — by about $3k. That’s a rounding error across a $4.8M program, but the discipline that keeps it to $3k is exactly what’s worth protecting; it doesn’t survive inattention.
- Nail the land basis in writing. The build side is proven to the dollar across thirty homes; the return now hinges entirely on the lot number. On the next community, the basis is the first thing to lock, not the last.
- Sell the maintenance-inclusive model harder. Lawn, pest, filters, upkeep bundled into the lease is why these hold occupancy and rent at the top of the range — it’s a moat that costs little and reads as premium. It belongs in the underwriting, not just the brochure.
Get the benchmarks
I publish one of these a month — the real cost to build in Wichita, updated as the market moves. Build-cost and rent benchmarks, no pitch. If you underwrite deals here and you’re done guessing, put your email below.