Zach Lemaster, founder and CEO of Rent to Retirement, is pushing a contrarian play in today's rental market: new-construction properties with only 5% down payment structures. While most investors abandoned turnkey rentals when mortgage rates climbed past 7%, Lemaster argues the model still works for disciplined buyers.

The traditional turnkey rental collapsed when financing costs spiked. Rising mortgage payments crushed cash flow on properties priced for lower rate environments. Investors retreated to fix-and-flip strategies or stepped out of the market entirely.

Lemaster's approach targets new construction specifically because these properties offer built-in advantages turnkey buyers lost. Newer homes carry extended warranties, lower maintenance costs, and modern efficiency standards that reduce utility expenses. The 5% down requirement makes initial capital demands manageable, spreading investor dollars across multiple properties rather than concentrating risk in single deals.

The model works on volume and precision underwriting. Lemaster focuses on secondary and tertiary markets where acquisition prices stay reasonable and rents support debt service even at elevated rates. Markets like Memphis, Little Rock, and Kansas City offer rent-to-price ratios that older turnkey centers cannot match.

For investors, this matters because it opens a path forward when conventional wisdom says rentals don't pencil anymore. You avoid competing for renovated properties in hot markets where prices reflect optimistic cash flow assumptions from 2021. New construction lets you lock in predictable expenses and capture depreciation benefits immediately.

For sellers and developers, it creates demand. New-construction projects that struggled to move inventory now have a buyer pool seeking properties specifically engineered for rental income. Developers willing to offer 5% down financing gain competitive advantage.

For tenants, this expands rental supply in markets starved for quality housing. New-construction rentals attract working professionals and families seeking modern amenities and reliable landl