A build-to-rent (BTR) scheme is designed to develop residential properties for long-term rental – rather than sale. They are usually managed properties with high-quality amenities such as gyms and communal lounges.
From the outset, these BTR developments are purpose-built for long-term rental so that tenants can have greater security with more stable, longer leases (like 1-3 years).
BTR properties are normally managed by dedicated property management companies who handle everything, from building maintenance and repairs to dealing with tenant issues. If you’re looking for high-quality property management from a dedicated, expert team, contact us at J Property Management to discuss your needs.
What is Build to Rent?
Unlike traditional property development, Build to Rent properties are designed to appeal to long-term renters rather than buyers.
For tenants, they offer a modern and convenient set-up, usually with on-site staff and additional amenities. Tenants also benefit from more stability as the rental periods tend to be on a longer-term basis than regular rentals.
The Build to Rent model is also appealing to investors. Rather than investing in a building block which they later sell for capital gains, they have long-term returns through regular rental income which offers a high rental yield. Investors for these types of developments tend to be large property development companies, institutional investors or even local pension funds. Lloyds Bank, John Lewis and Legal & General are just some of the companies already investing in Build to Rent developments.
Generally speaking, Build to Rent developments are usually blocks of flats in London or other large city centres. However, as Build to Rent becomes more commonplace, developers are branching out to build in smaller cities and the suburbs.
Some governments, including Australia and Spain, actively incentivise investment in BTR projects to increase rental supply.
Who Owns BTR Buildings?
Unlike traditional flats, the units of a Build to Rent property are not sold to individual buy-to-let landlords and are not owner-occupied. Instead, the properties are owned by the institutional investors who funded the property’s development – such as pension funds, financial services companies or insurance companies.
So, the entire building and all of its units are owned by a single entity and then managed by a professional property management company. This means that tenants are constantly taken care of, the buildings are well-maintained and any issues are dealt with as smoothly and as quickly as possible.
How Does Build To Rent Work In The UK?
Build to rent in the UK is not a new concept; in fact, it was introduced in 2012 when Stratford’s East Village turned the apartments of the Olympic athletes into private long-term rentals.
Since then, thousands of Build to Rent properties have been developed, backed by huge entities such as the UK government.
What Are The Benefits of Build to Rent?
There are various reasons why companies and institutions are choosing to invest in Build to Rent developments including the following:
Secure tenancies
Build to rent properties usually come with longer tenancy agreements of up to 3 years, or maybe more. This can provide a great deal of stability for tenants, especially families wanting to settle down. Some Build to Rent schemes even let tenants have a pet, making it an appealing option when compared to many traditional flat blocks.
Unified management
For Build to Rent properties, there is normally one dedicated property management company that oversees the whole development. This means that tenant issues can be resolved quickly and that maintenance and repairs are carried out efficiently.
Option for affordable housing projects
Build to rent schemes are not just for luxury builds with countless amenities but also work as a way of increasing affordable rentals in an area.
Greater focus on sustainable buildings
Within the Build to Rent model, there is a greater focus on sustainability of the buildings because they are designed with long-term focus. This means that the designs consider the ongoing maintenance and operational costs leading to better building design, more sustainable building materials and greater efficiency.
How is Build to Rent Different From Buy to Let?
Build to rent and buy to let have a few key differences:
Ownership
For buy to let properties, there will typically be individual landlords; Build to Rent properties are owned by a single entity – usually a large company or a financial institution.
Property type
A private landlord may have a property portfolio with multiple properties to rent out in different locations. For Build to Rent, it tends to be one big development in one location designed for multiple, long-term rentals.
Management
With buy to let, private landlords could choose to manage the property or outsource to a property management company to help with things like tenant sourcing, repair and maintenance or rent collection. Build to rent developments always use a professional property management company who handles everything related to the building and its tenants.
Investment focus
With buy to let, landlords are typically looking for high rental yield from rental income but may also be thinking about property appreciation and resale. Build to Rent investors will be seeking a long-term investment from rental income.
Manage Your Build to Rent Property with J Property Management
If you want seamless operations in your Build to Rent development, you can count on us. At J Property Management, we are an expert and dedicated team committed to supporting you.
Whether you have a Build to Rent property or an entire property portfolio, we can handle everything from sourcing reliable tenants, guaranteeing rent collection and ensuring that repairs are carried out as soon as possible. Whatever you need, we can help.
Contact us today to discuss your specific property management needs.
