Experts Offer Some Important Lessons in Build-to-Rent
The right operations can draw in higher income households.
John Burns Real Estate Consulting held its third annual summit on build-to-rent strategies and has offered lessons from some of the more experienced BTR practitioners in the industry.
The first and likely most important, because it drives the advantages of the other strategies, is the demographics of people opting for BTR.
“BTR operators are attracting an even higher income household than previously assumed,” the firm says, due to premium quality design and building product and better property management services than a non-professional landlord is likely to provide. Beside everything else, this insight will help drive the success of BTR operations.
Next, as anyone watching the industry and markets might guess, work-from-home strategies are pushing rental demand for houses over apartments, which complex noise can make it difficult to concentrate. And while many companies are pushing for employees to return to the office, many of those workers really don’t want to, at least not full-time. With a tight labor market, executives will have difficult times forcing them into compliance. So, in BTRs, design in multiple workspaces.
Large home and lot deals will be more attractive to buyers, not renters, who aren’t looking to pay that type of premium. Also, avoid the one-size-fits-all-locations model. Look to what consumers local to a new project want.
Don’t go all in on amenities because you don’t need a long list. The three biggest wins in the eyes of renters is better parking, privacy, and a yard. Past that, consider adding one or two amenities only, otherwise you’re spending money for diminishing returns.
Smart home tech can make your project stand out. Look for what in particular consumers want, but also realize that some things will become standards in the future, so be sure to choose wisely so you don’t get left behind in the future.
Rentals aren’t like sold homes. People move in and out more frequently, so design and build with that in mind to keep turnover and repair and maintenance costs down. Some examples of smart choices are minimal carpeted areas, laminated faux wood floors, and stainless-steel appliances. Keep appliances standard and make sure halls and doorways are wide enough to make moving easy and to reduce the chance of furniture banging into walls, floors, and ceilings, damaging the surroundings.