With a focus on long-term rentals, the concept of build-to-rent (BTR) takes a more consolidated approach to a traditional business model. Featuring the likes of modern amenities and catering to unique lifestyles, it’s a strategy that’s attractive to many tenants.
Management and maintenance are streamlined here, which helps ensure consistent quality and reduce costs. However, there’s a good chance you’ll find BTR locations with a bit of a higher price tag.
Considering the many woes that come with traditional practices, BTR is being more widely adopted to meet the needs of expanding communities. For this article, you’ll learn about build-to-rent concepts, and what makes them unique compared to a traditional approach.
Characteristics of Build-to-Rent
There are some common characteristics that you’ll find with many BTR properties. From high-quality amenities to more robust management teams, there’s a bigger support system with BTR. These properties are professionally managed, and this is usually facilitated by larger management companies as well.
How this differs from traditional renting can be seen in several areas. The traditional way includes developing a building for sale and then turning it into a rented property down the road. It also comes with a lot more inconsistencies with maintenance, management, and many other issues.
Economic Implications for Investors
On the surface, BTR arrangements can promise a long-term and steady source of income in the right situation. The benefit of professional management is a big selling point to investors, but these properties may come with a higher upfront cost.
In the same vein, seeing any kind of financial return can take a while and tends to be slower than traditional renting. Then again, the risk with BTR can be much lower due to more robust oversight and opportunity for growth. While BTR may offer more financial stability and scalability, it isn’t immune to shifting economic factors.
Market Dynamics and Tenant Preferences
There are several unique details that support investment decisions regarding BTR properties. Not only do they cater to a younger crowd, but the flexibility in leasing, sustainability, and amenities is part of what drives future growth.
In many ways, traditional renting just isn’t as flexible of an option as you’re usually dealing with individual landlords. They may not have access to as many resources as the organizations handling BTR properties. In short, the inclusive and almost all-in-one approach of BTRs is a part of the overall healthy market dynamics.
Tenant preferences are bound to be different from one person to the next. That’s why BTR generally includes so many amenities and “selling points,” as they try to cater to as many different groups of people as possible.
Endnote
While the likes of Investa build-to-rent isn’t a brand new concept, it has definitely grown in popularity over the years. This includes both tenants and investors, as the benefits stack up on both sides.
This doesn’t mean traditional renting is obsolete, but it has posed some challenges for individual investors and landlords. Nevertheless, a build-to-rent situation makes sense for a lot of people, especially considering the active, shifting lifestyles of young people.
