


A: Naturally, in order to appeal to a specific section of the property market (i.e. those who wish to rent rather than buy), developers are custom designing BTR sites to suit prospective renter’s lifestyles. Obviously, the properties themselves need to meet modern standards of living, and plenty actually exceed expectations if you’re willing and able to pay the rent they command, but BTR developments in many areas are going one step further than merely designing fantastic apartments.
Developers are now creating, or at least trying to create, mini communities within their developments by including features such as communal areas where people can hang out and socialise together. Such features include the obvious and not-so obvious, from gyms to lounges and games rooms to dining spaces. In fact, many BTR developments are actually closer to hotels than homes.
Tenants will even have their own concierge in some! And the latest technology. And cleaning and laundry services.
Build-to-Rent aims to take the best aspects of Single Family Residences and apartments, and upgrades the experience by developing all properties inside a professionally managed community.
They are much more akin to traditional, gated residential neighborhoods with great community amenities and professional management without burdening residents with Rates and Charges, Body Corporate Fees, Land Taxes and repairs. Or servicing mortgage debt.
A: "As with any housing project, location is vitally important. And, as build to rent is a service-driven housing solution, the audience for the scheme is crucial.
BTR can offer housing in connected locations that would otherwise be unaffordable to commuters, but the location needs to be right to support the density and sustain the community.
Due to the financial firepower behind BTR, developers have been able to unlock high-value sites in urban areas that for-sale developers would have struggled with"
(Russell Pedley, co-founder and director of award-winning BTR market leader Assael Architecture, and co-author of the Urban Land Institute’s Build to Rent: A Best Practice Guide, UK, sponsored by the UK Government)
A: "Shift some the amenity space from private to shared use. There are primary shared amenities that every BTR project should have (mail delivery, lounge area, back of house for storage, loading bay for move in and move out, refuse collection facilities) and there are secondary amenities to reflect the brand. Since BTR buildings are typically institutionally backed and owner-operated, the building has to perform as an asset for both the investors and residents.
This means that facilities such as gyms and swimming pools must be continuously assessed both in terms of what they add to the community and their operational costs. Fostering a sense of community within a BTR development is essential, as it leads to higher retention rates that contribute positively to the financial performance of the development. When people love where and who they live next to, they stick around!" (Russell Pedley)
Experts predict a build-to-rent (BTR) revolution coming to Australia
A: "BTR means a single owner operating all units in the building, so it’s difficult to see how the individual investor can participate in this business model, other than indirectly through collective investment funds that target this sector.
Aside from funds, the closest proxy is probably the Property Investment Club model in the UK where individual investors buy units in a building that is collectively leased and managed for rental on behalf of all owners.
Unfortunately, this sector has something of a murky past where high returns were promised but not met, which left some small investors unable to service buy-to-let mortgages from rental yields.
Perhaps better providers coming into this space in future would a good way for small investors to compete and benefit from the growth of the BTR model."
(Jonathan Gains, former director of UK real estate business LIV Group who helped to create a new operating model for Build to Rent (BTR), including the development of a proprietary mobile app platform to deliver resident services)
To invest in Build to Rent property, there are only a limited number of opportunities for individual investors to go down.
So in saying that you can invest in shares of a BTR developer. Some investors have made the mistake of investing themselves in student housing or buying serviced apartments, thinking this perhaps was Build to Rent.
Far from it! These investments have mostly been very unsuccessful for individuals in terms of capital growth, although very lucrative for developers.
"Everything You Need to Know About "BUILD-TO-RENT"...Simplified
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21 September 2020 - Vellum Funds Management, part of financial corporation Vellum Group, and leading developer Urban Property Group (UPG) today launched The Places Build to Rent Fund(Places BTRF), a property fund focused on the new fast-growing property class, build-to-rent. The fund is the very first build-to-rent fund based in NSW.
The first stage for Places BTRF is a $132 million capital raising with $66 million already committed, and is now open to investors to participate in the remaining subscription. The fund will have subsequent opportunities for investment and with further stages the fund is expected to reach $1 billion in the next 5 years.
The fund gives institutional investors access to an Australian asset class that is set to grow significantly in the coming years, particularly in NSW where the state government halved land tax for such developments.
Places BTRF is targeting minimum 5% gross return for its investors.
Focused on Sydney developments, the fund provides an opportunity for investors, including superannuation funds, to back property developments with a social purpose, as well as a healthy and stable return, with lowest possible risk.
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