Did you know why build-to-rent is growing in popularity in Australia? This is a property model where developers are allowed to build residential homes or apartments specifically to be rented out and not to be sold. This offers long-term, professionally managed rental housing, which often provides better amenities and security.
Table of Contents
How a Build-to-Rent Model Works
1. Development Phase
A developer will build a block of units, particularly apartments, for the purpose of getting rent. These properties are also designed for long-term durability, comfort, and communal living.
2. Ownership Procedure
The whole building will remain under one ownership, whether a property company, superfund, or institutional investor. With this type of rental property, tenants can rent directly from a single landlord.
3. Management and Services
A team of professional property managers will handle the ins and outs of the complex. The renters will be able to enjoy hotel-like amenities, including gyms, lounges, co-working spaces, and parcel lockers.
4. Leasing Procedure
In comparison to traditional rentals, build-to-rent leases tend to be longer and more stable. Some properties offer flexible leasing, pet-friendly options, and built-in maintenance support.
Renters will be able to take advantage of higher quality and consistency, greater security of tenure, and a professionally maintained environment.
Built-to-Rent vs. Traditional Renting
In terms of ownership, built-to-rent houses only have one professional landlord, while traditional renting has individual landlords. Built-to-rent properties are also professionally managed, while traditional renting is managed by an individual or agency.
In comparison to traditional renting, which usually covers 6-12 months, build-to-rent properties are more flexible and offer longer leases. The amenities are also often inclusive of shared spaces like gyms, co-working lounges, and rooftop gardens, unlike traditional renting, which varies widely and usually includes none.
Build-to-rent properties also offer a quick response to maintenance needs due to the availability of on-site teams. On the other hand, traditional renting will depend on the landlord or the responsiveness of the agent. Most of all, BTR has stronger tenant protections and stability in terms of tenant security, while traditional renting will be dependent on the owner’s decisions.
Why Invest in Built-to-Rent?
This offers investors stable, recurring income from long-term tenants. This is also advantageous because of the growing rental demand in Australia, particularly in cities. Moreover, this type of property appeals to millennials and downsizers who want hassle-free living. More importantly, this may offer tax advantages or government incentives in some states.
However, there are some factors that may affect your decision because it requires large-scale capital. Thus, it is more suited to developers, institutions, or syndicated investments. Returns are also slower than quick resale property flipping. Likewise, planning approvals and zoning can be complex, tedious, and time-consuming.
Do you like to discover the benefits of build to rent in Australia? We can help you book a free tour of our famous build-to-rent apartments. Feel free to give us a call if you want to discuss premium build-to-rent apartments in prime locations, such as close to the city, parks, beaches, great food, and culture.
