Build to Rent has been making waves in the property industry after tax laws changed last year to make it an attractive investment. But, what does that mean for tenants and how is Build to Rent different from standard renting?
Build to Rent (called Multifamily in the US) has been around for decades, even though it is relatively new here in Australia. While Australia is rife with Mum and Dad investors looking to make some extra income from property, Build to Rent basically means renting directly from the developer.
A developer will build an apartment building, usually in a popular area close to the CBD. Then, instead of selling the apartments to Mum and Dad or overseas investors to rent out themselves, they will rent the apartments out directly to tenants, or consumers as they are called in Build to Rent.
The buildings usually have a lot of amenities such as gym, bike parking, BBQ areas, common living areas, common working areas, concierge service, swimming pool and often large areas that can be hired out for gatherings or have events organised by building management for consumers to attend if they wish.
As Build to Rent companies prefer their consumers to stay long term, they encourage them to personalise the apartments by painting the walls, hanging picture frames, and pets are also often encouraged and have their own amenities in the building. Having that sense of longevity (rather than always being afraid you’ll be kicked out at the end of the often 6-12 month fixed term agreement) is why Build to rent is so popular overseas. Consumers feel like they can truly make the place their home and not be at the mercy of an unsophisticated landlord.
So, with all those benefits, its easy to see why more and more people are turning to Build to Rent as a new way to rent. But what are the downsides?
Well, there is a "premium" within the rental payments due to living in sought after areas and the amenities that are included. While this is often negated by the benefits you receive, it can be off-putting when you see a side by side comparison with a standard lease.
Having been to visit a nearby Build to rent building I can see that the "premium" is more than justified, so if you are considering a Build to rent apartment but are put off by the rent, I’d encourage you to go and have a look first at what you're getting for your money!
Want to self manage your property yourself without using an agent? Use Dwell Nicely property app, to help find and manage tenants yourself.
Dwell Nicely property app available to download through the Apple Store and Google Play. Download here