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2 misconceptions about build-to-rent (BTR)

The build-to-rent (BTR) market has gone from strength to strength over the last few years, and that’s set to continue with investment setting a record high in 2021 at £4.1 billion in the UK alone.

However, there are two common myths and misconceptions about build-to-rent that we’d like to bust in this article.

Build-to-rent has the same definition across the world

Build-to-rent does not have a universal definition, with several types of communities available:

  • Multi-family = These properties feature a collection of apartments in the same building with community and social spaces. Multi-family buildings are the most popular option with operators as they include complete apartments.
  • Co-living = Usually where sharers who aren't related will live, with private bedrooms and shared communal areas. Co-living is often popular in cities where it can provide a more affordable option in those locations.
  • Single family = As you can guess, this is one household without community spaces which often attracts families.

Also, the popularity of the community types above varies the definition by location. Generally with the term build to rent, you can assume in the:

  • UK = people are referring to multifamily housing
  • USA = referencing a collective/community of single-family homes

Build-to-rent is solely for long term lets

The launch of a build-to-rent scheme generally has a stabilisation phase, where landlords experience vacant units for varying periods of time.

Initiating short term lets during these vacant periods is often seen as going against the goal of securing long term tenants. However, short term lets can provide much needed revenue and can be flexible alongside the long term letting efforts.

A showcase for this is a 100-unit build-to-rent (BTR) scheme in Harrow, London, launched by our clients Mount Capital and Sav Group.

Staykeepers worked in parallel with the building’s managing agent, who was focusing on attracting long-term tenants. Staykeepers’ software allowed the agent to see unit availability in real-time, and steadily decrease the amount of units under short-let management as more long-term residents were moving in.

And the results from short term letting? Staykeepers increased revenue to £1.5k per month for each unit under management. Higher than the long term rent for a studio in the area!

Click here for more on their experience.

Short term letting can also be used as part of an ongoing strategy across BTR schemes, click here to contact our team today for more information.

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