World over, the Build-to-Rent (BTR) sector is gaining unprecedented momentum in the age of advanced technologies. What exactly is BTR and how is it different from the private rented sector (PRS)?
In a nutshell, the private rented sector (PRS) is an overarching term applied to a range of real estate solutions geared to profit from rentals whereas build-to-rent (BTR) signifies a more niche segment within the larger bracket of PRS. PRS is any property that is privately owned and rented out, but in build-to-rent properties, the idea of catering to specific target groups of tenants is prefigured in the design, conceptualization, architecture and services right from inception.
BTR marks a big shift from the mere brick-and-mortar understanding of rental properties. It promises a certain lifestyle to its future inhabitants. It predicts the needs of its occupants and is conceived to deliver an unparalleled experience of living in an environment where everything is already taken care of. BTR not only takes advantage of the built-in environment to suit the particular tastes or preferences of tenants but is designed to accrue long-term returns for the investors.Â
SUMMARY
– Conceptually, build-to-rent (BTR) is different from the private rented sector (PRS). BTR offers a more specialized living experience targeted at specific communities of renters.
– BTR leverages the built-in environment to ensure tenant satisfaction and is designed to accrue long-term returns for the investors.
– BTR deploys cutting-edge technologies at every stage of its development to meet its pre-defined objectives.Â
– AI, ML, and IoT powered Data Analytics, Digital Lease Management systems, Visitor Management systems, pre-installed Smart Utilities, Property Management Systems, and Community Networking apps are the technologies that are the bedrock of any successful BTR enterprise.Â
– Smart technologies enhance tenant satisfaction and help investors accrue long-term returns.Â
– The BTR sector is growing at an unprecedented scale.Â
Technology is the force that propels BTR to the next age of real estate. Right from the beginning, it deploys the best of what PropTech has to offer to meet its pre-defined objectives. Data analytics serves as the bedrock of any successful BTR enterprise. A thorough market analysis of rental demands, key demographic trends and economic indicators feeds into the robust planning structure of BTR projects.
Identifying potential rental communities through customer segmentation right at the beginning can result in a focused BTR strategy that can provide exactly what the tenants demand. Data addresses another vital concern of property builders, i.e. location. Building BTR properties at sites where the demand for rental accommodation is high can prove to be a game-changer.Â
BTR utilizes technology at every stage of its development which makes the selection of the right tech solutions vital to the success of any BTR project. Sales and marketing teams of BTR projects can leverage the technology of automated listings, virtual property tours and targeted outreach to maximize conversions. It is important to emphasize that BTR is popular among a younger demographic, be it young professionals or new families.
Gone are the days of endless paper shuffling between brokers, renters and property owners. Digital Lease Management software has streamlined the process of leasing out properties to tenants through paperless management of contracts, identification and invoicing.
There is a limitless scope for the application of smart technologies like home automation systems in BTR properties. Starting from security solutions like visitor management systems, access control, smart locks and CCTVs, technology is integrated into every aspect of BTR operations. Recent developments in Artificial Intelligence (AI), Machine Learning (ML) and Internet of Things (IoT) have transformed living experiences across the world. Everyday utilities like lighting, heating systems and water connectivity no longer require manual monitoring. With the tech-savvy population settling for nothing less, BTR properties often come with pre-installed smart utilities. Deployment of IoT sensors and AI controls in home monitoring systems can achieve a considerable reduction in energy consumption and lower operational costs for property owners. Smart technologies have another critical advantage, i.e. sustainability. By generating data on building emissions and energy use, these technologies have transformed the way BTR properties are built and managed.
Experts have repeatedly pointed out the significance of the right Property Management System for BTR. Resolving maintenance issues instantly and efficiently has the power to retain tenants for longer periods. Property Management Systems effectively keep track of new or ongoing maintenance tasks and issues. They are a valuable resource for any Property Manager who has to delegate responsibilities to support staff across diverse domains. Property Management Systems consolidate the wide network of software and processes that keep BTR properties up and running 24X7. Property Management Systems that integrate financial management tools are an asset for developers and investors to maintain accurate records of service fees and expenses associated with managed BTR properties.
What sets apart BTR from PRS is the unique living experience that it offers to a community of tenants. Common spaces like lounges, swimming pools, play areas and gyms inspire a sense of community among renters who come from diverse backgrounds. Community Networking apps can bring together these social interactions on a common digital platform and make tenants truly feel at home. Not only do renters develop an affinity with each other but also identify strongly with the BTR brand that brought them together. BTR companies are making use of social media technology more than ever to create customer relations not only with individuals but with entire communities of tenants.
There are a range of factors boosting investor interest in the BTR sector. Shortage of rental units is the foremost among them. In major markets like the US, there is also a substantial chunk of potential home buyers who are considering the rental alternative before investing in a life-long home.
Young professionals with remote jobs prefer BTR properties for more space and a better lifestyle. Young families too are motivated by the prospects of efficiently managed utilities and the vibrant communities that BTR has to offer. In 2023, the BTR sector in the UK alone attracted investments worth £4.3 billion. The integration of PropTech with the BTR sector is expected to set the bar even higher.Â
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By Proptechbuzz
By Ravi Kumar
