Higher BTR Rents Tend to Correlate With Greater Resident Satisfaction

There is a positive correlation between build to rent developments with higher rents and a higher level of satisfaction, likely because properties with higher rents had better amenities, according to a report by CBRE based on build-to-rent homes in London.

It didn’t measure the performance based on operators, instead finding that all BTR developments are performing well in this area, regardless of rental level. Professional BTR management is a large driver of residents into the sector, the report said.

Higher rents were also charged in higher-quality neighborhoods, which could also have impacted higher resident satisfaction.

Get What You Pay For

Brad Case, PhD, CFA, CAIA, Chief Economist & Director of Research for Middleburg Communities, tells GlobeSt.com that residents “are not going to express satisfaction just because they’re paying a lot, but they’re always willing to pay for high-quality units with solid amenities in good locations.

“You have to make sure they’re getting what they paid for. That’s what separates purpose-designed, well-managed BTR communities from simply trying to rent houses that were not actually built for renters.”

Attractive Amenities, Smart Technology Key Features

Matthew Levy & Christopher Stark, partners, Cox, Castle & Nicholson, tells GlobeSt.com that homebuilders and investors continue to exhibit ongoing enthusiasm for build-to-rent (BTR) projects as homebuilders gain comfort building and operating BTR projects.

“Last year, institutional investors and homebuilders ventured and committed substantial dry powder to pursue BTR projects,” the partners said. “The consensus among homebuilders and investors is that BTR projects will gain in popularity with tenants as these projects offer a single-family residence experience with attractive amenities and smart technology without the high financial barrier to homeownership.”

Additionally, the cost to build BTR projects (in comparison to the cost to build multi-family apartment buildings) is often more favorable as homebuilders and investors capitalize on the homebuilders’ ability to construct single-family residences in an economic and efficient manner and the availability of more affordable land in communities with lower densities, according to Cox, Castle & Nicholson.

Professionally Managed BTRs a Solution to Housing Shortage

Kori Covrigaru, CEO, PlanOmatic, tells GlobeSt.com that the biggest takeaway from this report is the high score of professionally managed BTRs regardless of rental rates.

“Most of our clients in the SFR industry in the United States are already participating in some sort of BTR opportunity or certainly taking a hard look at these as an extension of their current portfolios,” Covrigaru said.

“We have a housing shortage in America and filling this void with professionally managed BTRs is an ideal solution. BTRs are new by definition and designed for the residents of today. In a world where you operate much of your life from your phone, the expectation of living in a home that is professionally managed often affords the same delightful experience provided by the property manager.”