Surprise! The top 3 trip ups in BTR

As a nascent segment of the property industry, there is plenty to learn in the build-to-rent (BTR) space, and there are several unusual risks that can trip up even the savviest asset owner.

1. Long-term leasing requirements

Repurposing a regular tenancy agreement for BTR product can get you in trouble. In BTR you have a legal requirement to offer a long-term rent as part of the potential tax implications for the project. It is critical that you present a long-term option in the terms and conditions on lease documentation – such as a tick box where the renter acknowledges such a lease was offered.

2. What renters will actually pay for

We so often see a mismatch between the idealised view of what a BTR building should offer, and what renters want in their new address. So often financial models are created that require renters to pay for services and extras – but they price up extras renters expect, and give out services renters don’t need. Renters are getting more used to paying for car spaces and storage, but they don’t expect to pay for common dining areas, coworking and events.

3. Flooding the market with advertising

When a new building launches with dozens of apartments for lease, flooding the market with listings is a common mistake that can inadvertently devalue the project. This approach sets a tone of oversupply, encouraging renters to negotiate and push prices down. Now, consider a smarter strategy: releasing stock gradually. This method not only creates a sense of scarcity that drives demand but also strategically benefits renewal pacing in 12 months, ensuring a more stable and sustainable leasing cycle.

With its own intricacies and a service-based offering distinct from build-to-sell, BTR increasingly requires specialist project leasing partners to maximise occupancy rates, meet financial obligations and drive long-term tenant retention.

With an ability to reduce vacancy rates and shorten leasing timeframes, specialist project leasing partners, such as Infolio, are a savvy way for developers to derisk their projects and drive success.