Build-to-rent developments are a big success story for investors and tenants in the US and catching on fast in the UK. In Australia there were 11,000 build-to-rent properties in the pipeline as of November 2020. Enticing flagship projects like Mirvac’s LIV Indigo in Sydney and Smith Collective’s Gold Coast apartments are already taking applications from tenants.
Assemble, a housing developer and community management business, has even launched its own innovative pathway to homeownership called Assemble Futures, also known as ‘rent-with-the-option-to-buy’ and their 4 Ballarat St project in Brunswick (pictured above) is launching in May.
Should traditional property owners be worried about how their rental stacks up compared with build-to-rent offers? And what should property managers make of it all? Brock, Scott and Kathryn from the Kolmeo team tell us why the build-to-rent approach is a welcome change for the whole Aussie rental market.
A dream come true for tenants
Sometimes people don’t know what they’re missing until they see it. And with these first cabs off the rank in the build-to-rent space, tenants are about to get their first look at what it means to have a rental designed to keep them blissfully happy in the same way a hotel does. This is a really important transition from tenants taking what they can get to having all their boxes ticked, and then some.
Want to have a pet in your apartment? With build-to-rent properties you can and there’ll be a dog wash area on site to keep your pooch squeaky clean. Plus the properties are built to last because the developer is the owner and they don’t want to be stuck with the bill when things fall apart or appliances break down. And when something does need a repair, it’s going to be sorted lickety-split because the maintenance contract is for the whole building, not just a job for one property owner who might/might not pay on time. Not only that, but your property will be maintained and even renovated to a strict schedule.
Unlike renting in a block where each one is owned by somebody different, the single owner of this whole property won’t want one tenant spoiling the show for everybody else. That noisy neighbour isn’t going to be ignored by their owner when they’re putting all the other tenancies at risk. This is a very different scenario to one that often plays out in high density apartments. In these cases, the one problem tenant who pays their rent on time gets to stay, no matter how they might misbehave.
But perhaps the biggest win of all is you won’t have to leave until you’re good and ready. As long as you don’t make trouble in rental paradise, you can stay as long as it suits you. And so renting as a location and lifestyle choice becomes way more viable.
Happy tenants are better for business
A property that’s set up perfectly to make them feel welcome sounds like a fantasy to most tenants. With build-to-rent developments it’s actually happening. Developers are doing everything they can to make tenants feel like they belong because it’s better for investment outcomes. Some property owners, by contrast, can lose sight of this goal.
By treating tenants as valued customers, there’s a good chance property owners can reap greater rewards from their investment too. Vacancies, churn and maintenance issues going unreported are less likely to happen when tenants are feeling very much at home in their rental. They’re more likely to accept rent increases too and take care of minor issues themselves. This all adds up to a better bottom line result for owners.
It can be hard for agencies to make their tenants a priority. After all, they’re paid by owners and that means acting in their interests comes with the territory. With build-to-rent properties, tenants become the valued customer and the paradigm shifts. But instead of seeing this as a threat, it actually creates a golden opportunity for agencies and owners to get things back in balance and show tenants the love.
What’s good for business is also good for your team. Imagine for a moment the working conditions for a build-to-rent property manager. There’s always enough money for maintenance, so you won’t be needing to soothe a tenant waiting for their new cooktop while coaxing an owner to part with the cash to pay for it. You don’t have to manage multiple relationships with a whole range of property owners which can really reduce workload.
Instead you spend your day building great connections with tenants who love their home sweet home, solving their problems with ease and feeling like a superhero. So, the build-to-rent offer shapes up as an amazing drawcard for property management talent too. If there’s a build-to-rent property coming to a suburb near you, then prepare to be dazzled by this shiny new kid on the block.
Learning from a winning formula
In our own encounters with the build-to-rent world, both here in Australia and in the US, we’ve been impressed, to say the least. In fact, one of the catalysts for creating many of our Kolmeo features was seeing what happens when the rental sector lifts its game to this level. Even for the tenants who can’t quite stretch their budget to a build-to-rent property, knowing it exists is going to put the idea in their head that they deserve more. And that’s something we at Kolmeo wholeheartedly agree with. Tenants, as well as property owners and property managers, do deserve more.
That’s why we’ve designed Kolmeo in a way that raises the bar for an easy and frictionless renting experience. It’s not just about mobile-first design to make the Kolmeo app intuitive and easy-to-use. We’ve looked at each thing that elevates build-to-rent experiences for the tenant and explored how Kolmeo can solve for that and enable agencies to deliver something just as compelling.
Some things we’ve got in the pipeline include features to make maintenance less of a headache such as integration with a buy-now-pay-later service to make sure cash flow doesn’t hold up a fix or replacement. With our Kolmeo services marketplace, which we’re working on for launch later this year, we bundle access to all these amazing amenities for tenants who want a build-to-rent experience. This is how we’re supporting agencies in offering a really compelling value proposition for tenants.