WHAT IS THE DIFFERENCE BETWEEN BUILD TO RENT AND BUILD TO SELL?
With Build to Rent (BTR) the fastest-growing trend in the real estate market today, this short video by Michael Bentley asks WHAT IS THE DIFFERENCE BETWEEN BUILD TO RENT AND BUILD TO SELL IN AUSTRALIA?
Australia's residential developers and investors have long favoured the build-to-sell model, where capital is tied up for a shorter period and returns are quicker and often greater.
Build to Rent assets also have a different risk profile to other asset classes, such as commercial office buildings. These differences will influence how BTR Projects will be structured and who the likely players in the sector will be.
Build to Rent means that instead of building apartments with the intention of selling them during construction or on completion (Build to Sell (BTS)) to investors and owner occupiers, the project will be held and retained and leased out to long-term renters. This means the emphasis is on making the homes desirable for the renter demographic.
BTS projects are designed and built with a view to maximising sales of the individual apartments; whereas with BTR the project is based on maximising residents’ enjoyment and liveability, as the developer retains ownership of all the apartments and offers them for longer term rent and retains the building for long term stable rental income.
