B2R, basic tips

Build to rent (BTR) is seductive. Real estate investment in residential rental is on the rise. Real estate investment in the ‘living’ sector has exceeded €1 billion in the first quarter of 2022. Specifically, BTR transactions have reached €700 million transacted, while PRS (private rented sector) transactions have exceeded €200 million.

Faced with these volumes, it is very important to know and understand the terrain. This is clearly an asset on the rise, but you have to tread carefully and fine-tune your approach in order to achieve the expected results. That is why the know-how of the Property Management expert is key from the outset. Reaching the goal will depend on the project having a solid foundation. Thus, it is necessary to define the product well, determine the amenities of the building and the qualities to be used.

Once the project has been defined, the Property Manager will become a key figure in the relationship with the builder. He/she knows the product to perfection and will therefore be very effective throughout the entire process, from the initial contractual negotiation, through the construction itself, pre-delivery and post-sale.

The post-sale period of a build to rent must be managed properly. We must take into account that there will be homes that can be rented months after the work has been completed, so that the guarantees are no longer in force. That is why the private supplies are not contracted until then and some problems may arise in the operation of some facilities or appliances.

All this well managed and planned should not be a problem. In the same way that maintenance costs related to supplies, elevators or other elements of the building often escape the investor’s radar. A good Property Management will save a lot of costs in this area. Let’s keep in mind that, for an investor, paying the maintenance fee -accounting-wise- is a cost because if the asset is not well maintained, its profitability as well as the purchase value and capital gain could be affected. The good Property Manager will apply a series of analytical techniques to identify or deduce a series of measures and relationships that are significant. Working this from a good start and making a good selection of suppliers are always important elements in this regard.

A final element that the investor should not disregard is the pre-marketing marketing campaign, an element that Property Management experts are working on with increasing dedication and with a high degree of specialization in the segment.