In many ways the concept is not new: people have been building apartments for rent since Roman times.
The trend emerges in response to the growing demand for quality rental housing with its new real estate developments reflecting the changing needs and priorities of modern rentals. Build to rent is opposed to the usual formula of Build to sell or build to sell.
It has its focus on service, with BTR developments offering professional on-site management and commodities, with shared spaces such as resident lounges, work areas, and fitness centers that are housed within residential buildings.
In terms of investment, less capital is required when building a significant number of units, from 50 to 500, generating high returns and obviously with less risk.
They are built in geographical areas with greater stability and legal certainty, with good public and private transport connections, with great economic and demographic dynamism and with a strong unmet demand for rental housing. Neighborhoods with a high attraction of workers and students, mostly qualified, are privileged. BTR rental management must be professionalized and be in the hands of companies and not individuals. The rental of BRT is designed for the long term, for several years of contract, in order to avoid the constant rotation of the occupants.
An important feature of Build to rent is that it refers to a residential real estate development in which all units are retained by one owner or developer, and are rented out, rather than being sold to multiple owners under the traditional build-to-sell model.
The developer owns and manages the units as long-term income-generating assets, typically benefiting from economies of scale when it comes to general maintenance, repairs and other upkeep. The built-to-let units tend to be large apartment blocks and are generally owned by major equity funds.
The “landlord” is the company that owns the property. Therefore, everything is much more regulated and managed than when it is an individual who rents.
BTR is an opportunity, creating a scenario in which everyone wins: the owners due to the increase in property prices and the increase in rents and the tenants due to being new constructions, with services, green spaces, attention to maintenance and construction quality, in addition to creating a favorable environment to stay in the complex for several years. Along the same lines, renters who feel part of a community tend to stay longer. This, in turn, reduces the risk of rental gaps, which have a negative impact on net operating income. Indeed, studies show that people who know someone else in a building are 75% more likely to renew their lease.
Even though it is an incipient market, the BTR is already in Uruguay a bet in the real estate sector with excellent growth prospects, in line with the world and Latin American trend, which means that more and more people prefer to rent rather than buy. he
