Build-to-Rent is booming. It’s set to make up a third of the private rental sector as an increasing number of renters look for homes designed specifically for their lifestyles. You could say that it’s good times all round, for renters and Build-to-Rent operators.
But you don’t want to count your chickens before they hatch. People have even more choice with the increasing number of renter-specific properties springing up around the country. As a Build-to-Rent operator, you want to make sure that you speed up leasing while also setting the right rental price to stay competitive.
Deciding on a price point for your homes can be tricky: charge too much, and renters will choose one of the other options available. Finding the right balance requires an understanding of many components, which is why we’ve put this guide together to give you a clearer picture of how to price your Build-to-Rent apartments.
The location of your Build-to-Rent home plays a significant role in the amount of rent you charge. The majority of Build-to-Rent apartments are new, so there’s always a slight premium when compared to other properties in the area.
Even with a small premium, you don’t want to price your units at a much higher rate than the local competition. Look at the types of properties in the area: is there an influx of new builds, are there other Build-to-Rent operators or are most homes period properties? Measure the rents in the area too, and make a decision based on the average.
We know that you want to provide renters with awesome homes that boosts their living experience. But we also know the only way to do that is through sustainability. That’s why your operating costs play an important role in deciding the rental price.
With rental contracts let on ASTs, the majority of outgoings will fall on the landlord rather than the renter. And you’ll need to factor in possible monthly outgoings to reach a rental price point that is competitive but also makes sure that the property is profitable.
On-site amenities are a key component to any Build-to-Rent home, with many renters marking things like gyms, lounges and terrace areas as “must-haves”. Properties with desirable on-site amenities can command higher rental figures than ones without.
It’s not just about having access to relaxing surroundings and a place to work out, though. Extras in the form of concierges, mail collection and laundry services all play a part in pricing your Build-to-Rent properties. Having secure parking spaces doesn’t hurt, either.
Sometimes it’s all about the location within a location. Where does your Build-to-Rent property sit in the neighbourhood? Is it located near transport hubs, and does it offer easy access to local shops, restaurants and landmarks?
Renters in big cities require convenient transport options so that it’s easy to get around. Even in the wake of Covid-19, they will still look for convenience. Renters are more likely to pay more for the ease of getting around if your building is near transport links and local amenities.
It's all in the square foot
Property size always plays a significant role in the price of a home, and it’s no different with Build-to-Rent apartments. Square footage is valuable, especially when a higher number of people are working from home.
It’s hard to convince people to pay premium prices if they feel like their living space is limited. And renters will definitely be happier paying higher prices if their quarters are reminiscent of a castle — or, you know, bigger than a shoebox.
Look at the competition
When in doubt, look at what your local competitors. There’s no point setting your prices considerably higher if there are similar offerings in the area. Renters will be able to get the same experience around the corner for less.
With more than 10k Build-to-Rent homes completed, a further 9k under construction and 27k with planning permission, the number of renter-friendly homes is set to increase exponentially. Keeping prices competitive is essential.
Hitting the sweet spot
Getting the right rental price is vital for avoiding void periods and making sure that your building is full to capacity. To do that, you need to understand your local market and its rental ecosystem. It’s at that point when you’ll find the sweet spot for your Build-to-Rent apartments.