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26 Nov 2020, by Amy Sarcevic
With its attractive risk profile, quick, large and steady returns, build-to-rent is fast gaining popularity in the investment and residential development communities.
Unlike other types of income generating properties, such as commercial office investments, build-to-rent has a relatively low tenant risk, with a greater mix and spread of customers. This makes the asset class appealing to long term, play-it-safe investors.
However to really pay off, tenant turnover and weighted average lease expiry (WALE) must be minimised and the model positioned as an attractive alternative to home buying.
With Australia’s traditionally high rates of home-ownership – hovering around the 70 percent mark for the last five years – creating this cultural shift is no easy feat. However, with the world of work and finance changing – and an estimated 7 million Australians looking to move after the pandemic – now is the right time to elevate the profile of the build-to-rent model.
To this end, there has been much focus on creating safe, well and connected build-to-rent communities – benefits which StarRez CEO, Travis Knipe, believes technology can enhance.
Adopting the next wave of innovation
“Technologies can really lift the build-to-rent model, capitalising on its existing features and creating brand new ones,” said Knipe ahead of the Build-to-Rent Conference.
“An existing key selling point of build-to-rent is its convenient lifestyle offering, with onsite amenities including maintenance, gardening, and cleaning. Technologies can take that up a notch, improving the on-boarding experience, fostering health and safety, and enhancing the lives of residential communities.
“Ultimately this means happier residents, which translates to longer stays and higher revenues,” he added.
In the UK, where the build-to-rent market is more mature, property technologies are being used to automate building processes and administration. Closer to home, StarRez’s own software offers features like contactless move-in and other automated housing management solutions.
Meanwhile, AI is simplifying interactions to create connected neighbourhoods; and IoT sensors are being used to detect activity levels in bathrooms, along with cleaning frequencies.
“Technologies can really give build-to-rent a competitive advantage over other housing options,” Knipe said.
Digital sweet spot
However, with so much emerging tech on offer, it isn’t always clear how digital transformations within build-to-rent assets should take shape.
Large scale overhauls can be costly, whilst lower key transformations may not be competitive.
While Gartner’s advice is to find your “techquilibrium” – the sweet spot between too much and not enough technology – it isn’t always clear how to strike that balance point. To this end, Knipe says ensuring technologies reflect key trends is a good way to start.
One emerging trend is the synergy of build-to-rent with purpose built student accommodation (PBSA).
“Build to rent offers comparable living experience to PBSA and I expect that graduates will form a major part of the build-to-rent client base in the future. With this in mind, it is worth thinking about how technology could cater to this demographic,” said Knipe.
“Technology should always be looked at as a means of enhancing the living experience of tenants. The question therefore becomes, what sort of living experiences is this target demographic looking for? Perhaps it’s a digital marketing program with upcoming social events or technologies which track resident engagement and activities. Used wisely, technology is an enabler for delivering great experiences for a residential community.”
Another key trend is the effect of COVID-19 on health and safety consciousness among the general population.
“It’s more important than ever before to maintain the wellbeing of residents and technologies can play a major part in this,” said Knipe.
“As one key example, gesture technologies – where people can activate bathroom taps or lift controls by swiping their hand – are becoming increasingly popular. So too are contactless move-in solutions, which offer a seamless onboarding experience, but without the need for human contact.”
“Identifying society’s biggest pain points is always a smart place to start when it comes to procuring technology.”
Travis Knipe will talk more about how technology is working to enhance the build-to-rent model at the upcoming Build-to-Rent Conference, held as a virtual event on December 7, 2020.
StarRez software empowers residential staff to deliver exceptional residential services and experiences. With a comprehensive suite of solutions available and more than 800 customers, StarRez is used to efficiently and successfully manage thriving residential communities across the globe.
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