Build to Rent & Property Management
Property Management and Build to Rent are having to cost cut to maintain, or increase, yields. Proven Tech is giving operators the chance to operate a menu driven approach to service delivery helping drive costs down and yields up. Platforms like Viewber and OpenRent are at the forefront!
One is a nascent area and the other as old as the hills – but both have a similar issue. Managing tenants, contractors and staff is time consuming and expensive and fees aren’t going up. Indeed, with fees on the way down the only way to improve profit margins is to cut costs. Many of the best developers are talking to those building long term rental developments. Having heard Michela Hancock of Greystar talk at the RICS Resi Conference it’s obvious that many of those, Like Greystar, looking for land to supply long-term rental solutions often come second to build to sell developers who have a different timescale for returns and can usually pay more. These suppliers are looking to team up with build to sell developers who are now keen to be seen to diversify - many developers are also now looking to apportion some, or part, of their sites to build to rent.
Build to rent will be a Godsend to the annuity market. In Germany the bulk of such developments are owned by pension funds looking for a long - term sustainable yield. The often more bullish capital appreciation element doesn’t operate there, and many informed commentators do not see it being a factor in the UK in the medium term. So perhaps tenure and returns are more likely to ape what’s happening there.
In the search for yield, cutting costs is key. Because managing property is time consuming and expensive, managing portfolios in house is now commonplace, the goal is to do it ever more efficiently.
Servicing private landlords and investors, without the use of agents, is now big business with over half the sector managing, and finding tenants, themselves. Platforms like Openrent and Viewber are revolutionising this sector. Legally compliant templates and documents, allied to the ability to fit modern keysafes, take photos and arrange open houses, visits or arranging contractor access anywhere in the UK any time – all bookable online – means it’s never been easier. Landlords and investors can choose from a menu of required services rather than pay a headline fee.
For many the agent is still a vital and integral part of the process, for others, and I see the build to rent arena as a big part of this, the ability to use proven tech to up their margins is helping them create viable yields.
- Ed Mead