Build-To-Rent (BTR): The Housing Trend You Should Invest In

Ashita Kesharwani

| 17-01-2024

Build-To-Rent (BTR): The Housing Trend You Should Invest In

In recent years, the Indian real estate market has witnessed a paradigm shift, mirroring global trends in response to changing demographics, evolving lifestyles, and economic dynamics. The Build-to-Rent (BTR) model, which has gained considerable traction internationally, is now making waves in India as a progressive and lucrative avenue for investors and a modern living solution for tenants.

Table of Contents

  • Understanding the Build-to-Rent Concept
  • Build-to-Rent vs. Build-to-Let
  • Driving forces that brought a massive demand to BTR – Rental Housing
  • Investing in Build-to-Rent Homes in India: A Strategic Move
  • Navigating the Build-to-Rent Landscape: How to Get Started
  • Summing It Up

Understanding the Build-to-Rent Concept

The Build-to-Rent (BTR) model is a visionary housing concept tailored to meet the diverse preferences of residents seeking a modern and hassle-free living experience. Unlike traditional rental properties, BTR homes are purposefully crafted within dedicated rental complexes, fostering predictability, maintainability, and a superior product-tenant fit.

These residences redefine the rental landscape, potentially elevating rental yields from 3% to 8%. These residences offer contemporary living, featuring amenities like gyms, rooftop gardens, and 24/7 surveillance, all managed directly by the property owner, simplifying the resident experience.

The Build-to-Rent model, centered on the needs and preferences of millennials and single-family residents, epitomizes a contemporary and appealing approach to residential living.

Build-to-Rent vs. Build-to-Let

The terms build-to-let and build-to-rent refer to a specific type of residential property development, but the purposes and target markets are different. Build-to-let refers to the more traditional form of property investment where a landlord buys a property to rent it out to tenants. Build-to-let properties can range from flats to single-family homes and can be located anywhere.

In contrast, build-to-rent emerges as a contemporary development model tailored specifically for the rental market. These developments are notably more significant, equipped with diverse amenities, and strategically situated in urban areas. Build-to-rent prioritizes renters' unique needs and preferences, striving to craft a positive and seamless living experience. This commitment is evident in features such as flexible lease terms, simplified application processes, and responsive management, reflecting a dedication to enhancing the rental experience.

Driving forces that brought a massive demand to BTR – Rental Housing

In the last two decades, the urban landscape in India has witnessed a remarkable surge in the number of tenants. Renting homes has become a mainstream choice for families and the younger demographic, including students and professionals. Beyond financial considerations, studies reveal that many individuals opt for renting by choice, prioritizing flexibility and convenience.

Surging Ahead: The Unprecedented Growth and Innovation in the BTR Sector:  Developers are on a constant quest for innovation, seamlessly blending smart technologies and sustainability features to cater to the evolving needs of tenants. The exponential growth fuels excitement for property owners and investors and positions BTR as a promising investment avenue for the future. A key driving force behind this surge is the sector's commitment to enhancing sustainability, making BTR an increasingly attractive prospect for forward-thinking investors eyeing the next frontier in real estate.

Accelerated Occupancy Rates: Build-to-rent developments boast up to 2.5 times faster occupancy rates than those constructed for sale. This accelerated pace is instrumental in swiftly meeting the growing demand for housing units tailored to local needs, providing an efficient solution to housing shortages.

Investing in Build-to-Rent Homes in India: A Strategic Move 

Benefits of Building to Rent:

Investing in BTR homes in India offers a range of advantages:

Effortless Maintenance for Long-Term Sustainability: BTR projects set themselves apart with seamless maintenance practices. Utilizing easily replaceable materials and staffed with dedicated caretakers, these properties ensure a trouble-free living experience for tenants. This commitment to streamlined maintenance fortifies the property's durability and cultivates an atmosphere of peace and convenience for residents.

Higher Rental Income: BTR properties, designed to cater to a diverse range of occupants, often command higher rental rates than traditional buildings. This translates into an enhanced Return on Investment (ROI) for investors, contributing to the overall profitability of the venture.

Catalyzing Urbanization by Attracting Diverse Communities: Embrace the transformative role of BTR homes in urbanization by attracting diverse communities. These projects, explicitly designed to cater to the needs of Urban India, feature large buildings offering numerous flats. This scalable approach is particularly beneficial for the burgeoning urban population, providing ample living spaces compared to Build-to-Sell (BTS) alternatives. Investing in BTR not only promises financial rewards but also acts as a catalyst for fostering vibrant and inclusive urban areas.

Benefits of Living in a Build-To-Rent Property: 
As a prospective tenant in a BTR property, you can enjoy:

Better Product-tenant fit: In the housing realm, the Build-to-Rent (BTR) model emerges as a beacon of tenant satisfaction, ensuring a seamless fit between the product and the renter's needs. What sets BTR apart is its commitment to providing tenants with precisely what they desire. The beauty of the BTR approach lies in its ability to deliver on the promise of a curated living experience. From the initial online impression to the physical space, tenants can expect a perfect alignment between expectations and reality. This focus on a better product-tenant fit positions the Build-to-Rent model as a contemporary and tenant-centric solution in the ever-evolving landscape of residential living.

High Standard of Living: Because Build-to-rent apartments are purpose-built for renters, they offer a range of features and amenities that traditional buy-to-let properties often lack. For instance, Kots BTR developments incorporate communal areas, rooftop gardens, and gyms, providing residents with refreshing spaces to unwind and rejuvenate.

Join a Community of Like-minded Individuals: Unlike traditional rental properties, where tenants frequently come and go without ever building connections with one another, Build to Rent developments actively foster a sense of community and belonging. Through shared amenities like communal lounges, fitness centers, rooftop gardens, and social spaces, residents find abundant opportunities to engage and form connections with their neighbors. This collaborative atmosphere is especially enticing for young professionals, students, and those new to an area seeking to forge meaningful social bonds.

Navigating the Build-to-Rent Landscape: How to Get Started 

Residential Real Estate Investment Trusts (REITs): Explore publicly traded REITs specializing in BTR properties for a diversified investment approach.

Publicly Traded Institutional Owner/Builder: Consider investing in property developers focusing on BTR projects, ensuring a more hands-on investment strategy.

Crowdfunding Platforms: Engage in crowdfunding on platforms like Crowd Street to raise capital for your BTR development, requiring a well-thought-out business plan.

Summing it up: 

Overall, there's no denying that Build To Rent developments have a variety of perks that can elevate your renting experience. Depending on your needs, location, and budget, this emerging sector is a viable option, especially for those looking for more flexibility than residential rental providers typically offer. 

The affordability of many BTRs can still be questioned, and it's worth considering some of the key benefits when considering if it's the right fit. 

Want to find out more? 

Read our article on "Why BTR is the Future of Rental Housing in India" for deeper insights. Connect with our experts today to maximize your rental yield through a Build-to-Rent project. Whether you need assistance in property letting or management, we're here to assist you succeed as a landlord. Let's discuss your goals!

Looking for apartments for rent in Whitefield or BTR residence? Explore our properties and find your ideal living space!


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