For new investors in the market, Build To Rent (BTR) may be an unfamiliar term, but build to rent is currently a thriving sector in the Irish property market. It has become a viable, stable and attractive investment for Irish investors and developers. Approximately €898m was spent on BTR investments in the first half of 2019 accounting for almost 43% of the €2.1bn of investment deals in the period.
Essentially, they are purpose built residential apartment block developments with built in amenities for long term rentals. Such amenities include; laundry collection/delivery service, gymnasium or playground areas for children, lounge area and break-out areas to include remote working, meeting or homework pods, aiming to provide affordability to independently rented accommodation.
BTR properties are usually owned and managed by institutional landlords or investors with some of the main services being outsourced to letting agents or property management companies. While BTR, is typically a long-term rental strategy by one single entity there is the possibility that a social housing entity may purchase a proportion of the units.
BTR schemes are becoming more attractive to investors and landlords year on year due to their stability as people value convenience, community and flexibility. The Minister for Housing has encouraged the planning of these developments, in particular for the regeneration of older buildings in city centre locations.
These schemes aren’t only focused on the capital but also branching out to other cities and towns across the country. For investors, the funding model for these projects is similar to that of purpose-built medium and large-scale accommodation projects. These developments offer investors risk-adjusted returns with relatively low volatility and attractiveness.
BTR can be a tricky endeavor for novice investors as there is a steep learning curve involved in getting familiar with this new asset class. Should you need any assistance, please don’t hesitate to contact us here at KPM Group. We would be happy to help in any way we can.