Tips for managing build-to-rent communities
Build-to-rent communities have different challenges from apartment communities. Improve operations and renter satisfaction with these tips.
Build-to-rent (BTR), or build-for-rent, communities are popping up all over the country thanks to a strong demand from renters. In fact, there was a 106% increase in build-to-rent homes under construction in 2022 compared with 2021. That’s because recent market dynamics have made these homes an ideal option for many renters. And since build-to-rent communities are forecast to be a favorable long-term investment, investors are eager to add these communities to their portfolios.
How do build-to-rent communities differ from apartment communities?
Build-to-rent communities are a hybrid between single family homes and multifamily communities. They are professionally managed communities where renters enjoy the space and privacy of a single family home along with the amenities and perks of multifamily living.
More indoor and outdoor space
Traditional single family rentals are typically located in an area full of homeowners. Build-to-rent homes are communities that are only for renters. Sometimes referred to as “horizontal apartments,” build-to-rent homes give renters more space from neighboring units.
On average, build-to-rent communities offer about 200 more square feet than in an apartment, and in some cases as much as 600 square feet. Plus, it’s common for renters to get perks they wouldn’t normally have in an apartment. For example, many provide attached garages and yards that are regularly landscaped and/or fenced.
That added space commands higher rents than a standard apartment unit. But extra space isn’t the only thing driving higher prices. Renters are also willing to spend a little more thanks to the amenities in these horizontal multifamily communities. Things like pools, dog parks, gyms, and clubhouses are value adds that they wouldn’t have by renting a typical single family home.
There’s less turnover in build-to-rent communities
BTR homes see their renters stay longer than apartment dwellers. Speaking to The National Apartment Association, one company reports that their annual turnover rate for build-to-rent communities hover around 40%. That means that one of the perks of managing a BTR community is that there’s less effort needed to fill vacancies.
Why are renters choosing build-to-rent communities over apartments or single family homes?
Renters are leasing BTR homes more than ever. So why is there such a demand for these properties? One reason is the lifestyle it affords certain demographics of renters:
- Work-from-home professionals
- Pet owners
- Would-be homebuyers
Better fit for families, WFH professionals, and pet owners
Since build-for-rent communities offer more space, it’s attractive to certain lifestyles. Forty-four percent of the BTR market is occupied by couples with young children. That makes it the most popular segment of renters in these communities.
Having added space is also attractive to people spending a lot of time at home – like remote workers. During the COVID pandemic, interest in build-to-rent communities began to rise. And now, remote or hybrid work is still popular. So many renters are seeking homes that offer more space so they can set up home offices.
Build-to-rent homes are also a good fit for pet owners. And many of these BTR communities allow renters to have pets. In fact, it’s estimated that at least 70% of their build-to-renters have pets! The convenience of having private outdoor space certainly makes life with a dog much easier.
Buying a home is too expensive for many
More people are choosing to rent rather than buy a home. With a shortage of affordable homes and high interest rates, buying a house is not as easy as it once was. This is making “would-be” buyers stay in the rental market longer than they once would have. Forty-four percent of millennial renters say that high housing prices are the reason they keep renting.
Build-to-rent communities can give these renters the feeling of having their own home without the sizable down payment that goes along with it.
Don’t want the commitment of being a homeowner
Some renters desire everything about single-family living, except one thing: the commitment. They don’t want to be tethered to the same town, the same house, or a 30-year mortgage.
Build-to-rent single family homes are a perfect fit for the commitment phobe. They are also a great place for someone who’s just relocated. Living in a house without a commitment lets them explore the area and find the neighborhood they want to buy in.
How to improve operations at build-to-rent communities
Build-to-rent communities and the residents who live there are a unique segment of the rental market. So managing these communities needs to work a little differently than in traditional apartment buildings.
Here are some ways you can simplify operations while catering to the aspects that make BTR communities so desirable.
All-in-one community apps take the burden off of staff
One of the most effective tools for managing a BTR community is with a community app. Community apps are handy for BTR neighborhoods because they let renters manage the day-to-day logistics of living in a rental community.
This is helpful because some build-to-rent communities don’t have property management staff working on-site. Or, they are sometimes understaffed. If you don’t have a community office or a full staff, renters might not know where to turn for assistance. An app is an all-in-one resource for when they need help.
No matter if you have on-site teams or not, mobile apps are especially helpful to improve operations and efficiency. The best apps will integrate with your property management software and let you manage everything all in one place. Here are some of the common features of community apps that help improve operations:
- Paying rent
- Maintenance requests
- Messaging between renters and staff
- Move-in/out checklists
- Authorizing guests
- Amenity reservations
- Pet and vehicle registrations
- Package management
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Automate maintenance requests
A maintenance-free home is one of the main perks of build-to-rent communities. And renters in BTR communities have high standards about the upkeep of their home. They want maintenance issues to be resolved swiftly, and with as little burden on them as possible. Without a proper system to take on maintenance requests, you won’t be able to live up to these expectations.
This is why a robust work order management system is essential for build-to-rent communities. It simplifies the entire process for the renter that needs something fixed. And all the while it gives your team members the information they need to complete each ticket.
Your work order management system should function within your community app. That way renters simply use their phone to send a request. And, they can use their phone’s camera to submit pictures of what’s broken. This is especially helpful for your maintenance teams. It gives them better visibility into the problem so they can arrive prepared.
It’s not enough to say their request has been received. Renters want to be in the loop of what’s happening in their home. Your work order system should let your teams post updates that automatically get routed to your renters.
Real-time updates are also a relief for on-site employees. It means they aren’t getting bombarded with a slew of emails or calls requesting a status update.
Collect details on your furry residents
Pet owners are one of the main demographics of build-to-rent homes. So that means you’ll need some processes in place that not only protect your business, but truly welcome those furry renters.
One of the first things new renters need to do at move-in is register their pets. Renters can easily do this within your community app. This gives you digital documentation of how many pets are in the household, along with the age, sex, and breed of each animal. You can also require them to review your pet policies and acknowledge they understand the rules.
Having details on every pet not only lets you apply the correct pet rent rate. It also lets you understand the makeup of pets in your community. You can use this data to help you lease to new renters. It also helps make decisions about what pet-friendly offerings you could include.
Happy birthday, Fido!
Want to really wow your pet-owner renters? When renters register pets, make sure you add a field for the pet’s birthday. You can set up automated messages through your app that will trigger a happy birthday message to the renter.
If you want to go the extra mile, you can also include a birthday discount to a local pet store. This can be done in the marketplace feature of a community app. Your renters will definitely take notice of the extra steps you are taking to welcome their pets.
Increase revenue with pet services
Communities who go beyond allowing pets often see higher retention rates. So don’t stop at allowing pets to live in your community. Offer perks that truly emphasize pet friendliness. Some of these can be community amenities that help attract renters. For instance, dog parks, pet grooming stations, or dog waste disposal stations.
There are ways to show your pet friendliness and also increase revenue. You can offer to install a dog door at an added fee. Or you can offer third-party dog walking or pet sitting services. Pet owners are always looking for ways to help take care of their furry friends. And they would likely utilize services within their own community.
Automate renters insurance offerings
Protecting your investments is a must. This is especially important for larger investments like build-to-rent communities. With larger homes and residents who probably have more belongings than the average apartment renter, there’s more at risk should a disaster occur.
You may be tempted to let renters insurance slide because it’s time consuming to manage. It can be a struggle to confirm that your residents have adequate renters insurance, track their ongoing coverage, and manage risk.
Or if you do mandate insurance, sometimes team members don’t follow up to see if residents actually set it up. Without help managing these audits, it’s hard to be successful.
Luckily, there are now solutions to automate this process for build-to-rent communities. Working with a provider like Insurance by PayLease is a transfer of risk and responsibility. You can simplify operations with automated coverage across your community. Some build-to-renters may already have their own policy. So you can give residents the flexibility to choose their own provider while ensuring automatic coverage if a resident cancels or ends their policy before their lease is up.
Additional coverage for pet damage
You already know that there are a lot of pets living in build-to-rent communities. So if you are automating renters insurance, be sure to confirm that policies will include pet damage to a property. Your provider may offer this coverage at an additional charge, but it’s well worth it.
Offer flexible rent payments
Build-to-rent homes are typically more expensive than apartments. And this may scare some renters. The home might best suit their lifestyle, but having the right cash flow to pay it all on the first of the month isn’t always feasible.
Offering flexible rent payments gives renters more confidence about renting in your community. They’ll have flexibility to pay rent in installments that work best with their budgets and cash flow.
But most importantly, flexible rent payments protect your revenue. When renters set up a schedule that works best for their finances, you end up with fewer late or incomplete payments. This ultimately leads to better NOI and fewer instances of collections.
Technology for build-to-rent communities
There’s no doubt that build-to-rent communities are a hot commodity. And if you’re new to this segment, or need better automation tools to help you run these assets, Zego will help. Simply schedule some time to ask questions and hear pro tips for optimizing build-to-rent management.
Automate your build-for-rent communities
Zego™ is a mobile-centric resident experience management platform and our technology removes the friction from the most critical resident touchpoints and automates the dreaded tasks. From payments to maintenance requests, Zego™ delivers portfolio-wide efficiency, higher NOI, and more engaged residents.