Rent For Life

A revolutionary approach to affordable housing is poised to reshape the residential investment market

- Mark Story

While building apartments with the express purpose of renting them out as a long-term asset is the largest property sector for investment overall in the US, most Australians have never heard of it. However, with affordability issues eroding Australia’s passion for home ownership, there are signs that the build-to-rent model (aka multi-family asset class) is about to take off.

Unlike Australia’s traditional build-to-sell strategy where there are multiple owners in an apartment block, in the build-to-rent (BTR) model the whole project is bought by one owner and leased out. With 2016 census data revealing that 30.9% of the population now rent, and Choice data indicating that 40%-plus have been in the rental market for over a decade, build-to-rent opportunities are clearly worth exploring.

From cradle to grave

The BTR model is simply a larger and more professionally managed version of property investors buying a single dwelling and renting it out. Assuming the US-based BTR model takes off locally, the renter experience – which as competition grows may include bolt-on goodies – promises to be a lot better than renting off mum-and-dad investors.

Admittedly, BTR is not exclusively a millennial story. However, research by loan comparison site Lendi, which reveals that 56% of Australians aged between 18 and 34 don’t believe they’ll ever own a property outright, suggests Australia is ripe to create communities of cradle-to-grave renters.