To date, the big-name property portals have enjoyed a stranglehold over leasing strategies in the private rental sector, pursuing relatively uniform approaches. This isn’t surprising. A chronic undersupply of rental housing means that these traditional agents haven’t had to be overly creative when it comes to attracting tenants to properties, with a heavy supply and demand imbalance meaning they’re almost guaranteed to generate interest from prospective renters.
By Mary-Anne Bowring, CEO, Una Living (Ringley Group)
However, with the growth of Build to Rent comes the need for a different approach to leasing strategies. It’s not surprising that this shift has yet to take place, given that most leasing teams will have learnt the ropes within the confines of buy-to-let. But as investors look to Build to Rent for its counter-cyclical, inflation-hedging qualities, leasing teams with a deep knowledge of the sector and tailored strategies will be the ones to thrive.
Most leasing strategies have yet to make clear to tenants the benefits of Build to Rent schemes that differentiate them from traditional rental properties. This includes Centring, for example – the professional management, secure tenancies and community fostered by on-site amenities, usually absent from their buy-to-let counterparts. Marketing these benefits correctly allows Build to Rent schemes to not only build waiting lists, but also to command higher rents than investors might expect – over 10% higher on some of the schemes we’ve advised on.
But what does a good leasing strategy look like? In part, it means one tailored to the kinds of tenants who will want to stay renting their property for a long period of time, achieved through sophisticated filtering methods, and harnessing the power of algorithms. It will feature a competitor watch, analysis of supply and demand, pricing seasonality, studies of the demographic tenant mix, and lock-out clauses that protect income in the hard to let winter months. Also in the toolkit will be a range of lease-up incentives to drive a strong conversion rate and well-dressed, move-in ready homes.
By reducing void periods and attracting the right tenants in the first place, long-term income streams for investors like pension funds and insurers are assured. The right tenants will actively contribute to the creation of an on-site community and a positive reputation for the scheme, attracting additional residents in a positive feedback loop.
Doing so requires a specialist team that understands the intricacies of Build to Rent, avoiding unnecessary expenditure and ensuring that tenants are well-informed of what their scheme has to offer.
Technology must also sit at the heart of any successful leasing strategy, with automation of processes related to all aspects of lease-up – from viewings, to payments, to reporting – increasing staff efficiencies while harvesting data that allows leasing teams to monitor performance and feed this back into their strategies.
On the tenant side, technologies can be used to ensure a comfortable move-in process through scheme-specific features like scripted processes, image sharing and floor plans before move-in, followed by user guides resident surveys and instant messaging with staff and other tenants, resolving issues as they arise while fostering a strong sense of community.
The best way to achieve this is through an integrated platform encompassing each stage of the lease-up process, meaning less time and money spent attempting to join up disparate data sets from a variety of off-the-shelf solutions. But given that the human face is a huge part of the appeal of Build to Rent for potential tenants, leasing strategies must find the right balance between integrating technologies where appropriate while maintaining a front-of-house team.
Leasing-up assets at pace is needed to ensure that mobilisation takes place as quickly as possible to start generating income. As Build to Rent investors look for teams that offer the full asset management piece, leasing strategies must form part of that offer. Asset management partners who can advise on schemes from design all the way to stabilisation is the best option in this environment, creating efficiencies that reduce leakage and improve gross-to-net.