PRSim are pleased to have contributed to LOFT’s 3rd annual PRS magazine, ‘A BTR Tomorrow’ which launched at MIPIM 2018 in Cannes last week.
Read our full article below, or to download the magazine CLICK HERE.
PRSim, part of the LSL Property Services Group, is a consultancy and operational management business. We are dedicated to providing Private Rented Sector (PRS) and Build-to-Rent (BTR) developers and investors with a complete fully integrated service – from the initial process of identifying site and development opportunities through to day-to-day operational management.
We’ve learned a lot about the sector through our experiences. Here, we share PRSim’s five pillars of BTR success:
Know your marketplace
In the pivotal early phases of a PRS or BTR project, it’s vital that key stakeholders have all the facts to make informed decisions. Although there is a wealth of data available from the US multi-family residential sector, there is still a lack of UK-specific data.
PRSim assists its clients by leveraging LSL’s extensive national and regional data, and rental market indices, to provide “big picture data”. This includes a full analysis of market trends and the socio-economic landscape to help clients better understand the opportunities and risks in the current housing market.
Know your location
Finding the right site for development in the optimum location is essential. Start by undertaking an in-depth viability analysis of your chosen location – from expected supply and demand to competitor activity and local infrastructure.
With BTR schemes often years in the pipeline, make sure to not only consider the here and now, but also the future of the area. What will drive growth, who are the leading employers and how will the area evolve over the next 10 to 20 years?
It’s also important to monitor your local competition; an influx of housing to the area may affect your mobilisation strategy, expected lease-up period and knock-on marketing spend.
Insights into local demographics will assist you in pinpointing your potential customer base, so you can tailor your building and service offering accordingly. As part of the wider LSL Group, PRSim has access to one of the largest estate agency networks in the UK, making us experts in identifying suitable off-market land and site opportunities, and assessing their viability for development.
Know your resident
In the world of BTR, the resident is king. Happy customers equal longer tenancies and increased stability, which is key to maximising yield and capital values.
Early analysis can help to define your potential customer base, helping inform decisions around unit mix, specification and communal facilities. Consult industry reports such as the LSL Tenant Survey, the largest PRS survey of its kind in the UK, to gain a better insight into the voice of your target customer.
It’s important to regularly review the needs and wants of your residents to continuously improve and evolve the service offering. Seek feedback often and instigate a formal customer satisfaction review process to monitor areas of success or improvement. You should also consider incentivising your onsite team based on these results.
Know your building
PRSim works with leading developers and architects to advise on all aspects of a project’s design evolution, from optimum configuration, facilities and amenities, to comprehensive financial modelling and life-cycle costing.
Seemingly trivial decisions, such as the placement of bin stores or post boxes, can dramatically affect the building’s operational management causing unnecessary problems and cost further down the line.
A sharp eye for detail is needed to strike a fine balance between modern design (now synonymous with BTR) and asset performance. A full life-cycle costing analysis will help you understand the current & projected cost of your development over a ten-year period, allowing you to identify the most cost-effective options for operation, maintenance and replacement strategies. This will mean that you can better comprehend the financial implications of every design and build feature or decision made.
The ultimate goal is to deliver a cost-efficient building, one that supports effective operational management and enhances the overall resident experience.
Know your value
Value here doesn’t simply refer to the financials. Of course, it’s essential that the scheme works from the bottom-line up and that your operator’s objectives align with the investment objectives of maximising your net operating income. However, this point also refers to what makes your scheme, brand or service offering unique – what value does your scheme provide to residents that is over and above that of your competitors’?
This is one of the main differentiating factors which separates BTR from private landlord renting. A brand is far more than a flashy logo; as a minimum it should encompass your core values, organisational culture and unique service proposition. This should permeate the building and its design, staff and residents – underpinning the customer journey and every resident interaction.
Brand loyalty will only be driven by exceptional customer service.
Every scheme should aspire to create a sense of community and a place people can call home. Research shows that when a scheme’s residents are able to engage with one another it has a significant impact in the number of renewals – as few as two to three engagements can factor a sizeable uplift.
Engagement can range from hosting resident events and providing flexible spaces to enjoy as a community, through to opinion surveys and the use of resident portals or apps for improved communication. Even reporting maintenance issues can be turned into a positive experience if dealt with efficiently.
The inclusion of technology to promote convenience and efficiency is an essential ingredient for a successful PRS or BTR scheme. In today’s tech-savvy world, expectations of renting and (specifically) amenities are evolving. It is worth considering the latest smart home technologies, door access controls, delivery drop boxes and security, and what value your residents would derive from these versus the expense.
Listening to and communicating with residents is integral to the success of any scheme – make sure to facilitate engagement and create positive experiences with the use of cutting-edge resident portals and mobile apps.