The National Apartment Association, the organisation that represents the Build To Rent sector in the US, has just hosted a UK conference - thought to be the first looking at this sector which is now rapidly expanding in this country.
Some 25m homes in the US are in this sector with the conference hearing that brand and customer service were two of the most defining aspects of its success.
As in the UK, the US rental market is flourishing because home ownership is decreasing slightly - it’s now around 64 per cent of households.
Notes from the conference, supplied to Letting Agent Today by the NAA, make for interesting reading:
- What really stood out to the British audience was the sheer range and variety of resident facilities available in US schemes. Fitness rooms and pools are a given, but rental developments in the US have all sorts of extra amenities from wine rooms and bike workshops, to pet spas and even dog daycare. Central club areas offer sociable communal spaces and a wide range of resident events are on offer from wine and cheese evenings to ‘yappy hours’ for pets and owners.
- All of these amenities and services essentially come down to convenience for the resident. In the US, where people usually have to get in the car even to go to the nearest shop, there is a strong emphasis on offering amenities on the doorstep and creating a warm community where residents feel at home and want to spend their leisure time.
- Many developments have a tech café with 24-hour access for residents offering higher speed wifi, printing facilities and refreshments. These have become more popular with the increase in numbers of people working from home, offering them a change of scene from working inside their apartment.
- The on site concierge is usually available during business hours and a range of additional services are typically available including dry cleaning, valet car parking and ‘room service’ food, provided by an on-site restaurant. High levels of customer service guarantee that issues such as maintenance and repairs will be dealt within in a certain timeframe.
- Apartments are usually let unfurnished in the US but operators often offer a furniture rental service. This is supplied a third party furniture rental company, but offered as an extension of the property management company, giving tenants the option of renting furniture without the landlord having to invest in buying it. In the US, CORT is the market leader and here in the UK its subsidiary Roomservice by CORT is already working with many of the PRS operators.
- Due to the need for transparency in the North American Market, a common enhancement adopted by most professional property managers and owners is a revenue management system. These systems are designed to maximise revenue by updating rents on a daily basis using the balance between the real-time inventory, traffic and market conditions.
- Although the UK market currently does not offer this clarity with rates usually set by lettings agents, the continued growth in the UK PRS market is likely to will this as a standardisation in the near future.
- Whereas in the UK properties are valued when empty, in the US the rental value of the property is set based on market demand and income achieved. The average lease is set for 12 months, as the property management company wants a break in the agreement so that they have an opportunity to review rents for potential increase at the end of each lease.
- The model widely being rolled out in the UK rental market is for all costs to be included in one monthly bill, where as the US model is to charge for everything, providing itemised billing for ancillary items such as pet rent, utilities and parking. In addition to potential additional income, this method can have benefits including a positive environmental impact as when people pay for their own utilities, consumption goes down by 25 per cent.