When estate agents are looking for every possible source on income, one of the most frustrating areas to get into is new build and Build To Rent (BTR).
We’re constantly hearing about how more housing is needed, but unless you have a land buying side to your business the received wisdom is you’re unlikely to get into development unless. Sure, some good local agents might get a joint instruction if the bigger agent isn’t locally represented, or on the rump left when the juggernaut has moved on, but it’s sometimes galling to see most sales going to the big nationals.
For forward thinking agents keen to expand fee possibilities, surely the new push into Single Family Housing (SFH) in the (BTR) space must offer fertile ground.
BTR conjures up visions of huge blocks of flats, but there are a limited number of such developments coming up and most of us live in houses anyway, not flats. So, the hunger operators and investors have for more housing to rent out needs to be seen as a major opportunity.
The sector is tiny, well under 200k units nationally, but the exciting thing is that operators have woken up to the fact there aren’t enough developments around and are looking for much smaller groups – known as Single Family Housing units. The sector is nascent, but has advantages for operators, even if pepper potted about. Bigger operators are increasingly putting their management experience to good use in looking after such properties and of course they can be easier to look after with much longer-term tenancies and less ‘dead’ cost – i.e. no gyms, caretakers and huge amenity cost associated with running a big building/development. They therefore tend to produce higher net yields too.
The reason I’m excited about this burgeoning sector is that good local agents CAN get involved without having to employ land agents, deal with bigger developers and new homes or be instructed to sell any potentially interesting properties. The best thing local agents have is knowledge – they’ll know where a rump end of a local development is sitting, or a small new development is about to be released. They’ll know, even from other agents’ instructions, where landlords who may have a small portfolio are getting out of the market and want to sell – they’ll also know rental values and can probably help rent properties out down the line. They have an opportunity to package up local parcels of property, without being instructed, using their local knowledge, and offer these to investors and operators – who’ll happily pay a finder’s fee.
There are plenty of consultants and burgeoning trade associations in the sector who’ll point you in the right direction. I know, I interviewed one of them in a recent EdTalks episode. So, what are you waiting for?
