Build to Rent Australia: How Developing Townhouses Builds Wealth

https://www.youtube.com/watch?v=6odJ5DE9YIY

Are you considering undertaking a residential development project where you are considering the build-to-rent strategy that you hold instead of selling straight away?

Well, stick around because, in this video, I will share everything you need to know to ensure you find the right site to maximise your yield and minimise your cost. Let’s get into it.

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Build to Rent Developers

The build-to-rent or develop-and-hold strategy is a process that many of our clients undertake.

And it’s proven to be a great way to build wealth and mitigate risk in the developing game.

For developers, learning how to build a house in Australia properly becomes even more important when you’re holding the asset long term, because build quality, durability, and operating costs directly impact cash flow and portfolio performance.

We still look to identify development sites where we can create excellent capital growth.

In the short term, the added benefit is that you don’t have to incur costs like marketing or agent’s commission to sell them. Even GST can be mitigated using this method.

It is also a great way to build your property portfolio. Long-term trends suggest property goes up over time; that’s a fact. 

Employing a build-to-rent strategy in Australia means trying to time the market cycles is less critical. It is more about buying quality development sites than planning and developing them correctly.

Then, repeat the process again and again.

There are also some great opportunities to claim depreciation on these new properties. Which you’ll need to talk to your accountant about.

If done correctly, it is also an excellent opportunity to generate cash flow that you can leverage into more developments to continue building your property portfolio and securing your future.

Build to Rent Melbourne

By leveraging a build-to-rent strategy in Melbourne. It will mean that you can consider areas that are a little more affordable but might still have great rental returns. 

And because you are building to rent, you can reduce construction costs through intelligent choices and decision-making. 

Spending money on shiny items just isn’t justified. So, looking at hardwearing materials that offer minimal maintenance and upkeep inside and outside the townhouses is the mindset you need to work with.

Understanding what constitutes a townhouse is also important when planning your project, as design choices can impact townhouse construction cost, rental appeal, and long-term maintenance requirements.

It’s referred to as value managing your project. 

Not only will this save money but also headaches for a landlord.

When identifying a development site to employ this build-to-rent strategy in Australia. Rental yield becomes even more critical – it’s something we consider when developing to flip. 

Obviously, it holds significantly more weight when developing to hold and rent. 

If the plan is to hold for a meaningful amount of time. If the rental yield makes sense, you might be happy with slower capital growth. 

This can often be the case in the more affordable outer suburbs. You ultimately need to figure out the balance that makes sense for you. 

And as I always say here on the channel, you want to get on the developing merry-go-round anywhere you can.

These outer suburb dual occupancy areas with tasty rental yields but slower capital growth expectations could be the perfect fit for you.

So, when identifying a successful development site, keeping this strategy in mind and appreciating the rental yield in the area you’re developing becomes even more critical. 

Wrapping Up

Ultimately, if you’re creating a positive cash flow investment for yourself. It allows you to hold it long-term, allowing the capital growth to do its thing.

Over our journey, we’ve seen many clients repeatedly employ this build-to-rent strategy in Melbourne. 

We’ve got many that have built fantastic property portfolios on the back of it, hence the motivation to get this video out to you guys.

As a boutique property developer, you don’t always have to develop at the higher end of the market to achieve success.

This build-to-rent strategy is a great option that has seen incredible results for many years. 

If you want to learn more about making money with property development, why not reach out to our development team, our property development consulting services include development site acquisition and development project management.

And we would love to help if there was an opportunity too.

Filled under: All Building Developer Insights