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Build-to-rent a developing story

As more people struggle to secure affordable housing, build-to-rent projects promise much, but a careful eye on construction methods is needed, writes Anthony Corin.

By: Anthony Corin

28 June 2023

Due to the nation’s housing shortage, build-to-rent developments are growing in popularity across New Zealand.

Build-to-rent includes multiple residential units, where the whole development is owned by the investor rather than just one unit. And build-to-rent possibilities are offering a housing solution that will benefit tenants and property investors as more people struggle to secure affordable housing.

Durable construction

When beginning a build-to-rent project, investors have a variety of construction systems to take into account. The investor would aim to meet the needs of their renters, while also looking for a good return. Insulated concrete formwork (ICF) construction is a choice that is advantageous to the investor and the tenant.

ICF is a method of construction where poured in place, steel reinforced, waterproof concrete fills the space between high density, polystyrene forms left in place. As a result, this creates a resilient and durable structure that withstands damage from tenants as well as natural disasters.

In timber houses, there are spaces between the studs which means plasterboard can be damaged by tenants. In an ICF building, the plasterboard is supported by concrete and EPS, making it very strong and resistant to damage.

ICF properties are an attractive option for investors as they are very easy to maintain. And because ICF construction is so durable, property owners will be spending less money on upkeep and repairs.

Satisfying the tenant

Satisfying tenants is crucial when it comes to build-to-rent properties. A tenant who is happy with the quality of the home and the costs is more likely to stay longer.

ICF construction can help create a healthy and comfortable living environment, ideal for tenants. The insulation properties of ICF and its thermal mass performance mean that homes built with this system are warm in winter and cool in summer, making them comfortable to live in all year round.

Additionally, the airtight nature of ICF construction eliminates home dampness and mould growth, creating a healthier home for tenants.

A healthy home like this results in less energy use throughout the year, and with an ICF build you would be looking at up to 80 per cent in energy bill savings.

The longevity of tenants is another crucial factor to consider when investing in build-to-rent developments. Since landlords must pay for advertising, cleaning and maintenance in between tenancies, tenant turnover can get costly. However, by creating a high quality build and healthy living environment, landlords are able to encourage tenants to stay for longer. ICF can create an environment that is desirable for tenants to stay long term, reducing costs for the property investor around tenant turnover.

Above code

Property investors would be wise to build above code now before laws eventually update and change to reflect the evolution of construction technology and best build practices.

Building above code future-proofs the property, ensuring they will satisfy current conditions as well as meet any new building standards introduced in the future.

ICF is a construction system that performs above the current NZ building code.

The best return on investment for those wishing to build rental developments will come from carefully considering their build options and choosing higher quality building materials.

For a variety of reasons, including durability, ease of maintenance, energy savings, tenant happiness, long-term tenant retention, and producing a healthy house that is above code, ICF construction is a compelling choice. These homes will be sought-after by tenants and offer a consistent return on investment over time.

Anthony Corin and his team specialise in property development and construction using ICFs and operating through a relational contract, open-book system. Shorcom Ltd, 0800 SHORCOM, www.shorcom.co.nz

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