In the last year and mainly caused by the pandemic, we have observed great changes in the real estate sector.
Although at a value level, a stable and positive behavior in the price of properties is estimated, what are emerging are new housing models that have as protagonist the rental as opposed to the traditional sale and purchase.
One of these models is Build to Rent, which has climbed the ladder of alternatives to meet the new housing needs that have arisen after the pandemic.
Build to rent is one of the solutions created to meet the demand of the market that cannot afford to buy homes with clearly rising interest rates or that is looking for flexible and adaptable solutions to the current moment. It is a new phenomenon that has attracted the attention of very many investors and that for the last two years (2020) has brought to the sector an investment of close to 2 billion euros.
Build to rent is based on new-build homes destined exclusively for rent and normally owned by a single owner or developer who manages everything involved in the rental of these homes.
Although Spain is still a market in which buying and selling predominates over renting (according to data from Eurostat, the European statistics office, more than 75% of the population owns homes), the new rental formulas are gaining market share.
Their prices are very competitive and as the construction and supply of these homes increases, it will push market prices down.
The tenant will have more advantages since in big cities like Madrid or Barcelona; the supply of rental housing is not enough and with the new constructions they will have much more supply and with more supply the price will be more affordable.
Another advantage of Build to rent, as is the case with Co living (a phenomenon similar to coworking but brought to housing) is the possibility of being able to enjoy common areas and complementary services such as the possibility of having spaces to work, sports areas, laundries, cleaning service and even restaurants
In this context, an important part of the population is beginning to see renting as a long-term option, since we have fewer possibilities to access home ownership because banks have offered very good financing conditions to access a mortgage, but aimed at people with sufficient financial capacity.
Changes in housing needs and demands, which often require areas for teleworking (digital nomads) or leisure with flexible rental options and according to the needs of each person, has increased interest in the creation of these new rental models.
The most relevant aspects when looking for a home nowadays are factors such as energy efficiency, teleworking areas, terraces, brightness, design and comfort elements, etc., and all these features are much more present in the supply of new construction.
This new model, Build to Rent, also presents a lower commercial risk, since investors do not feel the uncertainty of whether these homes will be sold or not. In addition, in the long term, it is normal for them to generate more profitability since they will always be on the move.
In this type of housing, the usual configuration of a property changes. We will begin to see smaller living space and larger common areas, more open areas for socializing among tenants and with more shared services.
They are homes with the greatest possible comfort and to enjoy a healthy life thanks to its functional distribution, always open to the outside and also adapted for people with reduced mobility, an ideal world (at least theoretically) and full of opportunities.
The Built to rent model has brought renting back to life and will increase real estate investment for both large and small investors, at least that is our forecast.
For this new rental mode it will be critical for the investor to buy the right property at the right price in the right location. In that sense REA INMOBILIARIA has extensive experience in locating properties in the north of Madrid, Alcobendas, La Moraleja and surrounding areas with possibilities to launch real estate projects of this type.