Build-to-Rent

Purpose-built rental developments require funding structures that support long-term growth. Plaxo Mortgages helps investors and developers explore tailored finance solutions for build-to-rent projects.

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What You Need to Know

Build-to-Rent (BTR) projects are designed for long-term rental, rather than individual sale. Because of this, they usually require a different finance structure to standard residential lending.

Lenders may consider the project's scale, rental income potential, location, construction costs, and long-term viability. These projects may include apartment buildings, townhouse developments, or other purpose-built rental communities.

Key Finance Considerations for Build-to-Rent

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Loan Structure

BTR projects may be funded through commercial, development or investment lending, depending on the project's scale and purpose.

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Rental Income and Servicing

Lenders may assess projected rental income, rental appraisals, occupancy assumptions, and the project's long-term ability to service the debt.

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Pre-Sale Requirements

Unlike traditional build-to-sell developments, BTR projects may have less reliance on pre-sales because the properties are intended to be held for rental income. However, requirements can vary depending on the lender and the overall project structure.

Factors That Influence Approval Timelines

Application Requirements for BTR Finance

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Applicant and Developer Experience

Lenders may review the applicant's development background, the builder's track record, and the project team's ability to manage and complete the development.

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Project Information and Documentation

Applicants may need to provide key project documents, such as:
- Resource consent and building consent approvals
- Earthworks, planning, and environmental compliance information
- Detailed costings and a fixed-price building contract
- Registered valuation or project feasibility assessment
- Expected rental income and occupancy assumptions

Q: What is Build-to-Rent?

A: Build-to-Rent refers to residential properties built specifically for long-term rental, rather than individual sale. These projects are often professionally managed and may include apartments, townhouses, or larger rental communities.

Q: What types of properties are suitable for Build-to-Rent?

A: Build-to-Rent projects may include apartment buildings, townhouse developments, or other purpose-built rental communities

Q: Do BTR projects always require pre-sales?

A: Not always. Because BTR projects are designed to be held for rental income, they may not follow the same pre-sale requirements as build-to-sell developments. However, this will depend on the lender and the project structure.

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