1. Maximise the returns on investment and land value.
Multiple dwellings with multiple incomes create much stronger cashflows.
2. Low compliance and maintenance costs.
New builds are generally compliant with the latest government housing requirements, such as the Healthy Home Standards. Also, they cost a lot less in maintenance.
3. Tax and cash flow advantage.
Even though the final tax law changes are not yet finalised, the proposed changes will likely create tremendous advantages for Build to Rent project owners. For example, the bright-line test would be 5 years instead of 10 years for new builds.
4. Optimal cash flow position and interest deductibility.
There are huge cash flow advantages as well when it comes to company tax and GST when you Build to Rent over Build to Sell. Even though, Build to Rent requires a much large capital outlay, the overall benefits are attractive as these properties have much lower maintenance costs and full tax deductibility for interest on borrowings, both of which represent huge cash flow advantages while holding these properties. So we believe developers and investors should consider it seriously as an option.