Build-to-Rent Business Model

[Alberto M.]

We have been looking into entering the build to rent business model. However, it has been hard for us to identify a good investment.

In a general understanding of construction you look at you cost of land, soft and hard costs, estimate the time, project a selling price based on comparisons and market research and figure out your IRR and/or ROI. However, when dealing with construction and rental income, the initial cost tends to be too high that the returns don't look that attractive.

Does someone know a standard, let’s call it, Rule of Thumb return to look for when developing a build-to-rent project? What are the metrics important to follow and lastly does someone have a proforma or financial model I could look at to have a better idea?

Anything will help! Thank you in advance.