Co-living spaces have a higher revenue per unit than traditional one unit per family/tenant rentals.
As More People Opt for Short Term Lease, Co-Living Could Become a Bigger Trend
More people are on the move than ever before, making a short team lease arrangement highly desirable. Co-living spaces generally offer minimum lease terms, anywhere from one-month short term lease and up. This is driven by the fact that more people are consulting and freelancing as well as moving from job to job over their career.
Although co-living won’t replace apartment arrangements, it is a trend on the rise. According to real estate firm Cushman & Wakefield, it’s predicted that in the next few years the number of units offered by major co-living companies in the US are going to triple to about 10,000. To date, supply for co-living arrangements has not met demand. And it’s not only young professionals that are hungry for this new style of living but older generations as well who seek community and amenities at a more affordable cost than they would otherwise afford if renting or purchasing on their own.
Short Term Lease is Seen as Privilege
From consultants to digital nomads to those who want flexibility in their current jobs, having a short term lease isn’t seen as a burden but a privilege. In addition, many seniors are enjoying traveling from city to city each month, so a short term lease works more on their terms than a typical hotel or Airbnb stay. There’s no doubt, co-living is a hot trend with the legs to last for years to come.
4 Essential Factors when Investing in Co-living
Whether you’re an active investor or passive investor, your curiosity may be piqued. You’re likely wondering if there are certain factors to keep in mind to be successful in this model. I’ve outlined four essentials to know. These are as follows:
1) FF&E Replacement Reserves: Reserve enough cash flow to refurbish units and purchase furnishings to maintain the look and feel of the co-living space, as it’s this “never-been-lived-in” look a major driver for new tenants.
2) Highly Seasonal Occupancy: Winter is a slower season as many interns and new-hires are not looking for new housing. Keep the seasonality of temporary housing in mind.
3) Price-Sensitive Customers: Certainly co-living is nicer than more traditional apartment co-living counterparts (we’re looking at you, Craigslist). While co-living is a draw across ages, the typical resident is looking for a more affordable option with all the amenities. Price accordingly.
4) Gender Balancing: The last thing you want is a frat-boy atmosphere (unless that’s what you want per your mission and vision). It can be difficult to attract female tenants, perhaps because females are less eager to cohabitate with strangers. While it’s illegal for co-living companies to select tenants based on gender, incorporate activities that are balanced and not booze-oriented to keep the space from feeling like a fraternity.
ARE YOU READY FOR FINANCIAL FREEDOM?
We help you create passive income & ongoing cash flow so you can live life on your own terms.
Delphine Nguyen, Investor
Delphine Nguyen is a real estate investor and a licensed real estate broker in Illinois. She learned to be successful from a variety teachers, including her own mistakes. Real estate investing is her passion. Helping others to achieve their goals is another passion that she has. She does what she knows best, therefore, her focus is solely on multifamily and co-living investment types.
Ready to Invest
Speak with Delphine
When people ask me, “are there safety concerns with a shared room near me?”
Are you ready to take a tour of co-living buildings? Good. Imagine you live in Atlanta