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.

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.