Yet, co-living arrangements offer opportunities and challenges for rental property owners and managers. We will examine the arrival of co-living spaces, identify important factors for rental property owners and managers, and outline strategies for successfully marketing these unique properties.
Understanding the Rise of Co-Living Spaces
Co-living is a real estate term that emerged from the rise of housing startups, which deliver homes designed to be shared by five or more adult roommates. These co-living spaces take several forms, from single-family homes renovated to accommodate non-related residents to floors in high-rise buildings converted into dormitory-style lodging and beyond. In general, co-living can refer to anything from master-planned communities to simply living with roommates.
Multiple elements have led to the increase in popularity of co-living spaces. For example, rising rent prices, mostly in larger cities, have caused multiple renters to share space with non-related adult roommates. The impact of cultural shifts is evident, as remote work culture and modifications in social connectivity have led to more renters seeking out community in new ways. Co-living primarily attracts young professionals, students, city dwellers, and remote workers.
Key Considerations for Property Managers
Rental property owners and managers considering entry into the co-living market will be faced with both positive and negative aspects. Some of the key factors to consider include:
- Lease Structures & Flexibility: There are pros and cons to renting a single unit or property to multiple tenants. Personal leases can offer renters more flexibility while allowing rental property managers to achieve greater stability in rental income and lower turnover costs. Conversely, this advantage necessitates managing individual leases and lease renewals for multiple people, which can heavily elevate a property manager’s workload. Another choice is to offer group leases, which can reduce lease management; however, this approach could introduce various drawbacks.
- Furnishings & Shared Amenities: Another critical factor is how to design a co-living space for community living. Even though arrangements vary, it is common for residents of co-living properties to anticipate communal spaces designed to promote gatherings. Property managers have the opportunity to entice co-living renters through the strategic design of communal indoor and outdoor spaces. Presenting furnishings, decor, and shared amenities can ensure that residents are comfortable and prevent any single individual from dominating communal spaces.
- Tenant Screening & House Rules: Another consideration in co-living rental properties is ensuring compatibility among co-living tenants. As non-related adults, residents of a co-living property may seek to occupy the space with individuals whose lifestyles and personalities match with their own. This presents an obstacle for rental property managers as it requires careful management of expectations and responsibilities concerning communal spaces. Having a clear set of house rules can effectively delineate responsibilities and clarify expectations for conduct among non-related residents.
- Legal & Zoning Regulations: It is important to take into account the local laws regarding shared housing. Some municipalities have firm regulations about the number of roommates and/or residents in different housing types, so it is crucial to conduct your research prior to proposing a co-living rental.
How to Successfully Market Co-Living Rentals
There are some unique elements of marketing a co-living rental property, making it important to bring out the benefits that attract renters to co-living spaces to begin with. For example, in your advertising, it is essential to highlight benefits like cost savings (mostly when compared to standard rental homes), community engagement, and location.
Renters looking for co-living spaces typically prioritize properties with easy access to urban centers and local arts and entertainment options. The primary methods employed for locating and applying for rental homes include the utilization of social media platforms and rental listing sites. Utilizing Internet marketing methods and highlighting key features in your marketing can facilitate the attraction of the type of renters specifically seeking co-living rental homes.
Is Co-Living the Future of Rental Housing?
There are multiple reasons to explore co-living rentals as a unique and profitable option for your properties. Nevertheless, co-living may not be acceptable for all rental properties or areas. This is why fully understanding all the benefits and challenges of managing co-living spaces is a crucial initial step.
If you’re interested in managing or investing in co-living spaces, please contact your local Real Property Management Faith office. Our objective is to offer the necessary assistance for you to make well-informed real estate decisions in Lawrence and nearby. Our team is equipped to provide insights on market trends, investment strategies, and operational management. Reach out to us or call 317-219-4363 for additional information!