As the rental market continues to evolve, co-living spaces are a progressively popular option for renters priced out of traditional rental housing. Co-living spaces successfully attract tenants seeking affordability, flexibility, and a built-in sense of community. From young professionals and students to remote workers and city dwellers, renters are allured to shared living arrangements that give convenience and cost savings.
Though, on the flip side, co-living arrangements grant both opportunities and challenges for rental property owners and managers. Let’s look closely at the rise of co-living spaces, very important considerations for rental property owners and managers, and tactics for successfully marketing these unique properties.
Understanding the Rise of Co-Living Spaces
Co-living is a real estate term that originates from the rise of housing startups presenting homes designed to be shared by five or more adult roommates. These co-living spaces take multiple 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 broad terms, co-living can pertain to anything from master-planned communities to clearly living with roommates.
A lot of factors are driving the increase in popularity of co-living spaces. As an example, rising rent prices, specifically in larger cities, have forced so many renters to share space with non-related adult roommates. Cultural shifts have equally an effect, as remote work culture and changes in social connectivity have urged more renters to seek out community in new ways. Hence, co-living tends to entice most young professionals, students, city dwellers, and remote workers.
Key Considerations for Property Managers
Rental property owners and managers taking into account moving into the co-living market will be faced with both opportunities and concerns. A number 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. Nevertheless, individual leases can offer renters more flexibility while presenting rental property managers with more stability in rental income and lower turnover costs. The other side of that advantage is the need to manage individual leases and lease renewals for some people, which can unavoidably grow a property manager’s workload. The alternative is to offer group leases, which can reduce lease management although have other potential drawbacks.
- Furnishings & Shared Amenities: Another vital consideration is how to design a co-living space for community living. While arrangements differ, in most cases, residents of co-living properties anticipate having communal spaces that can lead to gatherings. Property managers can appeal to co-living renters by providing communal indoor and outdoor spaces. Bestowing furnishings, decor, and shared amenities can nail down that residents are comfortable and that no one person has control over communal spaces.
- Tenant Screening & House Rules: Another characteristic of co-living rental properties is warranting compatibility among co-living tenants. As non-related adults, residents of a co-living property may aspire to share their home with people who have lifestyles and personalities compatible with their own. This can be a concern for rental property managers as it deals with engaging with expectations and responsibilities related to communal spaces. Bringing about a clear set of house rules can help clarify these duties and set expectations for conduct among non-related residents.
- Legal & Zoning Regulations: An additional consideration is local laws regarding shared housing. Numerous municipalities have strict regulations about the number of roommates and/or residents in different housing types, so it is imperative to do your research prior to offering a co-living rental.
How to Successfully Market Co-Living Rentals
There are certain unique elements of marketing a co-living rental property, so it is crucial to emphasize the features that attract renters to co-living spaces to begin with. As an example, in your advertising, make sure to focus attention on benefits like cost savings (specifically when compared to conventional rental homes), community engagement, and location.
Renters looking for co-living spaces are normally allured to properties with easy access to urban centers and local arts and entertainment options. They also extensively use social media and rental listing sites to locate and apply for rental homes. By making use of digital marketing strategies and highlighting key features in your marketing, you can swiftly attract the type of renters who are going in search of 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 effective option for your properties. Though, co-living may not be the ideal option for every rental property or location. Therefore fully understanding all the benefits and challenges of managing co-living spaces is a very important first step.
If you’re interested in managing or investing in co-living spaces, please contact your local Real Property Management Greater Madison Metro office. We are here to give you the support you need to make informed real estate decisions in Madison and nearby. Our team can offer expert guidance on market trends, investment strategies, and operational management. Reach out to us or call 608-310-1290 to discover more!
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