Just as the market for co-working spaces is growing in the commercial sector, shared occupancy residential properties are becoming increasingly popular. Because it’s possible to cater for more tenants per property, co-living spaces present an excellent opportunity for landlords to maximise their investment.
While shared accommodation has always existed, co-living is a much more considered approach to renting to multiple tenants. Inspired by the ideas that drive co-working environments, co-living spaces are often specifically designed to offer quiet, private bedroom areas, with stylish open-plan living spaces for socialising.
Co-living spaces are especially popular among young people and in metropolitan areas. Co-living concepts for students have been around for some time, but more recent growth in industrial conversions has also opened up the market for higher-end spaces for young professionals.
The demand for these spaces is reflected in the rise of branded developments. These luxury properties focus on added services like gyms, bars and other facilities that complement the design of the apartments – selling a lifestyle as well as a space.
There can, however, be some barriers to entry. In certain countries, converting properties is the first hurdle: in Germany, for example, re-zoning properties for residential use can take time, money and paperwork. In other countries, there may be stringent requirements for having a co-living space approved by the authorities, including acquiring safety certificates and showing there’s sufficient floor space and facilities for the intended number of tenants.
To ensure you’re on the right side of the law, check government websites or consult with solicitors or a good real estate agent.
Finding the perfect tenant can be tough, and that’s even more true of co-living spaces, where you’ll be looking for multiple occupants. Start by devising a solid co-living concept, hinging on local amenities, to find your target market. Are the transport links ideal for commuters? Are you near the university and therefore targeting PhD students or early-career researchers? Is there a thriving cultural or culinary scene?
Next, consider how you’ll arrange and furnish your property to appeal to your market. You’ll need to strike a balance between private areas like bedrooms and bathrooms (making sure there’s enough of each), and social areas like the garden, terrace or even bar. You might like to make a large, well-appointed kitchen the centrepiece of your scheme: this will be a key area for your tenants to meet and mingle, so it’s important that it’s an appealing place to spend time, as well as having enough space and equipment for everyone.
Lastly, pay attention to the details: from super-fast broadband to high-quality kitchen appliances, these will make a real difference to your tenants’ lifestyle.
It’s vital to shop around for a local real estate agent who knows your market. They should be able to locate properties that would be appropriate for conversion to co-living in terms of location, size, style and return on investment. They may also be able to tap into their network to help you find forward-thinking tenants who’ll appreciate the lifestyle.
Finally, you should carefully consider your pricing. Co-living tenants will expect value for money but aren’t looking for a cheap house share, so work with your realtor to ensure you pitch your price point perfectly.