The newest housing trend provides real value for landlords.
I’d love to give you a rock-solid, Merriam-Webster-esque definition of “coliving.”
The truth is, I can’t.
Coliving is the newest buzz word in the housing market – and it might be a confusing concept for landlords and property managers to understand. It’s a catch-all term that applies to many different new-age solutions to apartment renting. A coliving situation could encompass a group of roommates living together in an apartment, a pre-furnished room in a house meant for shorter-term stays or a dormitory-style tower for adults.
The concept isn’t new, but it’s going to change the way the rental market works. For us at SplitSpot, we are often categorized as “coliving” since we enable tenants to rent individual rooms in a shared apartment.
No matter what way you slice it, anyone who has multi-family real estate in their portfolio should be exploring a form of coliving as a potential option for renters.
Let’s investigate more:
The demand for coliving is real
Data from the U.S. Census Bureau reveals that the number of 18-34 year olds living alone decreased by 10.3% from 2005 to 2015. Coliving market size estimates have ranged in the scale of upwards $500B.Rising real estate prices, increased student debt and other factors have made buddy-ing up the norm for young renters. Remote work is also increasing and workers are expecting the rest of the world to follow suit in terms of flexibility.
Coliving is a concept that helps meet the needs of these younger apartment hunters. While the term itself can refer to different housing structures, it’s hinting at a simpler reality; renters are seeking more flexibility with shorter and/or more customized leases and veering away from the ultra-structured, long-term leases that used to dominate the market.
Landlords seeking to fill rooms across their entire portfolio need to adapt to this reality and find some creative solutions that work for renters.
Coliving is a useful asset for property owners
Coliving is an asset class that is growing – it makes sense for any property owner to have some exposure.
Ground-up coliving developments are now part of the market. Research from CBRE shows that the U.S. nearly 5,000 beds in 150 coliving spaces in 2019. On top of that, it’s estimated that these spaces could bring in a premium, above-market rate – up to 38% higher than conventional apartments.
That’s a testament to the market need for coliving solution, and whether it’s a new, purpose-built coliving facility or an existing multi-bedroom unit that allows renters to easily lease one bedroom without any hassle, consumers will be increasingly demanding this type of rental agreement.
Navigating coliving as part of a property portfolio
Most of the world is used to doing leasing in the “traditional” way: groups of roommates sign a 12-month lease and the property owner comes back half a year later to see if the group will stick around. This method of leasing has more or less ‘worked’ for decades, but increasing demands for flexibility and the new realities of the urban multi-family landscape have made it more challenging to continue on with “business as usual.”
As the aforementioned need for flexibility increases amongst renters, landlords will have to adjust to some of the new realities of coliving. Finding tailor-made roommate groups and then managing the churn of more-constantly changing roommates is becoming more and more daunting. And standing out in the competitive urban rental market is a challenge in itself, especially considering the many new offerings coming to market, as mentioned above. Luckily, there are tools at a landlord’s disposal – tools that make coliving (and its accompanying above-market rates) a realistic, and advantageous, option for all parties.
How can SplitSpot help?
SplitSpot is a solution to landlords and renters to meet the growing demand for coliving situations. In addition to marketing and leasing your vacant apartment rooms to prospective tenants, SplitSpot will manage each household’s bill payment and collection, and provide landlords ancillary benefits (like triaging maintenance tickets) to make renting rooms easy. We’ll manage the churn of renters – all while providing the positive tenant experience that your renters crave.
Sign up to see if your units qualify and take a step towards partnering with SplitSpot. Coliving can be a win-win for you and your renters.