What is Co-Living and How Does it Work?
Over the last decade, Co-living has become more and more popular than ever before. It is a modern form of shared housing for like-minded people to live, work and socialise together. These fully furnished, specially-designed living spaces create an inspiring environment for people to interact and share experiences. The biggest draw for choosing to rent in a co-living space is often access to the community. It is a trendy concept embodying communal-style living that appeals to the millennial generation of professionals.
This type of accommodation is usually chosen over other options such a BTL or house-share not just for the positive aspects it hopes to add to a person’s lifestyle, but also for the competitive cost and often extensive list amenities included in the price tag.
Here are some of the things that you need to know and might want to consider before either choosing to live in a place like this yourself, or before you chose to adopt this approach with some of your own investment properties.
What is Co-Living?
Co-Living, or community living, is all about living together with others in one communal space. This community is created and designed for people who are willing to interact and will often share their social circles, as well as holding similar personal beliefs and values in life.
All residents live under one roof but have their own bedrooms and possibly bathrooms; they will use the same basic facilities like kitchen, dining and living spaces. It can be an affordable alternative for those looking to live in a much sought-after location but may not be able to afford an entire apartment or house due to high rents in said popular area.
Co-living is not a new concept – communal living has been practiced for many many years across the globe and within various different societies. However, the trendy new term which we are referring to which you might hear quite a bit within the property investment world refers to an updated communal idea of large scale, purpose-built residential accommodation in which residents live in studio style rooms with a typically larger provision of shared communal facilities than standard purpose built developments. Fancier spaces might even include bespoke gyms, underfloor heating, private garage spaces and much more, depending of course on your location within the UK and budget.
Co-living has seen a recent rise in demand because it enables working professionals to live in modern, newly-furnished spaces with a range of amenities at an affordable cost. It is reimagined to provide a better way of living while complimenting the basic needs of a modern lifestyle.
A growing demand to create space combined with our increasingly refined lifestyle is creating an very apparent issue here in the UK: where can we put all the people? The answer - more and more so - is co-living. The concept is fairly new in the UK however, it fundamentally provides a land efficient alternative to traditional residential accommodation, with developers able to build more units per plot of land.
How does Co-living Work?
The system of Co-living is very simple. Residents can pay for a room and are allowed to use the facilities available. Most co-living has flexible payment terms whether it is weekly or monthly and can offer various payment schemes to help suit the tenants work commitments. They can also get to enjoy add-on services such as daily housekeeping, laundry and on-call resident facility management. It is typical for residents to pay an all-inclusive monthly rent – just like many HMOs - which includes utilities, council tax, broadband, washing and drying facilities, as well as access to all communal areas.
Allsop, the independent property consultancy comment that “The JLL European Co-living Index 2019 predicts that the European Co-living sector is set to grow from around 6,480 operational beds in 2019 to 20,400 by the end of 2021. London boasts the largest Co-living market in Europe with around 22% of the total number of beds, however investors and developers are beginning to target other UK & Irish cities such as Manchester, Glasgow, Edinburgh, Dublin and Liverpool.”
Just like the other spaces, co-living has also its Pros & Cons:
· Cost-Effective - cheaper rather than renting independently
· Low maintenance
· Living with Like-minded Individuals
· Career networking and contacts
· Enhanced social life
· Combats loneliness in urban areas
· No control over roommate selection
· A chance that you won’t get along with others due to differences
· Lack of privacy if that is something that is important to you
· Expectations vs. reality mismatch
Co-living appeals to all types of individuals who want to live in a new city in an affordable and exciting way.
Before making your final decision, ask yourself first, “Is Co-living for me?”
If you are a property investor considering this, you could be drawn from the student accommodation, build to rent or hotel sectors, or hybrid operators, all of which have some overlap with co-living. According to CBRE, “The product could also appeal to the institutional market with an operator management agreement. In terms of pricing, the levels of return would need to compare sensibly with other ‘bed sector’ investment opportunities.”