Co-living refers to a residential living model where individuals share common spaces such as kitchens, living rooms, and sometimes bathrooms, while retaining private bedrooms. This concept is not merely about shared physical space but also promotes social interaction and community building among its residents. It’s particularly appealing in Australia where high housing costs have made renting for individuals out of reach.
Why Invest in Co-Living?
1. High Demand: The demand for affordable, flexible, and community-oriented housing solutions is soaring, especially in metropolitan areas of Australia including Perth, Melbourne and Brisbane. Co-living addresses these needs perfectly, making properties that offer such accommodations highly sought after.
2. Enhanced Returns: Investors can potentially achieve higher rental yields with co-living investment than traditional rental property due to the ability to rent out individual rooms and shared spaces. This model maximizes the utilization of space and increases revenue.
3. Resilience to Market Fluctuations: Co-living properties can offer a level of economic resilience. The flexibility and affordability of co-living spaces can maintain their appeal across different economic cycles, potentially leading to lower vacancy rates. Having multiple tenancies at one address reduces the risk of the property ever being entirely vacant.
4. Social Impact: There’s a growing trend towards responsible investing, and co-living projects often align with these values by fostering community, and providing tenants an affordable and safe alternative to share house living.
Issues with Co-living
While the co-living sector offers promising opportunities, investors should also be mindful of its challenges:
1. Regulatory Hurdles: The legal framework governing co-living can vary significantly by location, requiring careful navigation of zoning laws and regulations. You need to work with a team that have significant experience in managing co-living properties. Most agencies have no experience and we have assisted owners where they have been hit with large fines due to another agencies errors.
2. Management Complexity: Successfully operating a co-living space requires robust management to ensure harmony among residents, maintain facilities, and handle turnover efficiently. Tenants have slightly differing requirements across these spaces and tenant selection is vital. Certainty Property utilises special tools that reduce issue with tenant selection and improve your co-living investment return.
3. Market Understanding: Investors must thoroughly understand their target demographic and market dynamics to tailor their offerings effectively. Certainty Property has an excellent reputation in the Co-living space. Having spent many years understanding and refining their offers.
To maximise the return on your co-living investment, there are a few simple steps that must be undertaken.
All Co-living properties must come furnished, this adds to the appeal of the property, it provides for the right style of tenant, and ensures you can maximise your rental returns. Of course all furniture is tax deductible and all of our investors have access to a full depreciation report.
There must be are a set of guidelines for tenants, these are typically rules on behaviour and unacceptable conduct. CCertainty PRoperty prepares these for all of our co-living clients.
