Investing In Co-Living Properties: Two Important Things To Consider
We have a new real estate buzzword for you! The latest coming from all over the country is co-living.
Focused primarily on a younger generation, co-living is a reference to roommates which is certainly not a new term. Put simply, it’s an approach to living that involves a group of people in the same house, sharing its amenities and of course, the expenses as well.
The advantages of co-living are plentiful but two of the primary reasons more and more people are trying it is the low cost and neighborhood in which the living space is located. It’s also much easier to find tenants to fill vacancies because people are looking for more affordable living accommodations now more than ever.
Before you dive right into searching for your first co-living investment though, consider the points below as they can determine the success of your venture in the future.
Purchasing the Right Co-Living Property
Purchasing existing properties and turning them into co-living spaces is often the best plan as new developments don’t have to be built and flipping a building is much more cost effective.
Searching for a duplex with features that can be easily torn down and rebuilt to specifications is a great place to start. Whether it’s a side-by-side or two-story duplex, these types of dwellings can suit the needs of pretty much anyone.
In larger metropolitan areas, triplexes, quad lexes, and townhomes are also great options to consider.
If you’re looking for a larger investment, an existing apartment building may be the right choice for you. Some apartment buildings may already have existing communal spaces that can be fixed up to meet the needs of your co-living tenants. Even if they don’t have existing communal spaces, you should look for properties that have space to flip into these communal areas.
Timing & Positioning Your Co-Op Living Investment
Below are a few examples of real estate investors solving actual problems that they come across within the market. You should consider diving into these trends on a local and national level to find markets to tap.
One developer sees co-living as being a viable living alternative for adults, not just the millennial or the kids in college. With much smaller retirement funds to tap into, the need for less living space, as well as evidence showing loneliness as a big contributor to poor health, it’s only a matter of time before co-op-living becomes the norm.
Another trend to follow is the nature of work. As the culture and values of Silicon Valley based companies continue to permeate throughout the country, how people work will continue to change.
Mark Zuckerberg’s famous five bedroom crash pad when Facebook began to scale is perhaps the earliest clue into how the nature working and living will change. Since that time, startups like Common, WeLive, and group living style homes like OpenDoor, have grown in popularity.
These examples of co-living indicate several important things. One is that it is not a new or risky trend that is just happening now. It is something that has been around for a long time but is just becoming more feasible as well as noticeable.
The examples also show that what the developers are doing on a large scale can be mimicked on a much smaller scale by an average property owner willing to invest in the right property.
Just as important is that there are multiple target markets for this venture and one that is not only growing but expanding, meaning you can position your investment and profit in many different ways.
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