According to CBRE, there were an estimated 5,000 coliving beds and 150 coliving properties in the United States at the end of 2019. Although the pandemic disrupted some of those properties, rising rents and low inventory levels have ensured that this trend remains popular.
Managing coliving properties is a unique task that comes with unique rewards. Here’s a closer look at what the coliving trend is, its impact on the rental market as a whole, and how to determine if coliving properties are right for your portfolio.
What Is Coliving?
At its core, the coliving trend represents a new take on shared living space. Typically, this model involves providing a private bedroom and bathroom, alongside communal living spaces and shared amenities.
However, in addition to the shared living space, there is often an added lifestyle component. These properties often host events such as happy hours or networking lunches to give residents the opportunity to socialize.
Coliving is most popular in major cities, where residents are generally willing to sacrifice space for reduced rents and a convenient location. They’re usually a more affordable alternative to traditional apartments in high-cost-of-living areas. Plus, as you might imagine, the concept typically resonates with a younger crowd that enjoys the flexibility and affordability provided by short-term leases and lower rents.
Common is one of the dominant players in the coliving industry. They currently own 62 properties in 13 cities with 6,430 members on their roster. They specialized in fully furnished units with short-term leases in urban centers.
Are Coliving Spaces Right for Your Portfolio?
While coliving properties typically garner higher rents—which often translates to a larger salary with plenty of amenity perks—these properties may not be the right fit for every property manager. After all, properties that cater to niche residents often require a specific type of property manager, as well. If you’re thinking about including some coliving spaces in your portfolio, here are a few things to consider before taking the plunge:
- Urban markets: Coliving spaces are typically found in urban environments, particularly in neighborhoods that are close to the action. If you have experience with properties in high-traffic urban areas, you may be better suited to manage a co-living property.
- Plenty of amenities: Since residents in coliving properties are giving up a certain amount of space and privacy, they often want coliving spaces to make up for it by offering plenty of high-end amenities. As the property manager, you need to be sure that you can handle the maintenance and upkeep that comes with a bevy of amenities.
- Lifestyle events: Not only do coliving residents want access to amenities, they also want to live a communal lifestyle. Be sure to include a planning and budget for regular lifestyle events for your community.
- Short-term, flexible leases: As you can imagine, coliving spaces rarely have lifetime tenants. Instead, these spaces tend to offer short-term, flexible leases that allow residents to enjoy their offerings before moving on to something more permanent. You’ll do best if you know how to handle a high turnover rate and have the marketing skills necessary to manage frequent vacancies.
- Younger clientele: Finally, the residents of coliving spaces are often younger than tenants who choose more traditional living arrangements. For many, it’s their first time living on their own, outside of an educational setting. As a result, you may have to be prepared to educate some of them on the basics of being a good tenant.
How Coliving Affects Traditional Property Management
If coliving isn’t the right fit for you, it could still affect your business. The waves the trend is creating in the industry reflect changing renter preferences that it pays to understand.
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If you manage a property in the vicinity of a coliving community, you may have to provide extra amenities in order to woo potential tenants. Coliving arrangements often offer a wealth of amenities that can not be matched by traditional rental scenarios, such as bars or coffee stations. As a result, your traditional rental may have to offer something equally as exciting to pique interest.
Consider offering a resident benefits package that combines some of renters’ most highly valued services, without having to adapt your overall business model or invest too much into the property, itself. It’s a great middle ground that can attract an even wider range of renters than coliving properties. While benefits packages can give you a reliable additional source of revenue, they often won’t require additional effort or staff time on your part.
Additionally, with the rise of coliving properties, more renters are looking to take a sense of community from their living situation. Gone are the days where no one talks to their neighbors. If you manage a property with multiple tenants, you may be able to generate more interest (and charge higher rents) if you offer some social events.
Although the sense of community that coliving offers might seem limited to larger, multifamily buildings, smaller properties can pick up on some of their tricks. Adding or upgrading even simple common areas like outdoors spaces, for example, can add value for renters looking for a greater sense of community. Even smaller upgrades to things like laundry rooms, lockers, and storage areas can do a lot to highlight the lifestyle benefits of your property.
Marketing to Coliving Property Owners
If coliving spaces do seem like the right fit for you, the next step is to figure out how to market yourself to coliving property owners. With that in mind, here are some tips on how to ensure that you can stand out from the crowd.
- Build a sleek digital brand: Most property owners want to know that you have what it takes to reach their target market. Having a robust online presence will provide social proof that you have the skills necessary to successfully market their property.
- Lead with the benefits of coliving property management: Often, property owners don’t want to deal with the headaches that come with operating a coliving property day in and day out. If you can demonstrate how bringing on a property manager will benefit the owner, you’ll be much more likely to seal the deal.
- Show ways that you can offer value: Most property owners want to hire someone who’s excited about the idea of managing their property. With that in mind, be prepared to show each property owner how you can offer them value. Take the time to research each property and come up with a list of suggestions for what you would do to improve life in the community. If the owner has just one property, or even a handful of them, use this guide to help you highlight all the benefits you can offer.
4 Tips to Effectively Manage Coliving Properties
Once you have a few coliving properties in your portfolio, managing them successfully is the key to bringing on even more clients. To that end, here are some tips on how to effectively manage co-living properties.
- Define your community’s brand: Every coliving community is different. The first step toward effectively managing the community is figuring out what makes life there so unique. Once you’ve defined its brand, you can use that knowledge to cater to existing residents and to market to future tenants.
- Build a strong team: Often, managing coliving spaces cannot be done alone. You’ll need to put a strong team in place that can help you manage the day-to-day operations and unique demands of a property that has multiple tenants and amenities, as well as regular events.
- Use the right tools: In coliving property management, using the right tools can help you take a ton of work off your plate. Property management software like Buildium can help you manage leasing documents, maintenance requests, rent collection, and much more, all while saving you time.
- Ask for resident feedback: At the end of the day, taking feedback from your residents into account is the best way to improve life in the community. Make sure that you put systems in place to gather feedback regularly and to implement any requested changes that make sense. Keep in mind that coliving residents expect digital, mobile-friendly communication. Luckily resident portals can offer those experiences and take some burden off your staff at the same time.
Coliving properties require a specific management style and approach to marketing, but, with the right plan in place, you can build a reputation and see some serious ROI in this vibrant, growing market.Read more on Multifamily