Can Co-Living Solve Housing Financial Stress?
Homeowners and home seekers alike are experiencing a housing crisis, as major cities in Australia have pushed rent and property prices. Inflation and property shortage have made it difficult for low and middle-income earners to find a suitable dwelling.
Hence, people are continuing to pursue alternative housing options to grapple with rising costs. One such answer is co-living or shared living, which opens up parts of the home to additional residents to make a common and social living space. In a recent study, it was found that 40% of Australians consider shared living due to financial struggles.
Co-living is challenging the traditional notion of housing. But is it the better choice for students and young professionals? Let’s explore the potential of shared living and how it plays a role in resolving the housing crisis.
Co-living Australia
What is co-living? It is a housing model that involves sharing living spaces with other residents apart from the owner-occupiers. The home is designed to facilitate communal building and social interaction.
In a co-living setup, residents maintain the privacy of their bedrooms while partaking in communal areas like kitchens, living rooms, and co-working spaces. Some examples of shared living include shared homes, buildings, and purpose-built communities.
Co-living is marketed to young professionals, students, and any single individual seeking a modern home setup that allows for more networking, and social engagement. But perhaps the most welcome aspect of shared living is the lower costs. Because there are several shared spaces, co-living is more budget-friendly compared to renting an apartment on your own or maintaining a single detached home.
Critics of such a setup note that co-living could sacrifice privacy. Sharing living spaces can cause disagreements among tenants over things like noise levels, time using shared spaces, etc.
Another challenge is stability. Many co-living properties only offer short-term leases. This will not suit home seekers who are after a more stable living situation. Builders and investors can also experience regulatory and legal issues, as co-living may have a tenancy and building code laws that differ from single-detached home development.
Co-living as Investment Property
Investors these days are eyeing co-living properties for a smart financial move. Why? Because they promise better returns, especially in terms of rental income. This boost in rental income primarily comes from an innovative approach: housing multiple tenants within one property.
Unlike typical residential properties where one tenant occupies the whole space, co-living properties divide their units into multiple bedrooms or mini apartments. These individual spaces give tenants privacy, while they share common areas like kitchens, living rooms, and co-working spaces.
This shared living model may provide a solution for both home seekers and investors alike. Investors can pull in multiple rental incomes from one property, which significantly boosts their overall rental yield. This efficient use of space turns into a smart investment, outperforming traditional housing setups.
Co-living properties can also potentially cut down the risk of vacancies; if one tenant moves out, others keep paying their rent share and provide a steady cash flow for property owners. Rental seekers could then have no trouble finding housing even in the supply shortage being felt today.
Another financial perk for investors and renters: utility costs are shared. No one bears the full burden of these costs, and it will keep the income flow going while reducing risks.
Explore Co-Living Investment
Given that things are still highly favorable for landlords in the housing climate, many investors are in a strong position to explore options like co-living. It can make for a more diversified portfolio if your financial circumstances allow.
Have any questions? Talk to us about capitalizing demand on shared living or co-living spaces and how to approach such a property.
