In their quest to be socially responsible along with increasing their return on investment, property investors are turning their attention to the value to be found in Co-living properties. In this article we ask investment property strategist, ELIZABETH JACKSON to explain the concept of Co-living and the financial opportunities it offers to property investors.
Co-living is a modern form of shared housing for single like-minded people to live, work and play together.
Designed to address rising property prices and the inability for so many Aussies to get onto the property ladder, it’s a socially responsible investment that helps those at risk of home insecurity to find a safe and secure place to live.
Investing in a Co-living property is designed for the educated investor with a particular taste for high yielding properties without having to sacrifice capital growth.
The biggest value to residents joining a Co-living space is access to a community and a reduction in their living costs.
In a sign of our economic times and how unaffordable the housing and rental market has become, a typical Co-living tenant earns between $60,000 and $75,000 a year and they are currently using up to 50% of their income just to keep a roof over their head.
Co-living provides singles living on an average income an affordable rental option and property owners with an excellent return on investment.
So, what does Co-living look like?
The specifically designed living spaces that form a Co-living investment property create a secure environment for people to interact and share experiences. Co Living also encourages socialisation and eases the feeling of loneliness and isolation.
A Co-living home is fully furnished. It’s a shared house environment in which each tenant has a secure, private airconditioned, lockable bedroom with their own bathroom and wardrobe. Tenants reside under a shared tenancies lease.
The kitchen, living, and dining area in the home is a shared space. The pantry is designed for food separation and the kitchen bench is extended so multiple house mates can food prep together. The home is designed so residents can enjoy socialising with their fellow housemates but also have privacy and their own space when required.
The case for property investors.
Co-living homes deliver investors up to 80% more income than a standard investment property.
To date the Co-Living rental market has been mostly ignored by the new property development space and entirely undersupplied. This provides switched on property investors with an opportunity to expand or diversify their existing portfolios.
Co-living is tightly wrapped into a rental market. Just to meet population growth over the next 20 years Australia needs 1.5 million units, and at its best the market could deliver 1800 units a year.
And if you need further confirmation of the pent-up demand for Co-living spaces? On Flatmates.com.au there were 14 million searches from 2.8 million people this year alone. In just one month there were over 490,000 searches.
The simplicity of the Co-living model is as breath taking to the investment property space as Chanel was to fashion.
What does Co-living look like for a property investor?
- There are 3 individual tenants in the Co-living home all on individual tenancy agreements.
- Rental is $280-$300 per week per room – dependent on the local market.
- Total income is $840-$900 per week.
- Comparable income for a standard home is $450 to $500 per week.
- Homes are fully furnished – tenants just move in.
- The property is fully managed by dedicated program managers.
The benefits of Co-living for tenants.
- A home where people can live with common interests and lifestyles.
- Own, dedicated personal space.
- Own, private bathroom.
- Lockable pantry and storage.
- Fully furnished and ready to live in.
- Air-conditioned space.
- Realistic and affordable rental costs.
- Interactive property management.
How Co-living tenant and property management processes work.
The property owners Co-living investment is managed by a professional property manager who specialises in the area, so owners can feel secure with their investment being looked after.
- A dedicated team of property managers who work solely for our builder.
- A sound tenancy vetting process that includes a personality test to ensure living compatibility.
- Individual tenancy agreement .
- Individual bond payments.
- Facebook page for community connection.
- Regular property inspections.
- House rules.
Co-living allows tenants the fundamentals of community living, connection, and affordability, while living in a new home with modern inclusions and new furnishings.
Co-living is oldest forms of affordable living, from London to Australia. The concept offers a solution that balances the love Australia has for property investing and the urgent need for affordable gorgeous homes for singles of all ages and demographics.
Elizabeth Jackson is the Principal of Public Property, and producer of Got Money TV. If you would like to know more about investing in a Co-living space you can email Elizabeth or give her a call on 0414 316 557
General Advice Warning: The advice has been prepared without taking into account your objectives, financial situation or needs. You should therefore consider the appropriateness of the advice, in light of these objectives, financial situation or needs, before following the advice. We recommend that you speak to your accountant and financial adviser to help you determine whether direct property investment is right for you.