Real estate market trends and real estate investing are constantly changing to keep up with customers’ needs and lifestyle.The major issue that people who tend to move to big cities in the US encounter is the rising housing prices and the high property prices, making it hard for them to meet the housing market costs and demands. In response to that, a relatively new emerging real estate market trend is invading the US housing market, particularly in big and crowded cities such as New York, Boston and New Jersey, known as coliving. Let us dig deeper to understand what are coliving buildings, how they work and the pros and cons.
What are Coliving Spaces?
Coliving buildings in real estate investing are efficiently designed micro suites and micro studios that come with a bundle of services such as a cinema, a gym, a restaurant and a library. In addition to that, coliving buildings provide communal living and activities on an almost weekly basis, promising to make city life more affordable, more convenient and more social. This micro real estate investing does not only make it affordable and possible to live in big cities like the Big Apple, but it also enhances social and shared lives for its residents through community engagement, embracing the quality of relationships and multicultural and multinational experiences over the quality of square footage.
How Did It Start in the US Housing Market?
Companies like Ollie, based in New York, are trying to transform the real estate investing market with an updated version of coliving spaces by capitalizing on the increasingly expensive problem of living in a city. Founded by Christopher and Andrew Bledsoe, Ollie has raised up to $15 million to expand beyond New York City, with locations in Pittsburgh, Los Angeles, Boston and Jersey City, NJ. The company’s properties/apartments are designed to maximize limited space with high-concept design furniture and offer all tenants free Wi-Fi, premium television and other needed amenities such as soap, bed sheets, and shampoos. You can think about coliving buildings as extended-stay hotels/motels. Ollie does not only provide affordable places for people, but also cherishes community bonds, believing in the values of inclusiveness, discovery, wellness, and sustainability.
Why Is Coliving Thriving in Real Estate Investing?
According to Pew Research Center, there are more people renting currently than at any point since 1965 and the US housing affordability crisis is increasing as rent and low income become almost everyone’s problem; even real estate investing has to cope with it. For instance, as of 2018, one bedroom apartments in New York rent for $2800 a month on average (a 3.64% increase from last year) and a two bedroom apartment rents for an average of $3562 (a 2.95% increase from last year).
Ollie’s coliving spaces might not totally solve the problem, but it certainly makes it possible for younger generations moving to big cities to afford living there in addition to enhancing social life and engagement with others. Based on the available data, coliving is succeeding and getting further recognition in real estate investing; thus, investing in micro suites might be the actual future of real estate investing and you might consider this type of investment as a real estate investor.
Read “Real Estate Market Trends That Every Investor Should Understand“ to know more about real estate market trends.
Where Can You Find Coliving Buildings in the US Housing Market?
As micro real estate investing is emerging to provide affordable micro suites and studios for people living in cities, the first coliving building in the US was founded in 2016 and is located in Manhattan neighborhood in New York City. As of April 2018, another coliving building will open in Long Island City in NYC as the demand for micro real estate investing is increasing. You can also find coliving buildings in Los Angeles, Pittsburg, Boston and Jersey City. The common feature of all these locations is their high property prices and people’s demand for renting in these vibrant cities. Therefore, if you are considering investing in coliving buildings, you need to look for cities with high renting prices but also locations that attract people who try their best to afford living the city life.
Pros of Coliving in Real Estate Investing
- Affordability to Live in a City
Coliving might be the only way for so many people to afford living in an expensive city while taking advantage of the services this kind of real estate investing provides including essential amenities, gyms, swimming pools and libraries.
Make sure to read “Road to Renting: Rental Property Marketing“ to better understand the steps you need to take in order to rent out your properties.
- Create a Sense of Community
One of the main characteristics that attract people to rent a coliving suite or studio is not only affordability but also the sense of community these properties provide. These coliving spaces mostly offer social activities that bring renters together to cherish communal experiences that are culturally vibrant and intellectually stimulating.
- Provide New Lifestyle Options
With the quick rhythm of life and the more than ever globalized world we live in, many people, millennials in particular, are eager to try different lifestyles. Moreover, most millennials who live in cities do not spend much time in their houses and mostly use them for sleeping and eating sometimes which gives coliving spaces a sense of sustainability and increases renters’ demand over them and hence increases the occupancy rate.
Cons of Coliving in Real Estate Investing
- Coliving Spaces Are Not for Everyone
Obviously, not everyone will be able to live in coliving buildings especially families and old people as they lack enough spaces for kids to grow up in and some services that old people might need. Therefore, this type of real estate investing does attract millennials and single people in the first place.
As shared coliving apartments are limited in space and most of the services and facilities are shared, it makes it uncomfortable for some people who are introverts or prefer to have their own space and privacy.
One of the main reasons that secure the sustainability of real estate investing is its ability to cope with people’s changeable needs and requirements in different areas and locations. So whether you choose to invest in coliving spaces or not, you have to be aware of tenants’ needs and real estate market trends and always look for ways to be creative and innovative.