Co-Living Investment in 2021 – Top 4 Reasons you must know!

  • Author: Tanvi Warekar
  • 5 min read
  • July 29, 2021
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The Real Estate Sector has been the most dynamic one with new trends coming up almost every year. While some trends fail to meet the market expectations, a few deserving trends rock throughout the decade. One such trend in the making is ‘Co-Living’. Co-living is the new modernized rental housing system equipped with multiple amenities at a seemingly lower cost. What distinguishes Co-living from traditional rental housing is the ideology of community living. Renting a house with people that connect with you but at the same time enjoying a personalized space is the prime focus of Co-living.

As a real estate investor, finding the right trend that can sustain its time in the market is essential to make wealth in real estate. Commercial Real Estate is currently witnessing a major shift from traditional office spaces to warehousing, co-living spaces, and so on. Thus, it’s time for Commercial Real Estate Investors to take their leap towards Co-living spaces as the ‘Investment in Future’.

Are you wondering about the scalability and the prospects of Co-Living? Then keep reading! In this article, we discuss the top 4 reasons why new age investors should allocate a sizable portion of their portfolio towards Commercial Co-Living spaces. 

Consistent Rentals

The rental income in a Co-Living space is consistent for a major part of the year. This is due to the unique setup of the Co-Living business as well as the clientele that it caters to.

  • Commercial Co-Living has an added advantage over Residential rentals. Though Co-living offers rental housing, the third-party management running the business has fairly higher expertise in managing the flow of rentals than traditional residential rentals. 
  • Another added benefit is that the tenants in a Co-Living generally consist of Working professionals or University students who have a larger time frame of residence. 
  • Even though the Co-Living offers flexible stays for tenants, the all-inclusive ecosystem at such lower shared costs makes it the perfect rental housing for the millennials. Thus, it ensures the turnover and vacancy rate to be minimum which keeps the rental income fairly consistent around the year.

Pre-leased Co-Living Properties

Most Commercial Properties are offered to retail investors by pre-leasing. Since institutional-grade properties like Co-Living have a very high ticket size, retail investors find it extremely difficult to enjoy any exposure to such premium quality assets. Addressing this divide, many fractional ownership platforms like Assetmonk have innovated the Commercial Real Estate Space by offering part ownership of already leased spaces at a much lower cost. 

Wondering what is so good about Pre-leased properties? Here is the list:

  • Predetermined Rental Yields
  • Low Initial Investment
  • Immediate Return on Investment
  • No maintenance Cost
  • One-time Investment
  • Property managed by experts

Thus, for any investor with even zero knowledge about Commercial Real Estate, pre-leased properties enable them to operate in high-end properties. Investing in Pre-leased Co-Living properties gives retail investors the benefit of enjoying the returns without having to figure out the tenants and other complicated procedures involved in the business. Sounds like a great deal right!

No Associated Risks for Investors

Being a direct owner and operating the Co-Living on your own can be a tough task. Thus, going through the pre-leased route relieves retail investors from all the hassles of managing the rentals actively. Furthermore, Co-Living benefits investors due to its least risk model.

  • Tenant Risk 

The risk of dealing with troublesome tenants puts a lot of pressure on the investors. But with Co-Living as a rental housing investment, the risk of finding rental tenants falls on the Third Party operating the business. You enjoy the fixed rentals irrespective of the number of tenants occupying or leaving the co-stays.

  • Legal and Compliance Risks

Purchasing a property includes tons of legal and compliance aspects which need to be duly followed by the transacting parties. However, investing in a Co-living space through a pre-leasing route is a bit different. The mediating company does all the paperwork and ensures the viability of the project. The investor just parks the funds and enjoys consistent returns throughout the tenure.

Future Scope for Co-Living

The Co-Living tide is preparing to bring in a tsunami of changes in the Rental Housing system in India. With a modern touch to the traditional PG system and incorporating the ideology of living in a community, the Co-Living concept is here to stay for a long while. Despite the pandemic scenario, the future scope of Co-Living is bright due to the new lifestyle modifications imposed by the Covid.

The new ‘Work from Home’ life with social distancing restrictions has made people root for a renewed form of social interaction. The Co-Living ecosystem aims to bring people with shared beliefs together and at the same time provide a comforting personal space. Working professionals, University students, Senior Citizens, and a lot more people having a shared ideology can adopt Co-Living as the best rental housing option. And the best part for a wider acceptance of Co-Living is the affordability and accessibility of the amenities.

For any Real Estate investor, it is important to gauge the future. Projecting the future outlook of this newly emerging trend can prove to be an important aspect to catch the early trend. Making thoughtful decisions and doing your complete due diligence is always necessary to make a successful real estate investment. 

The above four takeaways are the true indicators of why retail investors need to pitch in Co-Living spaces as their next CRE investment in 2021. Entering an attractive position in the market is always beneficial in the long run!

For all the excited investors, Assetmonk has witnessed the growing popularity of Co-Living spaces in India and is collaborating on India’s first Airport Co-Living Venture ‘The Landing’ in the premises of GMR Hyderabad Airport SEZ. It’s a first-time opportunity for any retail investor to invest in the much demanded Airport premises in India. With fractional ownership and fixed rentals, The Landing is set to provide a long-term investment opportunity with profit-sharing avenues. To know more about the project and your investment needs, Get Started with our experts through our website.

Co-Living Investment in 2021 FAQ's:

Co-Living is an emerging trend in Commercial Real Estate in India. Such spaces offer consistent rentals to the investors with minimized risk and. In a post pandemic world, Co-Living has a high scope for acceptance.

The benefits of investing in pre-leased Co-Living spaces are:

  • Predetermined Rental Yields
  • Low Initial Investment
  • Immediate Return on Investment
  • No maintenance Cost
  • One-time Investment
  • Property managed by experts
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