A tenant who is a student or in the starting stages of his career, may not find it feasible to live in a property that commands a high rental. Often, such people live alone in metro cities, to complete their education or earn a livelihood. In such a situation, the cost of renting an entire apartment, along with expenses for food and maintenance, could be a heavy burden. However, with co-living spaces, people can easily afford the cost of living in big cities.
What is the concept of co-living rental housing?
Co-living is a new rental housing concept, wherein, fully-furnished living units are offered to groups of people who wish to co-habit the space, without the usual restrictions seen in the more traditional paying guest-type accommodations, explains Anuj Puri, chairman of ANAROCK Property Consultants. “While co-living spaces provide ample opportunity to their residents to mingle and interact, they also provide privacy at various levels – including from intrusive landlords,” adds Puri.
Co-living spaces, like car-pooling and co-working spaces, are the result of demand from millennials, students and young working professionals, whose choices differ vastly from those of previous generations. These are fully-managed spaces, much like serviced apartments but with several extras thrown in. Tenants can opt for private or shared bedrooms and there are also common areas for relaxation, dining and interaction.
Co-living spaces: Demand dynamics in India
Typically, the tenants who prefer to invest in co-living or shared accommodations, are young working millennials, who have very little free time. “The new-generation does not prefer to pay for spaces that they hardly inhabit. Nevertheless, they still prefer having all the facilities, without worrying about the maintenance and higher costs,” says Abhishek Kulkarni, chairman and managing director, Million SqFt Realty Private Ltd.
Statistics reveal that single working individuals spend barely about three hours of the day in the kitchen and living area, while the estimated time spent in the bedroom is around nine hours, on an average, Kulkarni elaborates. “Taking into consideration the rental value of the bedroom that works to just around 40% of the total, it is very important to have the less used spaces utilised by multiple inhabitants, to share the rents, services and maintenance bills,” he maintains.
Co-living spaces versus regular rental apartments: Main differences
Experts point out that property owners can benefit, by converting a normal apartment into a co-living space, as such spaces are witnessing considerable demand. Co-living spaces provide the opportunity to earn fairly steady rental income, although there is bound to be some churn in tenants.
Co-living spaces should be designed, keeping in mind the following factors:
- Hectic schedules of tenants.
- Contemporary demands of the current customers.
- The provision for additional facilities such as entertainment, safety and security, laundry and repairs and maintenance, without having to spend too much money.
Cities such as Pune, Bengaluru, Gurugram and Mumbai, were the first to witness the emergence of co-living rental housing. It is now also taking root in smaller cities such as Lucknow and Jaipur and other cities with large student and millennial workforce populations.
Maintenance cost of co-living spaces
As opposed to traditional rental accommodations, such as paying guest or outright rental, co-living spaces call for much higher investment, in terms of the setup costs, as well as regular maintenance and servicing. Hence, it is not suited for every property owner, as it requires a certain degree of knowledge about the requirements of co-living. It is also not always easy to get the required permissions from a particular housing society, to set up a co-living facility. “The main target clientele for co-living spaces are young working professionals and students but the demand for such spaces is by no means restricted to these types of tenants. In the future, we could also see single seniors opting for such accommodations,” concludes Puri.
Benefits of investing in co-living spaces