Responsibility of Residential Property Owner
As an owner of a residential property, you are often flummoxed in finding the right type of tenant to cater to. A family – big or small – is every residential property owner’s goal. It’s conventional and less troublesome to worry about. On the other end of this spectrum lies the single bachelor – often seen as troublemakers with whom one may need to tread carefully. But, nowadays bachelors aren’t getting a bad rap and are welcomed with open arms.
A recent study conducted by News Corp and PropTiger found that co-living has emerged as a real estate goldmine with a potential to become a $93 billion market.
“Rental yield in this segment is higher as compared to traditional ways of renting a residential property,” the study added. So, how did this influx in co-living accommodation happen?
The world’s sixth-biggest economy has a diverse young workforce, rapidly growing day-by-day and living away from their homes.
This demographic is looking for an affordable place to stay and in the past has looked at PG accommodations to cut down on their housing budgets. Perhaps this is the main factor behind the rise of co-living.
Co-living spaces are often confused with hostels and bachelor accommodations. In reality, it is not. Co-living spaces combine private living spaces with shared communal facilities.
Imagine a 3BHK apartment; each bedroom can be converted into a single or double or in some cases, a triple bedroom. Zolo, a fast-growing co-living brand has found that double and triple rooms are often the most sought after accommodations as they are inherently cheaper than a single bedroom.
Rohit Kapoor, CEO of Oyo Life states that “one of the big reasons for co-living being high in demand is the fact that co-living facilities have enabled youngsters to live in well-furnished spaces with a range of amenities at an affordable cost.”
Co-living spaces aren’t just for the workforce but also for students pursuing degrees in colleges and universities that are away from their hometowns. Cities with popular tech hubs and educational institutions are feeding grounds for co-living spaces.
Companies such as Oyo Life, Zolo, Co-live are the leading players in this industry but even with all the co-living space providers put together, there is a serious deficiency of beds.
According to News Corp and Proptiger’s study, established co-living space providers currently have just over one lakh beds while there are demands for nearly 4.63 crore beds.
With 65% of the country’s population falling under the 0-35 demographic, this trend is expected to skyrocket in the coming years.
Seeing the profits reaped by Oyo Life, Zolo and others, private residential property owners have dipped their toes into the co-living concept. As a residential property owner, you too must consider this majorly untapped resource. And lo, we arrive at the main reason behind this essay.
When the idea of turning your residential property into a co-living space comes to mind, woe takes center stage; particularly, financial woes. The costs involved in converting a residential property into a co-living space are often seen as a factor why most property owners back out.
This is where OwnersTown likes to provide you with cost-effective solutions to convert your residential property into a co-living space without burning a sizable hole in your pocket.
While co-living is derived from renting, it is a wholly different ball game. In co-living, tenants are willing to share living space and amenities with others in order to cut down on their rental budgets.
Moreover, the millennial generation has embraced social and communal living to a greater extent than the previous generations.
Co-living is not long-term living. The tenant pays rent on a monthly basis without the need for a deposit. There are no lock-in periods or investments in purchasing or renting furniture. This is one of the key factors behind co-living’s increased preference.
The first step to converting your residential rental into a co-living space is to invest in good quality furniture and appliances. So, what does every room need? Bedrooms require a cot with mattress, pillows, and sheets. The master bedroom can have an additional bed to convert into a double bedroom.
Alongside the cot, you will also need a TV, closets for wardrobe, side tables for both beds and adequate lighting – one LED tube light with two bedside lamps. Each bedroom requires a fan and air-conditioner apart from a pair of tables that can be used for study and work.
This also requires a number of plug points. Investing in USB socket chargers makes it easier for your tenants to charge their devices without the need for an adapter. Besides, having USB socket chargers will minimize the need for traditional plug points.
Each bedroom also requires an attached bathroom. In most apartments, there is always one bedroom that does not have an attached bathroom. This room can be used as a communal space along with the living and dining area.
Bathrooms require a bath area with a shower area, a wash closet, and washbasin. Most apartment bathrooms require little or no renovation to fit the bill.
Living and Dining Rooms
Living rooms in co-living spaces are often where the magic of social living takes place. These areas require ample seating. Investing in sectionals is recommended as a mid-sized sectional can accommodate more than six people – in the event your tenants are receiving visitors.
Living areas also require a split air conditioner and fans. Lighting in living rooms is divided between tube lights and lamps that accentuate the room. Some co-living spaces offer a television in the living room in case tenants want to watch a cricket match or a movie together. However, this has been seen as a negative investment as most tenants invite others into their rooms for TV viewing.
Kitchens require an induction stove, microwave, and a refrigerator. Modern co-living spaces also offer a juicer and coffee maker, enhancing the living experience for their tenants. A dining table that can accommodate four chairs is mandatory and can be kept either in the kitchen if there’s space or in the living area.
As mentioned earlier, most 3 BHK apartments come with a bedroom that does not have an attached bathroom. You can convert this space into a play area by investing in a TV with a gaming console (a second-hand PS3 or an Xbox is considerably cheaper) along with a group activity such as a dartboard, snooker table, ping pong table, foosball table, chessboard or even a carrom board.
Providing a set of board games (like Monopoly or Scrabble or Scotland Yard for instance) will also make for many socially enjoyable events.
A high-speed, unlimited bandwidth Wi-Fi connection is essential for a co-living space. Co-living spaces with round-the-clock power backup also attract tenants in droves. Along with this, 24-hour security is also a sought-after feature.
Most co-living spaces have also implemented the use of access cards and CCTV surveillance to remind prospective tenants that you are offering a safe and secure environment for them to live in.
You will need to install a washing machine and erect two or three clotheslines to dry clothes. If you can invest in a washer-cum-dryer, you will again be offering your tenants, a positive living experience. But, this is a luxury and can be avoided in place of a regular washing machine.
You will also need to employ a maid to clean rooms on a daily basis. Co-living spaces are comprehensive in nature and also offer a cook to provide homemade meals two times a day during weekdays and thrice during weekends.
But, for a private residential property owner, this can be ignored as long as you provide adequate kitchen appliances (stove, microwave, refrigerator, etc.).
Drawbacks of Co-living Spaces
As a residential property owner, you must prepare a fully laid-out contract to protect your rights as a property owner and set clear regulations for your tenants. Co-living tenants are only required to pay the monthly rent stipulated by you. Generally, they are not liable to pay electricity and water charges. Hence, these are also costs that you must bear.
The other important drawback is the short-term arrangement that co-living spaces usually come with. While this may sound like a predisposed notion, it is nevertheless true that most tenants spend on average four months in a co-living space. If tenants are offered a good living experience at a good cost, they tend to live longer.
However, there are things beyond your control on ensuring that a tenant stays longer; things such as disputes with other tenants or even changes in work or study locations. Hence, it is essential to advertise your co-living properties regularly so as to maintain a constant flow of tenants.
Thankfully, companies such as OwnersTown make it easier for you to advertise properties, profile tenants and record documentation and generate rent reports, making it easier for you – the residential property owner – to manage your tenants and reap the rewards.
Tier I and Tier II cities such as Delhi, Mumbai, Pune, Chennai, Bangalore, Hyderabad, Kolkata, Cochin, Ahmedabad and Gurgaon are the breeding grounds for co-living spaces. If you own residential property in these cities, you cannot ignore the profits you can reap by converting them into co-living spaces.
With big-name real estate developers considering tie-ups with established co-living companies to offer niche co-living offerings, the market is ripe for newcomers to tap into the untapped and reach greater heights.
As Glinda, the Good Witch says to Dorothy “there’s no place like home.” Co-living spaces are attempting to fill that gap by offering a memorable, shared experience by creating families – not of blood, but of bond – through their co-living spaces.
And with the right kind of Residential property management technology from Ownerstown by your side, managing these properties is going to be a piece of cake for you.