Why investors are signing up for CO-LIVING
Co-living has quickly gathered momentum in the UK and is cementing its status amongst income-seeking investors.
The demand for properties that cater to young professionals interested in the lifestyle known as ‘co-living’, is creating new investment opportunities within the UK rental market. Millennials have shown they are willing to pay a premium for the convenience of living in a design-led co-living property. One neat monthly payment includes their rent, utility bills, internet, weekly cleaning and in some cases, gym memberships, restaurant, bar and café discounts.
What Is A Co-living Property?
Co-living describes the lifestyle that comes from living within a community – an environment designed to improve relationships and bonds between tenants. This is achieved through building dynamic social spaces so tenants can spend time together, eat and enjoy entertainment together.
In property terminology, co-living is a design-led House of Multiple Occupancy (HMO), focused on individual and community wellbeing. Happy tenants are often long-term tenants. They are willing to pay extra for services that make their lives easier and more enjoyable.
Why Is Co-living A Popular Concept With Tenants Today?
There are many factors that contribute to the rise in co-living property demands which include:
• The lack of suitable and affordable housing, particularly for young adults. Co-living provides a more cost-effective living experience, with the added benefit of enjoying a healthy social life.
• Stagnant wages and booming property prices translate to the inability to save sufficient down payments or qualify for sizeable financing to buy property, despite historically low interest rates.
• A growing interest in non-committal lifestyles, where people prefer not to be tied down to a long contract (much like a no-frills gym membership) or accumulate a lot of furnishings and belongings.
• An increase in feelings of loneliness, isolation, and depression.
The Tenant First Model
At Scott Baker Properties, we develop every property with the future tenant at the forefront of our focus. We refer to this model as ‘FIRST’ – Find, Investigate, Research, Systemise, Tenant. It doesn’t matter whether we’re converting a house to a 5-bed Next Level HMO ®, or an office to a 30-bed purpose-built co-living space. If we follow this model, we always maximise return on investment. By working this way, we’ve built up a sizable, high-yielding property portfolio.
18 Arpley Street, Warrington An 8-Bedroom, Next Level HMO ® & Co-living Property
We purchased 18 Arpley Street in August of 2019. The property was sourced by our project manager, who knew we had other properties in Warrington and were looking to build the portfolio. With some architect sketches to hand, we went to view the property to plan what we could do to create a co-living experience. The purchase completed in the same month and the builders started straightaway.
We knew that by using permitted development rights, we could convert the loft and have two sizeable living-bedrooms in that space. There was already one bedroom in situ but the layout hadn’t been utilised to its full potential.
We changed the design, building a dormer at the back of the property to create a second bedroom. We also converted the basement into another bedroom with an ensuite, applying for planning permission to extend the light well to increase the amount of natural light. At the same time, we put in planning to extend the rear of the property, incorporating a cycle store and kitchen-diner extension.
The building company transformed what was originally a 3-bedroom semi-detached family home into an 8-bedroom Next Level HMO ® & Co-living property. At the heart of our thought process, we always keep the tenants in mind, considering their wellbeing and how they’ll feel in each space. We aim to make them feel comfortable, safe, secure, at home and part of a community.
How Do We Do It?
Using our expert knowledge in professional property developments and investments, we’re able to help UK residents live in high quality, affordable homes focused on community living. Every project is sourced and renovated by us with the backing of private investors and individuals. We also work with small-medium sized businesses looking to grow their savings.
Next Level HMO ® and Coliving properties are a high yield cash flow strategy. Done correctly, they bring about high capital growth.
“The majority of our investors look to reinvest with us”
Property Investment and Development
We secure, fund and develop residential and commercial properties into new homes.
With an eye for planning gain and identifying value through proactive asset management, we have the experience and resources to acquire and make-good even the most complex of projects.