CO-LIVING: THE BULLETPROOF PROPERTY INVESTMENT

As the property prices continue to skyrocket, so do rental prices. Across Queensland, suburbs experienced double-digit increases in prices over the last year: Sunshine Coast – 15%, Central Queensland – 15.3%, Gold Coast – 10.9%. Average rental prices are now hovering around $500 per week or above that mark in more populated areas.

This is creating a conundrum, particularly for single renters. With the Queensland average salary at $66,000 annually, a significant portion of the population struggles to afford housing, paying close to or 50% of their weekly wages in rent. They are forced into overpaying for their own homes or being forced into poor-quality shared housing.

And for property owners, finding tenants to afford the rent is becoming more difficult, so they are forced to choose between collecting lower rents or having properties sit empty. Either choice is detrimental to their investment returns.

Co-Living Properties are emerging as heroes, saving both renters and investors from the burdens of an unaffordable rental market.

Co-living properties are purpose-built, designed so each bedroom is equally sized, with an ensuite bathroom, along with communal spaces for kitchen, dining, and living areas. Each room and tenant has an individual rental agreement.

Tenants are able to escape the pitfalls of typical shared housing, where each housemate has equal space in a brand-new, beautiful home, able to enjoy privacy while still being social, and there are no issues with sharing costs and utilities. Most importantly, weekly rent is significantly below average, typically around $300 per week depending on the property.

For investors, co-living properties’ benefits include a significant increase in cash-flow, due to the multiple rooms, but also the properties are proving to be a solid, strong investment, even in uncertain times.

“Co-living is the unique opportunity where each space is rented for below average, but the total cash flow for the property is higher,” says Matt Sully, CEO of APFG. “This segment satisfies the need for affordable housing, but also keeps investors extremely happy with rates of return.”

Co-living Properties’ Benefits for Investors

• Multiple streams of cash flow from one property. Each room has an individual lease. Depending on the number of rooms in the property – generally 3-4 – owners can collect rent from each room, maximising the cash flow. A 3BR property could generate 300/week from each room, or $900/week. Additionally, if one room is vacant, there is still income from the other rooms.
• Immediate cash flow once finished. As soon as your property is finished it is fully furnished and equipped for renters. Tenants can move in quickly, and once they leave, a new tenant can move in almost immediately.
• Built For Purpose and for easy management. Co-living properties are built specifically to meet the needs of single, independent renters. They are fully furnished with fixed fees for utilities. For investors, this translates into easy management of tenants, with a mutual understanding of fees.

Co-living: Solid, Stable Bulletproof Investments
It must be mentioned that co-living is not only profitable but the risks of external factors are also minimized. This is due to the market of single renters, and co-living properties generally cater to three categories, creating high demand and a neverending roster of available tenants.

“Even if the economy takes a downturn, the three groups that are using the co-living properties will still remain a very strong segment as tenants,” said Sully. “It is because of these segments that co-living properties will hardly ever be empty, and demand will continue to be high.”

• Medical & emergency workers – Co-living houses are extremely popular for medical or emergency workers, who work long hours and often have temporary assignments at hospitals. Even during recessions, or the recent Covid lockdowns, this segment continued to work as needed.
• Seniors – “There will always be a need for senior housing,” says Sully, “Co-living properties can be built to meet their needs, not just physically, but also having areas for social interaction.”
• NDIS – Through the National Disability Insurance Scheme, properties that meet the specification to house individuals with disabilities are entitled to the benefits from the federal government. Co-living properties can be designed specifically for this purpose (i.e. wheelchair ramps, wider doorways, railings in showers), and will always have a waitlist of available tenants.

APFG Co-living Investment Options

As with any investment property, the earlier you enter the market the better your returns will be in the long run. The demand for these purpose-built properties will continue to grow, as the current rental market becomes more unaffordable for single tenants. Talk to the team at APFG about our options for co-living properties, the locations, and our property management services.