Co-living Rental Insights from Local Property Managers

We spoke with four co-living property managers to gather valuable insights into co-living spaces, and we're excited to share what we've learned with you.

Here are the agencies we consulted:

1. First Nationals (Perth, WA): Operating since 1981, they’ve built significant expertise in Perth’s shared accommodation market. We spoke to Sarah, who provides rental appraisals for co-living properties.
   
2. Rentwest Solutions (WA): The largest property management firm in WA, known for their exceptional expertise in the rental market.
   
3. Elevate Co-living (WA, VIC): A boutique co-living property management business, founded by a former property manager of the country’s largest co-living management firm.
   
4. Gallery Real Estate (QLD): Holds a 50% market share of co-living homes in Southeast Queensland.
   
5. Certainty Property (Australia-wide): One of the country’s largest rooming house management firms, renowned for mastering this niche and their stellar industry reputation.
   

We’re committed to ensuring every deal our clients sign is a resounding success. Consulting directly with property managers who are on the ground, managing these homes and tenants, is incredibly valuable.

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Let’s dive in!

Below are the summarised responses to our key questions, crafted for clarity using ChatGPT. However, I’m happy to share the full interview transcripts and provide you with the contact details of these experts so you can connect and address any burning questions directly.

1. How confident are you as a property manager that Co-living will go for rent pretty quick?

Finding tenants isn’t challenging at all, but some locations perform better than others. The key is setting a rental rate that market likes and benefits both tenants and landlords.

A room with features like a secure room, attached bathroom, and functioning seperate air conditioning stands out as a premium option in the market. Many available rooms lack attached bathrooms yet still rent out quickly.

Additionally, tenant awareness of purpose-built co-living spaces has grown. More tenants are leaving subpar accommodations in favor of these thoughtfully designed living environments.

2. Are they short term tenants? Do we get vacancies quite often?

All the agents have said they do minimum 6 months rental agreement, unless owner advice otherwise. Average tenancy period is between 12 to 18 months.

The best thing is - since all the tenants do not vacate at the same time, the cashflow is uninterrupted due to multiple income streams.

Occupancy rates generally remain high, averaging between 95% and 98% annually in most cases

3. Are there any specific regions or areas you think it would work better - closer to CBD, airport, shopping ?

While location matters, the appeal of the rooms themselves is even more important. Features like secure locks, full furnishings, ensuites, space for a work-from-home desk, and air conditioning are increasingly in demand.

Proximity to micro or macro employment hubs offers a significant advantage, and many tenants also value being in communities with great amenities and a pleasant atmosphere.

4. What about resale value? Does it sell easily?

Investors are willing to pay a premium for this! Rooming houses have been successfully operating for decades, with resale data readily available in Queensland and regional Victoria, showing strong performance.

While this concept is relatively new to Western Australia, any that hit the market are likely to be quickly snapped up, particularly by SMSF buyers who find them highly appealing.

Additionally, most co-living designs attract mature families, especially those with young adults, making them a versatile and desirable investment.

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5. Are tenants dodgy or unreliable?

Absolutely not. We have a rigorous screening process, including personality assessments, to ensure only the most suitable tenants are approved. This involves thorough reference checks, employment verification, tenancy history reviews, and interviews before presenting candidates to you.

It's in our best interest to ensure tenants are compatible, take care of the property, and pay rent on time.

Tenants typically include young professionals, corporate employees, tradespeople, hospital staff, single mothers—everyday people. A visit to Flatmates.com.au can provide insights into the types of individuals seeking this kind of accommodation.

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6. What about conflicts about tenants? How is that managed?

There are more friendships made than conflicts.

Many tenants may not be living with family, in a relationship, or have a large social circle, so having someone to greet after a long workday can be a meaningful connection. They truly appreciate the sense of community and family that this living arrangement fosters.

Of course, disagreements can naturally occur in shared living situations. To minimize these, we implement measures like clear house rules, individual bathrooms for each tenant, and all-inclusive bills. Additionally, we offer a platform that facilitates communication and allows us to mediate and quickly resolve any issues that may arise.

7. How to find and Vet tenants?

The primary marketing channels for these homes include Flatmates.com.au, REA, Domain, Facebook Marketplace, and partnerships with local employment hubs, hospitals, universities, and shopping centers that assist their staff with accommodation.

Our tenant selection process is thorough, involving personality assessments, reference checks, employer verification, interviews with family members, a review of past tenancy history, and a personal interview. Landlords also have a say in approving tenants, ensuring the right fit for their property.

Thanks for reading this far.

If you have any questions for the Property Manager, feel free to respond to this email. Alternatively, I can arrange a call with one of the co-living property managers to get some insights on the local market.

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