Build-to-Rent is fast becoming the de facto choice for renters when it comes to finding a new home. And the sector isn't rooted to just one type of place to live either, with renters having the option of full-apartment living and Co-Living.
If you're thinking of investing in Build-to-Rent, you might wonder whether you should go for a traditional building with social spaces or plump for the Co-Living option. Which one will provide the best return on investment?
That's where we come in, and in this article, we're looking at the differences between Build-to-Rent and Co-Living. So read on and discover everything you need to know about these two renter-only living options and how they can work for you.
What are the primary differences between Build-to-Rent and Co-Living?
Just in case you didn't know already, the primary differences between a traditional Build-to-Rent setup and Co-Living spaces centres around the homes. Traditional Build-to-Rent tends to offer renters a full apartment, which includes a reception room, kitchen, bedroom and bathroom.
Co-Living, on the other hand, is more like a hotel experience, offering renters a private bedroom and bathroom while sharing the other spaces such as the kitchen and lounge areas. Both of them focus on social spaces, but you could argue that Co-Living goes one step further.
Tenancies vary, too – though both usually provide flexible living options. Traditional Build-to-Rent typically offers tenancies between 12 months and three years, though lengths can vary. With Co-Living, however, residents can usually stay anywhere between one night and 12 months, depending on the Co-Living operator. If you were to invest in one of these spaces, it's probably best practice to go down a similar route, as the tenancies on offer are in line with what renters really want.
Pros and cons of Build-to-Rent
The primary benefit of traditional Built-to-Rent is the full homes on offer. Many renters aren't necessarily interested in moving into studio-like apartments and want to live somewhere that is a whole home – especially if they're looking for somewhere to live long term.
There's also a strong emphasis on the community, with many Build-to-Rent setups providing five-star amenities like gyms, lounges, roof terraces, co-working areas and more. Renters can buy into the lifestyle with stylish apartments that feature all the trimmings and social spaces designed to bring people closer together.
It's hard to find fault with the traditional Build-to-Rent setup, especially as these homes have been constructed with renters in mind. However, from an investment point of view, they are likely to be more expensive if you're building one from the ground up.
You are building full apartments, which is likely to be a higher outlay than if you were building rooms with fewer kitchens. Of course, this means that rents are higher in Build-to-Rent buildings, which can work as a pro and a con. More expensive rents lend themselves to a higher markup. Yet, it could potentially price some renters out of the market.
Pros and cons of Co-Living
Whereas Build-to-Rent places a greater focus on renters who are looking to stay for the long term, Co-Living is more flexible in its approach. It's not uncommon to see tenancies lasting for just a month, giving renters more freedom to move around as they please.
Such flexibility holds plenty of appeal with an section of renters, and the hotel-style rooms offer a more lavish lifestyle than your typical short-term rental. Social spaces are an essential part of Co-Living, especially as renters share more than they do in a traditional setup.
While renting a room is traditionally cheaper – therefore likely to hold more appeal with renters – some people moving home may be put off the idea of only having a bedroom and bathroom. If you're thinking of investing in a Co-Living space, it's even more important that you research your target market.
However, if you find an area in somewhere like London or Manchester, there's bound to be more appeal. Cities can be hectic in their nature and afford the type of lifestyle that appeals to those looking for shorter stays and more flexible, community-led living.
Traditional Build-to-Rent or Co-Living space?
There really isn't much to choose from between a traditional Build-to-Rent setup and a Co-Living space. As long as you factor in things like demographics, neighbourhood and lifestyle, then either a Build-to-Rent or Co-Living option should turn out to be a solid investment.
If you'd like to know more, check out our hub, which is full of content on Build-to-Rent and Co-Living homes. You can also pop us a message and learn more about how Movebubble helps Build-to-Rent and Co-Living operators attract high-calibre renters.