With co-living and co-working on the rise, these will make certain elements of the HMO investment market incredibly crucial moving forward. As community is becoming more important to many people, co-living and co-working are redefining how many people live and work. This is happening not only throughout the UK but across the globe as well.
Some co-living spaces are even starting to provide access to co-working spaces, bringing these two trends and lifestyles together. Here we’ll cover the growing demand for co-living and co-working and what this means for HMO property investors.
The Rise of Co-Living
In recent years, trends in the UK rental market have continued to change and adapt. The co-living portion of the private rented sector, in particular, has been growing for a number of years now. And the HMO market plays an important part in helping fulfill this demand.
Co-living has become more attractive, especially as young professionals are more transient than previous generations and are renting for longer. The average age of co-living tenants has been on the rise. And the lifting of lockdown restrictions in recent months has led to a further boom in demand for co-living rental properties.
One of the most common reasons tenants choose co-living is it tends to be cheaper to rent a house share. And being surrounded by other people at home can help tenants feel less isolated. Shared accommodation also provides flexibility that many young people are prioritising.
To help keep up with what prospective tenants are looking for, HMO property investors and landlords should focus on providing high-quality properties with dedicated ‘community’; spaces that really benefit their tenants.
The Future of Co-Working
The COVID-19 pandemic has dramatically changed the way we work and what many of us want from our job. Earlier in the year, flat-sharing site SpareRoom conducted research on the future of working and what young people are looking for in their jobs.
The survey of 18 to 40-year-olds revealed nearly half would consider quitting their job if their employer doesn’t allow remote working following the pandemic. This shows that spending five times a week in the office has become unappealing for many.
With fully remote working and hybrid working models becoming more common, co-working is a great option for many professionals and businesses looking for community and flexibility. This can provide young professionals a modern place to work.
Because of the growing trend towards co-working spaces, more privately rented properties are providing office space and co-working spaces within their properties. If your target tenant is young professionals, it’s important to consider how they will work in the property.
What This Means for HMO Property Investors
With the rise in demand for co-living and co-working, HMO property investors need to make some crucial considerations. Here are a few tips to help you invest (or upgrade) during this new, community-driven era.
1. Adapt to These Changing Trends
HMO property investors need to adapt to the changing trends and behaviours of their prospective tenants. It’s key to provide amenities that suit modern living and what your tenants want from their rental home – this includes students.
With a continuing trend towards community and as many people are spending more time at home, investors need to focus on creating high-quality spaces that fit these lifestyle changes and making a community feel within their properties. Consider the layout and features included in the communal spaces and bedrooms of your HMOs.
2. Rethink Your Current HMO Portfolio
To provide tenants the space they want and need, you may need to rethink your current HMO properties to mesh with the way young people want to live and work. For starters, investing in superfast broadband is now a necessity if you provide bills included package. Tenants won’t stand for slow connections anymore, especially as they need to be able to easily work and study from home.
Moving forward, HMO property investors renting their properties to young professionals will likely need to create high-quality office or study space in their HMOs. You may even want to consider co-working spaces and how they can be incorporated into your properties creatively.
3. Get Ahead of the Competition
Creating separate areas where tenants can study, work or conduct meetings could be particularly important for HMOs in the future and could even allow you to get ahead of the competition. These are the kinds of features that can sell prospective tenants on a property before they even view it.
It’s important for HMO property investors to consider how tenants want to live and work during this era of co-living and co-working. This will help you better “future proof” your property investments and can make your portfolio successful and sustainable for years to come.
For access to the latest insights and advice on the HMO industry, become a member of The HMO Roadmap now!
About the Author:
Andy Graham is the founder and the lead trainer at The HMO Roadmap! He is also the co-founder of The HMO Mastermind and Smart Property, a specialist HMO property investment and management company. He writes as a regular columnist in different magazines about a variety of HMO topics and is the host of The HMO Podcast! Follow Andy on Instagram!