Recently, various forms of communal housing such as shared houses and social apartments have become commonplace, and ``co-living houses'' are also a new type of communal housing.

This time, we will introduce the advantages and disadvantages of co-living houses from a tenant's perspective and an investor's perspective.

What is co-living house?

A co-living house is a shared residence that combines compact private living units with shared kitchen, living and dining facilities, as well as a working space.
In addition to having shared facilities that emphasize the sense of community among residents, similar to social apartments, we also have shared co-working spaces and work booths, allowing you to complete your work within the shared residence.

After the coronavirus pandemic, people have had more opportunities to work from home, and as a result, the way buildings are used has changed, with an increase in co-working spaces and the addition of work rooms to the floor plans of pre-built homes.
In this trend, co-living houses can be said to be a type of communal housing that suits the current times.

Advantages of co-living house residents

Most of the residents of co-living houses are young people in their 20s and 30s, and the ratio of men to women is almost 50-50.
Rent settings targeted at these tenants, as well as a variety of facilities and services, are winning the hearts of the younger generation who value value for money.

Rent and move-in costs are low

Rent and move-in costs for co-living houses are lower than for regular apartments and condominiums.
Even in the Tokyo metropolitan area, you can find a room for as little as 50,000 yen, and there is no need for deposits or key money when moving in.
In some cases, you may have to pay a contract deposit, but it is still much cheaper than paying a security deposit or key money.

Most of the rooms are compact at 10 to 15 square meters, but considering that there is ample shared space and co-working space, it's a pretty good deal.
Another good point is that the units are equipped with the minimum amount of lighting and furniture.

Plenty of shared facilities

In order to create a space where you can relax and concentrate on work at the same time, co-living houses have quite unique common facilities.
For example, some have common facilities such as a fitness gym, theater room, and individual meeting spaces that are only found in large luxury condominiums, while others have full-fledged coworking spaces equipped with monitors and multifunction devices for presentations. There are some places where there are.

Some co-living houses also offer a variety of services that differentiate them from other properties. These services go beyond the traditional concept of shared housing, such as cleaning services, organic vegetable delivery, and a flat-rate subscription service that allows you to stay in a co-living house across the country.

Community in shared spaces

Many people would like to move into a co-living house for the purpose of communicating with each other in the shared space.
In addition to community events, some companies also hold seminar events related to work.
Also, it seems that many foreigners use these services, probably because many of them have short contract periods.

Disadvantages of co-living house tenants

Coliving houses have the advantage of being able to set lower rents than regular apartments and condominiums by sharing parts that are costly. There is no denying that there are certain inconveniences that come from being shared.
Additionally, since work and home are located close together (integrated), this type of housing is not suitable for people who want to keep work and private life separate.

Water facilities are in a shared space

If you feel inconvenienced in the common areas, it would be the water-related facilities such as baths and toilets.
Some properties have toilets and unit baths in each unit, but many have unit baths, showers, and toilets in common areas.
Women in particular are reluctant to share baths and showers, so some baths and shower facilities are set up exclusively for women.

The boundaries between work and private life become blurred

Since there is a co-working space within the facility, you can complete your life and work inside the co-living house.
This not only blurs the line between work and private life, but also creates the possibility of estranged connections with people outside of the resident community.

Perhaps because the co-living house is so comfortable, some residents tend to be reluctant to go outside.
For this reason, many people consciously go out and create opportunities to interact with the outside world.

Advantages of co-living house investment

If you look at co-living houses as an investment target, you will notice that the way they are operated is similar to senior living rooms, student dormitories, and dormitories. If you have these investment experiences, you will be able to comfortably invest in co-living houses.

Stable income from the operator's master lease

We will conclude a master lease agreement with the co-living house operator in the form of renting the entire building.
Therefore, in many cases, a fixed amount of rent is paid each month regardless of whether new tenants are recruited or move out.
For owners, it can be said that real estate investment is easy to make a business plan because stable income can be expected.

Easy to differentiate from other apartment complexes

Co-living houses are characterized by the provision of cleaning of common areas, events, and special services, which are managed and operated by the operator.
By considering what kind of facilities and services to provide to your target group, you can relatively easily differentiate your property from other apartment complexes.

Disadvantages of co-living house investment

The purpose of co-living house tenants is clear to some extent, so it is easier to target them, but on the other hand, the market is smaller than that of regular housing. It will be necessary to respond flexibly to changes in the times and customer preferences.

Additionally, since the building's design and equipment are designed with the operations of the operating company in mind, it is difficult to change operating companies.

Target group is narrowed down

The main target group for co-living houses is young people who want a simple living space but a luxurious shared and working space, as well as a sense of community.
Because it is necessary to consider facilities and services that appeal to a narrower demographic than general housing, more detailed marketing research is required.
The contents of facilities will naturally differ between downtown areas and residential areas in the metropolitan area.

Difficult to change operating company

Just like when investing in senior living or student dormitories, it is difficult to change the operating company, so you need to carefully examine the creditworthiness of the operating company before investing. Since this is a somewhat long-term investment, you should check in advance whether the management company will take good care of you, including its financial strength and reputation.

Additionally, the fact that it is difficult to change operating companies means that it is also difficult to expect an upside in terms of rent. Therefore, it is wise to make a financial plan that includes sufficient funds to cover equipment renewal and repair costs.

Co-living house is a communal housing that is in line with the times.

As times change, the way we think about housing is also changing. The lifestyle of living in a fixed location and commuting every day on a crowded train is also being reconsidered due to the coronavirus pandemic.

Co-living houses originated in the United Kingdom and the United States about 10 years ago, but perhaps the times have caught up with new ways of thinking, and they are starting to be accepted by the younger generation in Japan as well.
It may be the ideal home for modern people who do not choose where they live or work.