19 Feb Flexible Living and the Professionally Managed Multifamily Housing Industry
Overview
Thanks for your interest in our blog! If you’re part of the professionally managed multifamily industry and would like to learn more about the new wave in flexible living, you’ve come to the right place. In this blog we are going to unpack:
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- The impact of flexible living on multifamily housing operators in 2020 and beyond.
- The types of rental housing that you should know about.
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- How consumer trends have taken the market to where it is.
- The common thread in all types of flexible living = pre-furnished apartments.
If you’re looking for inspiration to design and furnish your short-term rentals, or any other pre-furnished apartment type in your community, be sure to download our PDF featuring 4 different concepts for 4 of our favorite cities that are hot on the market!
ENTER YOUR EMAIL TO DOWNLOAD NOW!
For custom concepts and pricing based on cities in your portfolio, email us today at hello@model55.com!!!
The Rise of Flexible Living
Welcome to 2020! As providers for the professionally managed multifamily housing industry, our Google News alerts are buzzing with articles about the rise of flexible living. From where I am sitting, it appears that multifamily owners and operators throughout the country are meeting challenges from a new type of competition. In fact, it seems like everywhere I look different types of property management companies are on the rise. From coliving companies like Quarters and Ollie to short-term rental companies like Airbnb and Lyric, there seems to be no shortage of new, innovative providers.
A Welcomed Challenge
However, large multifamily companies are welcoming the challenge with open arms. Despite new competition and government regulations, the rise of flexible living demand has become a huge opportunity for apartment owner and operators. This is because the new players like Lyric and Stay Alfred are renting entire floors of buildings owned and operated by multifamily companies. So, where it was once a challenge to ensure occupancy rates, the burden has been lifted. Additionally, the responsibility traditional property managers have to their end users in those buildings is lifted from the units that non-traditional providers are renting out.
Of course, the next step for multifamily owner/operators will be to develop their own short-term, co and micro living divisions.
If you’re interested in learning more about flexible living and how it impacts the multifamily industry, keep reading….
The Different Types of Renting Options
It’s important to have a baseline understanding of the types of renting options that are out there so that we can dive into the flexible living arena with similar definitions.
Traditional Renting
This is the bread and butter of the professionally managed multifamily industry. For the industry, this means renting out and managing apartment units. The tenants sign long-term leases, which are usually a year or longer. The buildings often include amenities both in and outside of the units. Typical outside-of-unit amenities include fitness centers, coworking spaces and dog park areas. Typical inside-of-unit amenities include full kitchens, bathrooms and in-unit laundry.
Extended Stay
In this type of rental, the lease is shorter than traditional renting. The leases are typically anywhere from one to nine months. Here, tenants are most likely looking for furnished units in a building with a variety of amenities.
Short-term
No lease is required for short-term rentals. Also known as vacation rentals, these are units or houses that can be rented out for one or more nights. Although they can be found in most towns thanks to companies like Airbnb, they are typically in tourist-rich areas of the country. Short-term rentals are perfect for people who want to experience life in a certain area without the heavy costs that are associated with staying in hotels.
Micro-living
In micro-living units common areas are not shared. However, they are much smaller than the average apartment living – this enables operators to maximize the number of units in a building while charging less for rent. This type of offering is perfect for tenants who prefer to live alone and are not searching for a community living experience.
Coliving
In my opinion, this and short-term are the two types of living that multifamily companies will most likely invest time and resources into accommodating within the coming years. Coliving is where tenants choose to live in units with roommates. By sharing common spaces such as living and dining areas, the tenants can pay less for rent. These spaces do have private bed and bathrooms. In coliving, a sense of community is paramount.
If you’re looking for inspiration to design and furnish your short-term rentals, or any other pre-furnished apartment type in your community, be sure to download our PDF featuring 4 different concepts for 4 of our favorite cities that are hot on the market!
ENTER YOUR EMAIL TO DOWNLOAD NOW!
For custom concepts and pricing based on cities in your portfolio, email us today at hello@model55.com!!!
Why Now?
One question that underlies so many of the conversations we have with people in the industry is, why now? Although they may not ask directly, it seems like many people are left wondering where these new companies came from and how they have suddenly shifted the market so drastically.
I recently came across a great report that details the types of flexible living that have emerged, and the major players in each area. It also gives an excellent analysis on how Millennials and Gen Z-ers are shifting the world of apartment living. The report, Survey of the Coliving Landscape, published in May 2019 by Cushman & Wakefield (Managing Director Susan Tjarksen), was hugely helpful in my research on the topic of flexible living, and can be downloaded here:
The State of the Apartment Market
What I learned from Survey of the Coliving Landscape is that the change in how younger generations are living, working and approaching their economic futures are all factors in the new modal of the housing industry.
To summarize, the report claims that due to the increase in student loan debt and the average age of starting a family being pushed back, the need to save for a house has become less of a priority for Americans in their 20’s and 30’s. As a result, renting continues to rise, especially in primary and secondary markets.
The De-stigmatization of City Living
In addition to single family homes decreasing in popularity amongst Millennials and Gen Z-ers, the drive to move out to the suburbs has seemingly fallen to the wayside. According to the report noted above, city living has never been more popular than it is currently. In fact, the report states that the number of 18 to 28-year-olds moving from the city to suburbs has decreased by 40% in the last 20 years! This trend means that in cities throughout the U.S. multifamily construction and development will continue to rise.
Livable Incomes Decrease and Priorities Shift
Perhaps the two most important factors that have shifted how consumers are demanding housing are (1) their priorities (where/ what they want to spend their money on) and (2) the gap in rent vs. living wages. In Survey of the Coliving Landscape the notion that the up-and-coming younger generations are more interested in spending their money on experiences as opposed to things is highlighted.
The Cost of Living Has Changed the Game
Another reason why consumers are shifting from the demand for traditional rental properties to options such as co and micro–living is cost burden. As home ownership has become less attainable, increases in pricing for rental properties has trickled down.
In Summary…
As Millennials and Generation Z-ers continue to expand the rental market, the demand for newer, more affordable ways to rent and live in the city will continue to rise.
Helping Multifamily Providers Offer Pre-Furnished Apartments
So, maybe you’re wondering why I’m writing about this and what it has to do with Model55? Well, as I mentioned before, as partners for the multifamily industry, we keep a close eye on trends and topics that have big impact on our clients. As it happens, this topic also has a huge impact on our business.
In fact, we are uniquely positioned to help our multifamily clients offer pre-furnished short-term and coliving environments. As it turns out, our turnkey model apartment services are also a perfect fit for short-term rentals.
If you’re looking for inspiration to design and furnish your short-term rentals, or any other pre-furnished apartment type in your community, be sure to download our PDF featuring 4 different concepts for 4 of our favorite cities that are hot on the market!
ENTER YOUR EMAIL TO DOWNLOAD NOW!
For custom concepts and pricing based on cities in your portfolio, email us today at hello@model55.com!!!
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