The Rise of Co-Living Spaces in the Philippines: A New Real Estate Investment Trend
Co-living spaces are the latest real estate investment trend in the Philippines. The rise of co-living spaces reflects how Filipinos are changing lifestyles and priorities, which are driven by rising urbanization and population growth, affordability challenges, and changing work culture.
These spaces offer investors higher occupancy rates and steady rental income as well as lower maintenance costs compared to traditional residential properties. However, there are a number of considerations investors should take into account before venturing into this new investment opportunity.
Co-living spaces are a new trend in real estate that allows people to live together and share common facilities, such as kitchens and bathrooms. The idea is to make it easier for people who are just starting out in the city or those who want to save money on rent by sharing a home with others. These have been popularized in other parts of Asia, like Hong Kong and Singapore.
In this article, we’ll go over what co-living spaces are exactly, how they emerged in our country’s real estate market, and why investors should take note of this growing trend.
Factors Driving the Demand for Co-Living Spaces
The Philippines is in the midst of urbanization and population growth. As more people move to urban areas, they are looking for new ways to live their lives. This has led to a shift in priorities and lifestyles, which has resulted in increased demand for co-living spaces.
Urbanization and Population Growth
The Philippines is currently experiencing an economic boom, with its GDP growing at a rate of 6% annually. As a result of this growth, there has been a large migration from rural areas to cities in search of job opportunities. However, the limited space and housing options available in these urban centers have made it difficult for individuals to find affordable places to live. This has led many residents to seek out co-living spaces as an alternative option for their daily needs.
Affordability
Co-living spaces are much more affordable than traditional rentals. You will be sharing amenities and resources with other people, so you can save on the cost of having your own kitchen or bathroom. For example, if you share a room with three others in a co-living space, each person only needs to pay 1/4 of what they would pay for their own apartment.
In addition to being affordable for tenants, co-living spaces are also profitable for investors because there is less risk involved compared to investing in individual units of a real estate property (such as condominiums).
Changing Lifestyles and Priorities
The rise of co-living spaces in the Philippines is a reflection of changing lifestyles and priorities among millennials and Gen Z. As these demographics become more influential in society, they will continue to reshape trends in real estate investments.
According to reports 69% of Millennials (those born between 1981-1996) prefer flexibility over stability when looking for jobs or careers–a trend that may be driven by their desire for community and social connections. This preference for flexibility also applies to living arrangements.
Traffic and Commute Challenges
Living close to work can save you time and money.
If you live near your place of employment, you’ll have less of a commute, which means more time for yourself and less stress from traffic jams or public transportation delays. This also gives you access to key establishments like grocery stores or malls that might not be as easily accessible if you lived farther away from them.
Benefits of Real Estate Investing in Co-Living Spaces
Co-living spaces are a good fit for a real estate investor who wants to diversify their real estate and investment property portfolio. They can also be an attractive investment because of the steady rental property income they generate and their higher occupancy rates.
In addition, co-living spaces typically have lower maintenance costs than traditional apartments or condominiums. This is particularly true in new developments where you don’t have to worry about fixing existing infrastructure or maintaining existing amenities like swimming pools and gyms, which require constant upkeep and repair work.
Higher Occupancy Rates
Co-living spaces are attracting young professionals and students who are seeking affordable and convenient housing options. These properties have high occupancy rates, with some reaching over 90%.
This may be due to the fact that co-living spaces offer amenities not typically found in traditional condominiums or apartments. The most common amenities include gym facilities, swimming pools, lounge areas, and rooftop gardens. Co-living units can also come equipped with washers/dryers depending on their size (smaller units tend not to have these features).
Steady Rental Income
The steady rental income is the most attractive feature of co-living spaces. The monthly rental fees, which can range from P15,000 to P30,000 depending on location and amenities offered by the property manager, are guaranteed by long term leases that are typically years in length. Additional charges for amenities and services make up the bulk of this amount; they vary depending on what you choose to pay for.
Potential tenants include professionals who work in Makati or Ortigas but live outside these areas due to their more affordable housing options; young couples who have moved back home after graduating college; families looking for cheaper alternatives than condominiums or townhouses; retirees with savings they want to invest while staying active socially through living with other people their age.
Lower Maintenance Costs
Co-living spaces allow you to share the responsibility of maintaining the property with your fellow residents. This is particularly useful in the Philippines, where many people do not have enough money to pay for repairs and maintenance on their own. In addition, co-living spaces can take advantage of economies of scale when it comes to utility providers and service providers, which means that they’ll be able to provide better services at lower costs than individual homeowners would be able to get them on their own.
Diversification of Real Estate Portfolio
Co-living spaces are a way for real estate investors to diversify their portfolios, while also taking advantage of an emerging real estate properties trend.
The rise of co-living spaces means that there are now more options for real estate investors who want to invest in this emerging market. As such, it’s important for developers and property managers to understand how these new developments can be incorporated into existing portfolio strategies so as not only to maximize returns but also minimize risk.
Challenges and Considerations for Real Estate Investors
The rise of co-living spaces in the Philippines has attracted a lot of interest from investors. However, there are some challenges and considerations that investors should keep in mind before they invest in this new real estate investment trend.
First, competition is likely to be high because there are now several companies offering co-living spaces across Metro Manila and other major cities in the country. This means there’s less room for returns on investment compared with traditional residential properties such as condos or houses where demand tends to be higher than supply (and thus increases value).
Competition
Competition is likely to be high because there are now several companies offering co-living spaces and residential real estate across Metro Manila and other major cities in the country listed on different online real estate platforms. This means there’s less room for returns on investment compared with traditional residential properties such as condos or houses where demand tends to be higher than supply (and thus increases value).
Tenant Management
A crucial aspect of investing in co-living spaces is effective tenant management. This involves establishing clear house rules and guidelines to maintain order and promote a positive living experience for all residents. Additionally, it is essential to address any conflicts that may arise promptly and fairly, ensuring a harmonious living environment where everyone feels respected and valued. By fostering a strong sense of community and open communication, you can create a co-living space that is both enjoyable and successful for both tenants and investors.
Legal and Regulatory Compliance
You should also be aware of other legal and regulatory compliance issues that may arise when you’re planning to build a co-living space. For example, if your property is located within a certain distance from an airport or military base, you will need permission from the government before proceeding with its development. You should also make sure that your design conforms with local zoning laws and building regulations so as not to run into problems later on down the line.
Strategies for Successful Co-Living Space Investments
A successful co-living space investment is not just about acquiring land and building a structure. It also requires careful planning and the right strategy can make all the difference between success and failure. Here are some tips for investors looking to get into this emerging real estate trend:
Location
The location of a co-living space is just as important as the building itself. You’ll want to consider proximity to business districts, schools, and transportation hubs. This will help you decide whether or not the location is convenient for your tenants’ daily commute. You’ll also want to look into safety factors like police patrols, security cameras, and street lights in the area.
A neighborhood’s amenities are another important consideration when choosing a property location–especially if you plan on renting out units with kitchens or common areas where residents can cook meals. It should be near other properties like a commercial real estate area. A bustling coffee shop nearby makes it easy for tenants who enjoy getting their caffeine fix on their way home from work; likewise, being close enough that they can walk there rather than drive.
Design and Functionality
Co-living spaces are designed to create comfortable and efficient living spaces. They incorporate shared amenities and common areas, which allow residents to enjoy the company of their neighbors while also having the privacy and independence needed for optimal productivity.
The designs of co-living spaces often include a common kitchen area, where residents can cook meals together; laundry facilities; a lounge or study room; an outdoor patio or balcony space that allows for socialization outside of the individual units; an events room or podium where groups can gather for parties or meetings; bike storage racks (for those who want to bike around town); pet-friendly features if you’re one who likes animals.
Marketing and Tenant Attraction
In order to ensure that your project is successful, you need to consider how you are going to market and attract tenants.
The first step is targeting the right demographic: millennials, who tend to be tech-savvy, have higher education levels than previous generations, and can afford higher rents due to their high salaries. Second, is utilizing online platforms like Facebook and Instagram for promotion purposes (visual content works best). Thirdly–and most importantly–you need an attractive location for your property that provides value for money for potential renters (especially when compared with other similar properties nearby).
Building a Sense of Community
Co-living spaces are not just a place to live; they’re also a way to build a sense of community. Community events, activities, and even work opportunities help tenants get to know each other better and make the most out of their shared living experience.
For example, one co-living space organizes monthly movie nights where tenants can watch movies together in the building’s communal lounge area. Furthermore, some co-living spaces also organize game nights or even cooking classes for residents who want to learn new skills from each other or share their expertise with others.
The rise of co-living spaces demonstrates how technology and trends are changing the way people live and work. While it may not be right for everyone, co-living can be an attractive option for many individuals who want to reduce their expenses without sacrificing comfort or privacy.
As urbanization and population growth continue to increase at an exponential rate, so will the demand for affordable housing options for real estate developers. Co-living spaces can be a good investment for anyone looking to diversify their real estate portfolio in order to hedge against inflationary pressures on traditional rental properties such as apartments or condominium units.
