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As the real estate market continues to evolve, savvy investors are finding fresh ways to maximize returns while meeting the changing demands of tenants. One such innovative approach is co-living—an increasingly popular solution offering affordable, community-oriented living spaces. Grant Shipman, an expert in this field, has not only successfully navigated the co-living market but has also fine-tuned a system that appeals to both investors and tenants alike. Let’s delve into the key aspects of co-living and explore how this model can offer lucrative opportunities for real estate investors.
In today’s competitive real estate market, finding motivated seller leads is crucial for investors looking to close deals quickly and profitably. One innovative strategy that’s proving to be a game-changer in securing these leads is the co-living model. By offering affordable, community-oriented housing solutions, investors like Grant Shipman are not only filling a growing demand but also tapping into a consistent stream of motivated sellers eager to offload properties suitable for co-living conversions. This approach provides the perfect blend of high returns and motivated sellers ready to engage, creating a unique opportunity for savvy real estate investors.
What is Co-Living and Why Does It Work?
Co-living is a modern housing concept that involves renting out individual rooms within a single-family home to multiple unrelated adults. This allows people to live more affordably while sharing communal spaces like kitchens, living rooms, and bathrooms. Co-living appeals to a wide range of tenants—think teachers, engineers, HVAC technicians, and even college professors—who prefer the community feel of shared living without the traditional hassles of renting.
Grant stumbled into this space almost by accident but soon realized its immense potential. His experience living in intentional communities for over two decades, combined with his passion for real estate, allowed him to refine the co-living model into a profitable business venture. By renting rooms in a way that fosters community and responsibility among tenants, co-living properties tend to be cleaner, quieter, and better maintained over time.
Why Co-Living is a Win-Win for Investors and Tenants
One of the major advantages of co-living from an investor’s perspective is the steady cash flow. Unlike traditional single-family rentals, where a vacant property results in zero income, co-living properties allow for multiple income streams. For example, a five-bedroom house could be modified to include additional bedrooms, increasing the potential rental income. A property like this, fully occupied, could generate between $5,600 to $6,300 per month with relatively minimal expenses compared to multifamily properties.
Moreover, tenants in co-living spaces tend to stay longer—Grant’s properties boast a remarkable 97% occupancy rate, even during economic downturns like the COVID-19 pandemic. With an average tenancy of over two years, property managers enjoy less turnover and fewer vacancies, further increasing profitability.
For tenants, co-living offers an attractive proposition. They get to live in large, well-maintained homes in desirable neighborhoods for the price of renting a single room. In contrast to traditional renting situations, co-living often provides tenants with a sense of ownership and community. Everyone has a role, whether it’s maintaining the lawn, cleaning communal areas, or simply respecting the space. With a chore board system in place and open communication, these homes essentially run themselves, creating a harmonious living environment for everyone involved.
Building a Thriving Co-Living Household
One of the keys to a successful co-living property is building what Grant calls a "complete household system." This system includes everything from chore boards to storage solutions, ensuring the house runs smoothly without constant intervention from a property manager. Each tenant has assigned chores, and responsibilities rotate weekly. For example, one week someone may be in charge of maintaining the lawn, while another week, they’ll handle the cleaning of shared spaces.
Grant’s properties are not just functional—they foster a sense of community. Upon moving in, tenants are invited to a potluck where they get to know their new housemates, set expectations, and begin to take ownership of their shared home. This community-building approach is crucial because it creates a positive environment where tenants want to stay. They feel invested in their home, often going above and beyond to maintain and improve the property.
Another important aspect is selecting the right house for co-living. It’s essential to choose properties in neighborhoods where multiple cars won’t be an issue and where the house design fits the needs of a co-living setup. For instance, a five-bedroom house with bonus rooms can be easily converted to accommodate eight or nine bedrooms without compromising communal space.
Overcoming Challenges in Co-Living Management
One of the primary concerns new investors might have about co-living is tenant compatibility. How do you ensure that a house with eight or nine people functions harmoniously? Grant’s solution is simple: let the tenants have a say. When a room becomes available, existing tenants are involved in the selection process. This ensures that new tenants will fit into the household dynamic, reducing the risk of conflict.
Additionally, Grant has learned that it’s not necessary to micromanage tenant behavior. By setting up a system that promotes responsibility and respect from the start, many of the usual issues faced by landlords—such as late rent payments or property damage—are avoided. The tenants themselves become invested in maintaining their living environment, often resolving minor issues without the need for outside intervention.
Finally, for investors worried about neighborhood resistance to co-living, Grant suggests that the key is not to hide the co-living setup but to integrate it into the community. When done right, co-living houses are often better maintained than other rental properties in the neighborhood, leading to positive relationships with neighbors.
The Financials: Why Co-Living is a Smart Investment
From a financial perspective, co-living offers attractive returns. By converting a typical single-family home into a multi-tenant property, investors can significantly increase rental income. For example, a property generating $5,600 per month in rental income, with occupancy rates consistently above 95%, can easily outpace the income of a traditional single-family rental.
Moreover, the operational costs are lower than you might expect. One full-time property manager can handle up to 140 leases, and additional help can be sourced from part-time virtual assistants, keeping overhead low. As tenants tend to stay longer in co-living arrangements, turnover costs are minimized, further enhancing the profitability of this investment model.
Ready to Build Your Real Estate Portfolio with Co-Living?
If you’re a real estate investor looking for a way to maximize your returns while offering high-demand housing, co-living is a fantastic option. Grant Shipman has perfected the model, and now he’s offering his expertise to help others succeed. Whether you’re looking to manage co-living properties yourself or want a hands-off approach, there are plenty of opportunities to explore in this growing market.
Start Building Your Real Estate Business Today
Ready to dive into co-living and start generating motivated seller leads? With the rising demand for affordable, community-based housing, co-living is a lucrative way to expand your real estate portfolio. Contact us today to learn how you can get started in this thriving market and set up your properties for long-term success.
