Co-Living: An Overview of the Yield Concept

Co-living is a modern form of housing where people temporarily live in shared, fully equipped spaces. This concept offers affordable housing in urban areas while simultaneously fostering a sense of community.

The most important points at a glance

• Co-living provides a flexible and cost-effective housing solution, particularly attractive to young professionals and students in urban areas.

• The development of co-living shows that this form of housing is gaining increasing significance.

• Demand is growing as it promotes a sense of community and offers an uncomplicated rental structure.

• For investors, co-living represents a lucrative opportunity with stable returns.

What is co-living? - Future-oriented living

Co-living is a communal and temporary living arrangement in modernly furnished buildings, regarded as an innovative housing solution. Residents receive their own furnished room and share communal spaces such as kitchens, bathrooms, and coworking areas. This concept fosters a sense of community and facilitates access to housing in urban areas.

Moving in and out of co-living is straightforward and resembles a stay in a hotel. This flexibility makes co-living particularly attractive for individuals who frequently relocate or wish to live temporarily in a city. In times of overcrowded cities and rising rental prices, co-living offers an affordable and convenient alternative.

Moreover, co-living has the potential to sustainably influence urban lifestyles by making housing more affordable and communal. The combination of a private retreat and communal living makes this form of housing particularly appealing and forward-looking.

The history and development of co-living

The concept of co-living emerged in the early 2010s and has quickly adapted to various lifestyles since then. Originally conceived as a solution for the scarce housing in urban centers, co-living has established itself particularly in cities with high rental prices and limited housing supply.

Co-living models have been developed to meet the diverse needs of the younger generations Y and Z. These groups are seeking flexible and communal living arrangements that support their dynamic lifestyles. International residents in co-living environments benefit from furnished and flexible rental options that enable them to adapt quickly and easily.

This shift towards flexible, communal living arrangements illustrates how co-living has evolved from a niche model to an established form of housing. Demand is continuously growing, indicating that co-living is more than just a temporary trend.

Advantages of co-living

Co-living offers numerousadvantagesthat make it an attractive housing option:

Cost efficiencysince all additional costs are included in the rentFlexibility

as residents can move in quickly and easily adapt to changing life circumstancesPromotion of a sense of communityby allowing residents to engage in shared activities such as cooking and social events

Co-living is particularly interesting for individuals with temporary stays, such as for a work project. It also offers advantages forlandlordssince rental income is higher and security is increased through multiple rental agreements.

Co-living is particularly interesting for individuals with temporary stays, such as for a work project. Also forVermieterCo-living offers advantages as rental income is higher and security is increased through multiple rental agreements.

Challenges and Disadvantages of Co-Living

Despite many advantages, co-living also presents challenges:

For tenants:

· Less privacy due to shared spaces

· Openness and adaptability are required

For landlords:

· More frequent tenant turnover

· Good management is necessary for stable occupancy

These challenges show that co-living is not suitable for everyone. It requires a certain openness and adaptability from the residents to make the most of this form of housing.

Target Groups for Co-Living

Co-living primarily targets the following groups:

·Young professionals & graduateswho wish to live flexibly

·Studentsin cities with a tense housing market

·       Digital nomads & young expatsseeking connection and flexibility

What makes co-living attractive for these groups:

A strong sense of community

Shared spaces & resources (e.g., kitchen, co-working, leisure)

Networking & exchange in everyday life

Co-living primarily appeals to active, urban individuals who want to combine modern living with community.

Co-living as an investment opportunity

The increasing demand for modern living concepts makes co-living particularly attractive for investors.

Advantages:

Higher rental income through furnished spaces & additional offerings

Stable returns with good occupancy rates

Sustainable housing model with a future

Co-living is more than a trend – it is a viable investment opportunity in the urban housing market.

Difference between co-living and shared apartments

Amenities:

Co-living spaces offer modern, fully furnished communal areas – in contrast to often spartan shared apartments.

Flexibility:

No fixed minimum rental periods, uncomplicated move-in and move-out – ideal for mobile professionals.

Legal framework:

Due to the furnished rental, different regulations apply compared to traditional rental agreements.

Co-living and interior design

The interior design in co-living spaces aims to create an inviting atmosphere that supports the well-being of the residents. A well-designed interior can have a significant impact on the well-being and satisfaction of the residents.

The transformation of existing buildings into co-living spaces requires extensive renovations and careful selection of furniture to ensure optimal use of space.

Thoughtful design and careful planning are crucial to creating successful co-living spaces that meet the needs of the residents.

Co-living in Germany

Co-living has evolved from a niche to an integral part of urban housing concepts. The increasing demand for flexible and furnished living space makes it attractive – for residents and investors.

Current developments:

· Growing political support (e.g. for young housing)

· Rent cap usually does not apply to furnished rentals

· High flexibility in rental durations

Challenge:

The housing shortage remains the biggest obstacle to further growth.

The development and promotion of co-living in Germany demonstrates how important this form of housing is for the future of urban living.

What we recommend to investors

Co-living can significantly increase rental yields, especially in large cities. A good location within the city is important for the rental potential and success of a co-living project. The co-living concept depends heavily on the floor plan, which often needs to be adapted to meet the needs of the residents.

Due to the frequent tenant turnover, good property management is essential to manage the fluctuation and ensure the spaces are always well utilized. Through our developer network, we provide access to suitable co-living properties across Germany.

Investors should consider the advantages and challenges of co-living to realize successful and profitable projects.