Several startups and real estate owners are jumping into the apartment-sharing business, where they rent out individual rooms instead of entire apartments, The Wall Street Journal reports.
For example, Property Markets Group, through its PMGx division, started offering the “co-living” option in one of its Chicago buildings. The company plans to develop more buildings designed for co-living and expand the offerings to more than 7,000 beds in 3,500 apartments over the next few years.
The co-living units are often being marketed to millennials.
“Everyone is trying to wrap their arms around new living concepts for millennials,” Ryan Shear, a principal with Property Markets Group, told The Wall Street Journal.
The one-room rentals can be cheaper for renters than renting the entire apartment. For example, PMGx tenants pay as low as $1,000 a month to rent a room than the entire apartment. Renting an apartment in Chicago, Miami, or other major cities often costs double that.
“If you’re 22 years old, and you just got your first job out of college, you’re looking for the cheapest point of entry in a market,” Shear says. “All you want is a room.”
Developers say co-living apartments will cost more to build than other apartments, however. Each room will have a separate bathroom. Many of the units will also come partially furnished with built-out closets and TVs, The Wall Street Journal reports.
However, developers are attracted to the idea that they can charge more for a co-living unit, collecting rent from multiple tenants, than if they rented the space to just one tenant.
Source: “Big Developers Roll Out Co-Living Units to Woo Millennials,” The Wall Street Journal (May 16, 2017) [Log-in required.]