Our Co-living series:
- Part 1: Co-living – A Fresh Take on Shared Housing
- Part 2: Co-living Excels in Solving the Problems of the Modern Tenant
- Part 3: The Digital Nomad – A New Type Of Tenant
- Part 4: The Business Opportunity of Co-living
- Part 5: How Co-living Uses Economy of Scale to Generate Profit
The traditional living arrangements don’t really meet these new needs that the digital nomad has about their home.
The landlords among you will instantly realise that digital nomads won’t make good long term renters. They can be instantaneous about changes in their lives and this resonates terribly with a fixed term tenancy agreements and property hunting, which can take months for the right property.
Although HMOs come close to the living arrangement in co-living buildings, it falls short of providing that delightful communal experience and can instead be very frustrating for the tenants, especially when they need to get along and share the house chores.
The real estate agents must also know by now that these persons will never think of buying a house, any time soon. Eventually most settle down and have families, but that happens later in life and if the economic conditions allow it. Getting on the property ladder is beyond the reach of many people.
The hoteliers should note that digital nomads prefer to spend their money on experiences rather than luxurious bedsheets and fancy furniture. Most nomads operate on a minimum expenses model, leaving as much money available to enjoy life and create happy moments.
Hostel owners can relate best to the needs and desires of digital nomads. They offer both the flexibility, cost efficiency and communal aspects that this demographic needs. However, not having a personal space where you can be alone with yourself can sometimes be frustrating…and smelly.. (The author has slept for months in a room with 12 more people and their dirty laundry.)
Until recently, digital nomads did not have the optimal living experience that resonates with their life goals.
The opportunity that co-living provides is to create a modern housing option for a growing demographic which is ready to pay MORE as long as you solve key problems with their home.
Digital nomads are well paying customers
Digital nomads thrive on the IT sector’s profitability and growth. There is an ever increasing demand for IT professionals in virtually every discipline. Graduates out of university start off their first jobs with around £30,000 annual salary, which is the national median for 2016. Needless to say this only goes up.
So, right off the bat we can see that this tenant has enough income to support themselves and afford a higher quality of accommodation and life.
People who work at home also save a lot on a range of expenses – transport, food, impulsive purchases. The latter two are impossible to gauge as these spendings are unique to any person. However, an annual London travelcard costs between £1320 and £2408 depending on coverage and that’s if you purchase the whole annual package.
With digital nomads, home and office is the same. As they spend more than half their 24/7 in the same building, they are naturally inclined to invest more and make sure it’s comfortable, cosy and inspiring place to be in.
Digital nomads know the price of quality (usually) and are ready to pay more to get better quality – that counts double for the quality of their home.
Happy tenants make cheap tenants
Every person who ever worked in any type of housing industry will know that an unhappy resident is a costly one. If your tenant is unhappy in your property they will care little about it’s condition.
This means less investment; negligent attitude towards the condition of the property; virtually no day to day maintenance, except some cleaning; more prone to damage and cause mayhem. Over time, this behaviour will cause the property to deteriorate faster than it normally would, which is very expensive for the landlord and can diminish all profit made for the duration.
Matching price and quality of life makes the property attractive
The biggest friction point in the renting industry in the UK right now is that properties are horribly overpriced, pushing renters budget to the absolute breaking point, while at the same time, the living conditions are nowhere near stellar.
Electricals keep breaking all the time, but repairs are slow and painful as landlords want to avoid costs as much as possible.
Outdated constructions are highly inefficient with energy consumption. In the winter properties are cold and the cost of heating is huge. In addition bad insulation causes damp and mould problems, which create further hazard.
At the low end of the price spectrum, these problems grow worse and some tenants are forced to endure unlivable conditions for months and even years.
Co-living buildings are modern and employ construction technologies that make them efficient and cheap to live in. All the interior, furniture and electrical appliances are freshly installed and are unlikely to break down as often. When that does happen, there are stationed building managers that tenants can go to in person and ask for assistance.
Tenants can access leisure and entertainment activities at all times. All the benefits and perks we listed in [link the article] are available to all tenants at all times.
If tenants were to get them through different providers and shops, they would have to pay a lot more money than it costs YOU to build it in the property.
Our Co-living series: