converting apartment buildings to co-living

5 Replies

What is wrong with converting apartment buildings to co-living buildings. You convert living rooms into additional bedrooms and make the overall rent more affordable for people that don't mind sharing a bathroom.

I went and looked at thehubhaus.com here in san jose, and they are rapidly expanding in the San Francisco bay area, with over 100 houses. Starcity.com has converted several downtown SF buildings and has a waiting list in the 1,000s. They are also expanding into Venice Beach in LA.

If you took a 5+ unit apartment and changed it into a co-living building. The maximum bathroom ratio is 4 to 1, so you could convert most living rooms to bedrooms. This would seem to be more profitable than regular rentals. What is wrong with this idea?

You want to consider parking and make sure each room still has smoke alarms, egress, and no dead bolts. Essentially that is what a rooming house is. You may want to quietly ask around as to zoning or other local issues that may come up. You may want to approach it as an air B&b question. If you are renting the unit, make sure the landlord is agreeable to sub-rent.

Yes I have been looking into all those things for Portland, San Jose and San Francisco. The parking and maximum unrelated people is different in each location. Some cities like San Jose don't have a group housing regulation, 

but in SF it is 5 unrelated and Portland it is 6 unrelated, unless you get a permit for group living.

There are about 10 co-living companies in this area.

check out thehubhaus.com and starcity.com as 2 big ones

also the Forge in portland is run by Opendoor which is based in Oakland CA, 

http://opendoor.io/the-forge/

But do you think that overall it is a good idea? 

Can  you get permit services to help you with these questions?

Originally posted by @Haseeb Awan :

Have any of you calculated the increase in rent yield ?

I did some math on one in Toronto and it came out to about just 5% on the gross for fully occupied rooms. I did not account for vacancy and expenses.. and this was on a 4 bedroom detached. 

It appears this space will thrive in higher tier cities with low cap rates and expensive rent. I don't see the returns to be much more than the going cap rate as these cities are more appreciation driven than cash flow. 

But if your vision is long term this will work..