Over the course of the pandemic, many tenants living in multi-family properties found themselves feeling frustrated. After years of watching landlords participate in an “amenities arms race” in an attempt to attract tenants, they found that they no longer had access to these amenities – but they were still paying for those benefits.
Lack of access to property amenities has been a real point of tension between tenants and landlords or property managers over the last year and has led to many complaints from renters.
However, these complaints have also led landlords to consider what changes they might make to their properties as communal spaces open back up. At the top of the list is adding coworking spaces to multifamily properties.
Choosing what renovations to make to rental properties, whether you’re hoping to attract tenants or sell a home, is always a major concern for property owners. Too often, owners sink money into changes with minimal, if any, ROI.
What it costs to make an improvement or change just doesn’t translate to what tenants are willing to pay. This is what makes coworking spaces an interesting option. Trendy, functional, and communal, these spaces are relatively affordable to create and manage, and they respond to a very real demand from tenants.
One of the most important reasons that Houston landlords should consider adding coworking spaces to their multifamily properties’ amenities is an obvious one: the pandemic has changed what “going to work” looks like. Even as offices reopen, most plan to take a hybrid approach to staffing so that at least a portion of employees are remote at any given time. And that means that those employees will need somewhere to work.
While Houston may be a more affordable rental market than average, it’s still typically difficult for renters to find apartments with room for a home office, or even an extra desk and some files. Doing so might mean paying significantly more than tenants can afford – with the alternative being renting a spot in an area coworking space, but those can be pricy, too. The cost of integrating a coworking space into a multifamily property as an amenity the same way that you would a community gym or pool, however, is less expensive for users and a powerful tool for landlords who want to attract tenants.
If you’re a landlord considering adding a coworking space to your property, there are several factors you need to consider.
First, how close is your property to existing coworking spaces? Although these spaces tend to be more affordable than any amenities fees that tenants would incur, if you’re especially close to coworking facilities, you may find that tenants would rather “leave the house” when it’s time to work than stay on site. Given the proliferation of coworking spaces, there’s a chance you’ll find one right around the corner.
Another factor to consider when determining whether you can add coworking facilities to your rental properties is what type of space is available to you. When people evaluate coworking spaces, one of the first things they consider is whether it will be a pleasant workplace. Even if your facility isn’t meant to host the occasional client meeting the way many traditional coworking facilities are, it should still be well-lit and comfortable. If the only space you have at your disposal to convert to a coworking area is a basement or a cramped corner, it’s not going to be worth the investment because tenants won’t want to use it.
Traditionally, when landlords offer an amenity, it’s used as a marketing draw that all tenants pay for and can access. With new smart technology, however, landlords may be able to consider more of an opt-in approach to added facilities. Tenants can be issued individual pins that provide access via smart locks, which are increasingly popular with multifamily properties anyway, since they eliminate the cost of replacing keys.
Alternatively, if you’re not quite ready for smart locks, it’s quite affordable for property owners to purchase access card encoders and readers and tenants who choose to pay for coworking access could be granted access in this way. This would help keep costs down for tenants who have no need of such facilities, keep down crowding, and still ensure that the space is profitable.
It’s easy to think of new amenities as targeting a new group of tenants, but it’s important to remember that the majority of users for any addition – not just a coworking space – are people already living in your multifamily property. Why not ask them what they want, then? By developing a plan in conjunction with your current tenant base, you can develop facilities that meet their needs. Simply creating a space and assuming tenants will want to pay for it is a terrible way to approach something as expensive as a major renovation, so don’t create a financial sinkhole for yourself and your property.
As explored above, there are many ways to make sure you’re meeting your tenants’ needs when undertaking a renovation, such as adding a coworking space to your property. One of the most powerful tools you can have at your disposal when developing your real estate is deep local knowledge – and that’s why you can benefit from working with Green Residential.
With over 40 years of Houston-area property management experience, no one knows the local real estate market like Green Residential. Our full-service team helps landlords tackle all of the day-to-day tasks that go into rental management, from tenant screening and rent collection to repairs and evictions.
What’s more, our team has services for investors with just a few units, as well as those with multiple, large properties. As a team, we’ve seen it all.
If you’re looking for help managing your Houston-area rental property, contact Green Residential today to learn more about our services. We’re excited to meet you and your tenants and help simplify the property management experience, because being a landlord doesn’t have to be hard.
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