Flex walls are back with a vengeance

Or Goldschmidt moved eight times over his first five years in New York City. “Every move was the same: expensive, stressful, and exhausting,” he recalls. That’s why he founded Roomrs. “I wanted a platform where the pain points—furnishing, utilities, roommates—were already solved so all you had to do was show up.”

Roomrs, PadSplit, and other platforms are cashing in on co-living, a roommate setup with a few sanity-saving upgrades:

• Lease terms are as short as a week (on PadSplit) or three months (on Roomrs) but can extend beyond 12 months. The flexibility is a huge plus for tenants who aren’t sure how long they plan to stay put.
• Rooms typically come pre-furnished and rent for up to half the usual rate.
• No space goes to waste: Three bedrooms are transformed into nine bedrooms as living rooms and garages are repurposed. And yes, extra bathrooms are often added to keep the shower line moving.

Co-living may have claustrophobic Big Brother vibes, but it can be a lifeline for the 22.4 million Americans who can’t afford rent (defined as spending more than 30% of your income on housing). Bill Atkinson, a math teacher in Austin, TX, was living in his car before he found a room on PadSplit in an apartment with people just like him: “middle-aged professionals who don’t make enough to afford a traditional apartment.”

For investors: Co-living properties can generate 30%–50% higher rental income than traditional rentals, says Jonah Platovsky of The Coliving Concierge, which helps investors find areas ripe for co-living (hotspots include Atlanta, Dallas, Houston, Denver, and Kansas City, MO.).

It’s been a game changer for Emanuel “E” Premate, who was “losing money” on a short-term rental near Jacksonville, FL. “Short-term rentals used to be moneymakers, but the market has slowed significantly,” Premate says. So he “pad hacked” his three-bedroom property into five units and listed it on PadSplit, where it now generates $5,000 to $5,750 per month.

A solution to America’s housing shortage? Given that the US is short about 4.7 million homes, co-living could be a quick-and-dirty way to bridge that gap.

“You either have to build more or convert existing homes into serving more people,” Platovsky points out. “Plenty are building more, but that’s expensive and takes time. A huge other niche can be filled by converting.” Still, he admits, “Just like Uber and Airbnb convinced people that it wasn’t weird to get in someone’s car or house, there’s probably some education needed around, ‘All right, it’s not weird to live with random people.’ It will take time. But if the market is there, it will happen.”