Coliving Properties Generate 20 to 40 Percent Higher Gross Rent Than Traditional Rentals

Written by:

Rudi Davis

Date:

01 Mar 2026

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Coliving properties are producing gross rents 20–40% higher than traditional rental models, according to Clara Arroyave, Founder and CEO of Coliving Cashflow. This premium comes from reconfiguring single-family homes or multifamily units into multiple private bedrooms with shared common areas. Landlords can collect several rent payments from a property that would otherwise support only one lease. As profit margins shrink in conventional rental markets, more investors are adopting coliving as a long-term strategy rather than a stopgap.

“Coliving delivers 20 to 40 percent higher gross rent than traditional real estate investments,” Arroyave says. She also points out that the model’s income stream is more predictable than that of short-term rentals.

Coliving’s resilience is evident in recent market data. Platforms specializing in coliving have expanded to Arroyave attributes this stability to coliving’s ability to withstand partial vacancies. If one or two rooms remain unrented, the property can still generate enough income to cover loan payments, insurance, and operating costs.

How Multiple Income Streams Reduce Rental Risk

Traditional rentals depend on a single tenant. If that lease ends, the property generates no income until a new tenant signs. Coliving spreads this risk across multiple renters, making cash flow more reliable even in a slow market.

“Even if you have one or two rooms that are unoccupied, you can still pay insurance and other expenses,” Arroyave explains.

This structure is especially relevant as high interest rates and rising construction costs erode returns on standard rentals. Investors with expensive financing are finding it harder to generate positive cash flow from conventional leases. Coliving’s higher income potential and flexible occupancy policies help maintain profitability under these conditions.

Coliving also generally experiences lower tenant turnover than short-term rental models like Airbnb or VRBO. While short-term rentals require constant guest turnover and frequent cleaning, coliving tenants often stay for several months or longer, which reduces vacancy periods and operational costs. Properties with thoughtfully designed common areas and strong community features tend to retain tenants longer and see more consistent rent payments.

Institutional Investors Expand Into Coliving

The coliving sector is attracting not just individual landlords but also institutional investors and large-scale operators. Arroyave says her clients now include those managing portfolios of 100, 600, and even 1,000 units, all focused on expanding coliving operations in multiple cities.

“My client base is doubling and tripling because of market demand and strong returns,” Arroyave says. She attributes this growth to investors recognizing that coliving addresses ongoing affordability challenges rather than a temporary market anomaly.

The entrance of larger players is changing the sector. Institutional investors are bringing in professional management, standardized systems, and capital for new construction designed specifically for coliving, rather than relying solely on conversions. This is raising standards for quality and operations, which Arroyave says will distinguish serious operators from those treating coliving as a quick-profit tactic.

Lenders are beginning to accept coliving as a legitimate asset class, though most still require strong performance data and experienced operators. Financing remains a hurdle, especially for investors without a proven track record or the ability to underwrite coliving projects effectively.

Growth of Purpose Built Coliving Developments

While many investors start by converting existing homes or apartments, purpose-built coliving developments are becoming the preferred approach. Developers in states like Texas, Florida, Washington, and New Hampshire are now building properties specifically for shared living, allowing them to design layouts that maximize bedroom count and create appealing common spaces.

“Purpose-built coliving properties are taking off, and those are even better. You don’t need to refinance. Your maintenance issues will be fewer. And then you can decide exactly the product that your client base is looking for,” Arroyave says.

Purpose-built projects eliminate many problems found in conversions, such as outdated plumbing or electrical systems, inefficient layouts, and zoning complications. They also enable developers to include features valued by coliving tenants, like larger communal kitchens, coworking areas, and soundproofed bedrooms.

Arroyave’s firm, Coliving Cashflow, provides underwriting tools, education, and consulting for investors interested in coliving. Over the past two years, she says she has analyzed more than $1 billion in properties across 500 markets and advises portfolios totaling more than $200 million. The firm is launching a coliving calculator and a 90-day coaching program to help investors avoid common pitfalls in financing, underwriting, and daily operations.

The Future of Coliving as a Scalable Investment Model

As profit margins on traditional rentals remain under pressure, coliving is emerging as a viable alternative for investors willing to operate at the intersection of real estate and hospitality. The main challenge now is whether the sector can expand quickly enough to meet demand while maintaining the quality and community features that make the model successful.

If purpose-built coliving continues to attract institutional capital and professional management, the sector could become a permanent fixture in the rental housing landscape. For investors, the opportunity lies in adopting a disciplined approach that prioritizes tenant experience, efficient operations, and long-term value over short-term gains.