Short leases come with high risk for co-living players

Singapore

CO-LIVING'S short flexible leases - one of its main draws - could also be the biggest risk factor in its business model.

Observers told The Business Times that co-living startups need to be wary of the volatility in its revenue streams because of a mismatch between longer-termed leases signed with landlords and shorter-termed rental agreements with tenants.

Coupled with a highly mobile target audience - millennials, expatriates and technopreneurs, these models face a huge risk of being liable for their leases without having secured tenants for the entire duration.

Most co-living startups rent residential units from landlords, then sublet bedrooms in these units, paired with shared facilities and amenities such as kitchens, gyms and karaoke bars. Similar to co-working, co-living aims to foster a sense of commu…