Millennials are opting to rent but with some perks
Demanding millennials with disposable income — either their own, or their parents’ — are increasingly turning to professionally managed hostels and co-living over renting or staying at mom-and-pop guesthouses as paying guests. A host of services like housekeeping, Wi-Fi and emergency repairs are included in the rent, which is at a premium compared with traditional PG accommodation. Startups like StayAbode, CoHo and SimplyGuest, and established players like Oyo, have spaces in cities like Delhi, Noida, Pune and Bengaluru. Mumbai is conspicuous by its absence on this list, due to lack of availability and the high price of real estate.
According to a December 2018 survey by real estate consultants Knight Frank, about 72% of respondents aged between 18 and 23 years were willing to consider co-living as an option for accommodation. Some of the companies offering the service, like Stanza Living which raised $10 million from Sequoia-led investors in September 2018, are positioning themselves exclusively as student accommodation providers.
Real estate owners said even though they get a lower rate from these companies compared with traditional PGs, the upkeep is better and it is easier than dealing with several different renters. When it comes to student hostels, companies may also partner with educational institutions to manage their hostels.
Millennials between 19 and 35 years of age form the vast chunk of customers, who use apps developed by companies to raise complaints and give feedback and get to know who else is staying with them. These apps are also used to provide access codes to the spaces. CCTVs are a norm in common areas and corridors. The lock-in periods range from nil to three months, unlike usual rental agreements which have lock-in periods of 11 months.
As added perks, some companies offer discounts to members from food delivery, restaurant and healthcare brands via partnerships.
Unlike co-living spaces abroad, many companies in India separate their offerings by gender. However, unlike most PGs, people of the opposite gender can come into common spaces. In Bengaluru-based SimplyGuest’s spaces, men and women can go to each other rooms too, as long as others living in the apartment don’t have a problem with it.