Not every investor who wants exposure to purpose built property can commit the capital that a high specification Specialist Disability Accommodation dwelling requires. Co-living exists in that gap.
It is a purpose built, multiple income model at a lower entry price than higher specification SDA, and for a large number of investors it is the more realistic starting point.
A co-living property is a purpose built, fully furnished home designed for three to five independent tenants living under one roof.
Each tenant has their own private, lockable bedroom with an ensuite, so nobody shares a bathroom. What they do share are the communal spaces: kitchen, living areas and outdoor space. It is designed from the ground up for that arrangement, rather than being a standard house divided up after the fact.
Because you are renting by the room rather than renting the whole house to one household, the total income from the property is typically well above what a single tenancy on the same dwelling would produce.
Co-living sits below higher specification SDA on price for a straightforward reason: it is not built to the same standard.
An SDA dwelling in a category such as High Physical Support has to satisfy the SDA Design Standard. That can mean structural provision for ceiling hoists, specific bathroom configurations, reinforced construction, fire safety provisions attached to its building classification, and a certification process involving both an NDIS assessor and a building surveyor.
Co-living does not carry that specification or that certification pathway. It is a purpose built rental product rather than a funded disability housing product, so the build cost and the entry price sit lower.
There is a second distinction that is arguably more important than price.
SDA income comes through the NDIS funding framework, tied to participants with approved SDA funding. It is generally higher per dwelling, and it depends on participant demand, design category and a policy framework that can change.
Co-living income comes from ordinary tenants paying market rent for a room. It is lower per dwelling than SDA, but it draws on the general rental market rather than on a funding framework, and it is not exposed to NDIS policy risk.
For some investors, that second point is the deciding factor. Co-living gives you the multiple income structure of purpose built property without tying your return to a government scheme.
It tends to make sense for:
Co-living is not a simpler version of a standard rental. It has its own considerations:
Management is more involved. Multiple tenancies in one dwelling means more turnover, more coordination and more attention than a single lease. Factor management costs in properly.
Local demand matters. Co-living works where there are single tenants who want it: near employment, education or transport. It is not a product that suits every location.
Furnishing is part of the asset. These properties come furnished, which is part of why they command the rent they do, and furniture is a cost that recurs.
Council and planning requirements vary. Rooming and co-living arrangements are treated differently by different councils. This is a question for the developer.
Triple living is the related product worth knowing about. Instead of one home with shared communal areas, a triple living property is three fully independent units, each with its own bedroom, bathroom, kitchen and living area, on a single title.
Tenants share nothing. You hold one property, one loan and one set of purchase costs, and generate three separate tenancies from it. It typically requires more land, which is why it is often better suited to regional locations where larger parcels are available at a workable cost.
If purpose built property appeals but the capital required for high specification SDA does not work for you right now, co-living is the sensible place to look first. It is a lower entry price, a simpler product, and an income model that does not depend on a funding framework.
This is general information only and not financial advice. Rental returns can fall as well as rise. Speak to a licensed adviser about your circumstances.
To see what co-living and triple living stock is currently available, get in touch with the ACIGP team.
