According to fresh data from Statista, 57% of enquired office workers consider that they are more productive when working from home. This change in perception regarding work and living relationships spawned by the pandemic has increased the market for flexible rentals around the world.
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Uncertainty over COVID-19 and the economic rebound have made tenants feel insecure about what’s next, and they are looking for a more flexible renting model that allows them to rent for shorter periods, at competitive costs, and in more adaptable conditions.
Flexible living is a concept developed by rental platform Rentberry in which people can now easily find mid-term (3-9 months) rentals abroad in properties that are fully furnished and that don’t require a security deposit.
So, what are the drivers pushing this trend towards becoming the future of the rental industry?
The way the pandemic has paved the way for flexible housing is attached to several factors. Lockdowns sent millions of employees home to work remotely, but many left to different cities to spend some time with relatives, or simply, work from the countryside.
Given the uncertainty on governments’ plans to deal with the virus, the demand for short-term renting with flexible terms and conditions soared. This phenomenon was more evident in millennials, with boomers and seniors to a lesser extent.
For these millions of workers, renting a house long-term was certainly not an option. While mid to long-term flexible rentals on platforms like Airbnb and Vrbo are flexible and do not require a deposit, they remain out of their budget.
Further, according to an S&P Global study, short-term rentals rode the COVID-19 storm better than hotels, as the latter saw a 77% decline in occupancy, while the former did better with a 45% drop. Despite the data being linked to holiday rentals, the phenomenon depicts how the short-term rental business was already aligning to the flexible living reality.
The Market Moves
Flexible living platform Rentberry has pounced in to offer competitive renting prices for apartments, condos, lofts, and even rooms, as well as a whole array of renting digital solutions. According to Benzinga, the company is now raising money through a Reg A+ scheme to help fuel its growth, “initially targeting $12.4 million but aiming to triple that amount eventually.”
Rentberry has set sights on millennial tenants looking for flexible renting for as short as three months and for as long as one year. “Our goal is to bring one gold standard to the home rental industry that, no matter where you travel, you get the same quality home and the same level of service,” says Oleksiy Lubinsky, Rentberry CEO.
Although not quite catching up with the flexible housing trend, Airbnb reacted at the peak of the pandemic by offering “long-term” rentals of more than 28 days. The move seeks to offer a market for relocating workers, as 80% of the hosts on the platform were willing to offer longer stays. The company is also offering monthly rentals, completely furnished and set up for remote workers including Wi-Fi and office spaces.
Vrbo has also jumped on the bandwagon and is currently offering monthly stays, despite predominantly catering to short-term, holiday rentals.
The Return To Normal
According to The Wall Street Journal, roughly half of office workers in the U.S. have continued working remotely. As some companies normalize their policies and ask them to come back, flexible living might decrease in terms of demand according to providers' predictions.
“Housing companies estimate that the number of workers staying away entirely will eventually drop to around 20%,” which still represents around 36 million workers. This emphasizes the potential of this market even after the pandemic.
Back to a new normal in which employees will ditch the 12-month apartment lease and look for more flexibility, housing platforms and companies are going to adapt and offer more convenient options.
Some firms will launch into capitalizing on the readjustment by allowing for more flexibility. Companies like Zeus Living released its “Nomad” pilot program “that allows unlimited moves within a six-month period with only 14 days’ notice.”
“Once you’re on an Uber, you can’t go back to taking a cab ride in the rain,” says Zeus Living’s co-founder and CEO Kulver Taggar.
In New York alone, according to data from New York City listing site StreetEasy and quoted by Forbes, the number of month-to-month leases soared by 70% while the share of furnished rentals jumped by more than 40% in 12 months.
“Nationally, StreetEasy’s parent company, Zillow Group Inc (NASDAQ:Z) +2.1%, saw an unprecedented surge in rentals for six months or less starting around the week of March 10. Between that day and the end of April, there was a 33% increase in short-term rentals.”
Companies are confident that, despite workers returning to the office, the trend will continue and there will be a great chance to capitalize on a market that grew at a staggering rate during the pandemic. Although somehow latent before COVID-19, flexible living is having a prime time, and businesses with elastic lease terms and a solid offer are expected to succeed.