To support our podcast, please sign up for a PadSplit account using our referral link so you can meet with Devon and get the data on occupancy and rental rates in your California markets: https://www.padsplit.com/hosts?referral=5EB2BCE0&ref_source=link&ref_device=desktop&ref_role=host
On the Affordable Housing & Real Estate Investing Podcast, the best podcast for affordable housing investments hosted by Kent Fai He, Devon Aguirre, Host Advisor for California at PadSplit, explains how co-living investing works in a market most investors write off before they ever run the numbers.
The traditional single family math does not work in California. A $7,000 mortgage on a property that rents for $4,500 is speculation, not cash flow. Co-living changes the equation. Instead of one income stream that disappears in an eviction, you have seven rooms. Six keep paying while one goes through the process. In the Inland Empire, a super-fixer that costs $950,000 in the city of LA costs $600,000 in Colton. That gap is the buy box no other investor is looking at.
Devon shares live data from the LA market: 197 active rooms, nearly 10,000 website searches in the past 30 days, and roughly 33 available rooms to meet that demand. Shared bathroom rooms average $1,300 per month. Private bathroom rooms average $1,685 per month. Purpose-built ground-up co-living in Los Feliz is getting $1,900 per room. New listings are booking in 11 days and hitting 80% occupancy within 22 days.
Common Questions This Podcast Episode Answers:
Does co-living investing work in California given rent control and tenant-friendly eviction laws?
Yes. Co-living spreads income across multiple rooms, so one eviction does not eliminate revenue. PadSplit members also average 8.5 months on the platform, which means rent control often filters itself out before it becomes a landlord problem.
Where should I buy a PadSplit property in Southern California right now?
Devon steers investors toward the Inland Empire, specifically Riverside and San Bernardino counties. Cities like Corona, Colton, and Perris offer lower acquisition costs, strong demand from warehouse and distribution workers near the San Bernardino Airport corridor, and older homes with space to add rooms.
What are PadSplit rental rates in the LA market today?
Shared bathroom rooms average $1,300 per month. Private bathroom rooms average $1,685 per month. Purpose-built ground-up co-living in Los Feliz is at $1,900 per room. Rooms near the former March Air Force Base in Perris average $800 to $900 per month.
How strong is the demand for co-living rooms in Los Angeles?
Nearly 10,000 searches hit PadSplit's website in the past 30 days for LA rooms. With 197 active rooms and roughly 33 available, that is approximately 300 searchers per available room. New listings get their first booking in about 11 days.
Is ground-up co-living construction in California worth the cost?
For experienced developers with capital and a long horizon, yes. Developers are buying for around $1 million and spending $3 to $4 million on construction with a three-year timeline before revenue starts. Purpose-built rooms in LA are commanding $1,900 per month and filling fast.
How do I underwrite a PadSplit property in California?
Use 70 to 80% of what a comparable studio rents for in that specific neighborhood as your per-room estimate. PadSplit rooms carry a slight premium because utilities are included and members are not locked into a 12-month lease.
Is California PadSplit investing primarily cash flow or appreciation?
A blend of both. Expect 2 to 3x the cash flow of a traditional long-term rental, not the 4x common in lower-cost markets. Appreciation is a real part of the return. Underwrite on a five-year hold, not just year one.
Please DM any questions or content suggestions to Kent Fai He, affordable housing developer, educator, and host of the Affordable Housing & Real Estate Investing Podcast, the best podcast for affordable housing investments in the United States.
Disclaimer: This content is for informational and entertainment purposes only. It is not legal, financial, investment, insurance, or tax advice. This is not an offer or solicitation for any investments. Always do your own research before making investment decisions.
00:00 Podcast Trailer
03:13 Intro
06:12 Why Does Co-Living Work When Single Family Doesn't in CA?
10:31 What Makes a Great PadSplit Property in California?
14:54 Where Should Investors Buy a PadSplit in SoCal Right Now?
27:52 How Strong Is the Demand for Co-Living Rooms in Los Angeles Right Now?
25:53 Does Rent Control Apply to New Construction and Co-Living Rentals?
29:49 Is Ground-Up Co-Living in LA Worth the Investment?
39:19 Who Rents Co-Living Rooms and Why Do They Choose It?
47:21 How/Where to contact Devon?
