In our increasingly globalised world, housing solutions have to evolve fast in order to remain relevant. The rise of ‘global citizens’ and ‘digital nomads’, individuals who travel extensively for work, study, or leisure, are driving innovation and change across the sector. By 2035, the Organization for Economic Co-operation and Development (OECD) estimates there will be one billion digital nomads around the world. Alongside rising property prices and changing lifestyle preferences, this shift has resulted in a new approach to housing: ‘flexible living’. In this post we explore how the pioneering technology developed to power Lavanda’s numerous industry solutions is now shaping the future of real estate.
Understanding Modern Housing Needs
There is a flux in the contemporary housing market. A rise in global citizens and digital nomads necessitates housing options that cater to their nomadic lifestyles. In a survey by MBO Partners, 4.8 million independent workers describe themselves as digital nomads. In the meantime, soaring property prices and a preference for experiences over ownership are reshaping housing demand. As a result of these changing dynamics, living arrangements that are flexible, commitment-light, and convenient have become increasingly desired.
The rise of digital nomadism and “global citizenship”, though both noteworthy trends in and of themselves, are indicative of a fundamental shift. Globalisation and digitisation are dramatically reshaping renters’ wants and needs. Today in 2023, for example, Think Remote estimates that some 35 million independent workers already identify as digital nomads – and this is only the very beginning of a trend that is ultimately a by-product of low cost, easy access to technology and increased freedom of travel. The modern renter is looking for more than just a place to live. Their lifestyle requires flexible, adaptable living spaces. What does this mean? High-speed internet, a home office or workspace, and relevant amenities that cater to growing demand for convenience and wellbeing. Additionally, there’s a growing preference for more flexible leases, catering to growing demand for greater freedom and transience.
The digital revolution has also reshaped how people search for, discover, and book accommodation. Prospective renters are increasingly turning to online platforms, social media, and even virtual reality tours to make their decisions, prioritising convenience and comprehensive information over in-person viewings. Upgrading critical infrastructure requires a significant investment of time, energy and money, however those that are able to be proactive and adapt fast will outpace the competition and stand to gain the most.
Flexible Living, an Operating Strategy that Responds to Modern Needs
In response to evolving demand, ‘flexible living’ has emerged as an operating strategy to offer a more convenient, customer-centric approach to renting residential spaces. Fundamentally, this allows residential communities to attract, engage and convert a wider audience – i.e. renters looking for shorter, more flexible leases alongside more those looking for more rigid longer-term leases – ultimately with the goal of boosting the economic performance of the asset. In practice, this could look like a student housing complex offering short-term stays over the vacant summer holiday period, or a multifamily building that offers a portion of its apartment inventory on short and mid-term leases alongside the lion’s share being offered as more traditional rentals of 12 months+.
Benefits of Flexible Living for Investors, Operators, and Residents
From an investor’s perspective, flexible living increases asset resilience in more challenging market conditions by enabling a more diversified leasing strategy, whilst also unlocking the ability for operators to tap into high-yielding upside opportunities. McKinsey reports that since the 2021, the number of workers working remotely has quadrupled, hence the demand for flexible rentals is on the rise, presenting opportunities for increased yield.
Conversely for residents, a flexible living strategy offers them a more customisable, more accessible and, in many cases more affordable living experience. Lease duration, payment options, furnishing choices, and access to services and amenities are all placed under their control. In essence, renters are granted the ability to select and shape their living environment to suit their individual needs – a huge benefit that once experienced, people come to expect.
Lavanda’s Role in Enabling Flexible Living
At its core, flexible living is the result of new technology coming to the market – the development of a property management toolkit and feature set that has previously been unavailable to residential operators. Lavanda has been a pioneering innovator and champion of flexible living from day one, and our award-winning property management software has fundamentally shaped the sector following partnerships with leading global players Blackstone, Starwood Capital, Greystar and Hines alongside numerous others.
Our platform automates the operation of flexible rental portfolios, reducing the operator’s workload and cost base, whilst powering a best-in-class, next-gen customer experience for renters. Furthermore, Lavanda PMS offers smart data analytics and real time performance insights, shining a light on the effectiveness of the asset management strategy deployed and giving operators a new level of insight and control.. Based on market trends and portfolio performance, operators are empowered to make faster, more informed decisions. In the dynamic landscape of flexible living, these tools are essential for effective management.
Conclusion: The Impact of Flexible Living on the Housing Industry
Flexible living is transforming residential real estate. It’s a profound shift driven by changing housing needs and facilitated by innovative technology like Lavanda’s. As we look ahead, savvy operators and investors seeking to understand and respond to this shift in demand stand to gain a significant competitive advantage.