You Don’t Have to Own a House to Start a Group Home: 3 Ways to Secure a Property

Think you have to own a house before you can start a group home or shared housing business? Think again.

One of the biggest misconceptions for aspiring group home and shared housing operators is that purchasing a property must be the first step. While owning real estate can be a powerful long-term strategy, it is not the only way to enter the industry.

On The Co-Living Code Podcast, Katrina and Felicia break down three practical ways entrepreneurs can secure a property and begin building a group home or shared housing business:

1. Buy the Property

The most traditional approach is to purchase a property and operate your group home or shared housing business from it.

Owning the property gives you greater control over the real estate and can potentially allow you to build long-term equity while generating income through your housing model.

For entrepreneurs with the financial resources and a long-term vision, purchasing can be an attractive strategy. However, buying a property also means taking on responsibilities such as mortgage payments, maintenance, insurance, taxes, and other costs associated with property ownership.

The key is making sure the property works for both your business model and your target population.

2. Lease the Property

You don't necessarily have to purchase real estate to get started.

Another option is to lease a property and operate your housing business from it, provided the property owner allows the intended use and your agreement complies with applicable laws and regulations.

Leasing may lower the amount of capital required upfront compared with purchasing. However, the lease agreement becomes extremely important.

Before signing, entrepreneurs should carefully review provisions related to occupancy, subleasing, business use, modifications to the property, maintenance responsibilities, and the length and renewal terms of the lease.

A strong relationship with the property owner can also make a significant difference. The owner needs to understand what you plan to operate and be comfortable with the arrangement.

3. Rental Arbitrage or Partner With a Property Owner

A third approach is rental arbitrage or partnering directly with a property owner.

Instead of purchasing the property, you can create a mutually beneficial arrangement in which you operate the shared housing business while the property owner retains ownership.

The right partnership can provide advantages for both parties. The property owner may benefit from having a responsible operator and consistent use of the property, while the entrepreneur can enter the shared housing industry without purchasing real estate.

However, these arrangements should never be based solely on a handshake. Clearly defined agreements are essential.

Everyone involved should understand the responsibilities, financial arrangements, permitted use of the property, maintenance obligations, occupancy expectations, and what happens if the relationship ends.

You Don't Have to Wait Until You Can Afford to Buy

One of the biggest takeaways is simple:

You don't necessarily have to wait until you can afford to purchase a house before exploring the group home business.

Buying, leasing, or partnering can each provide a potential path into shared housing. The right option depends on several factors, including:

• Your available capital and budget

• Your business model

• Your target population

• Local zoning and housing regulations

• Licensing requirements

• Occupancy limitations

• Property-owner restrictions

• Your operational experience

• Your long-term business goals

  
  

There is no single strategy that works for every entrepreneur.

Do Your Due Diligence Before Securing a Property

Finding a house that looks perfect for your business doesn't automatically mean you can legally operate your intended housing model there.

Before committing to a property, research the applicable zoning requirements, occupancy rules, licensing requirements, building and safety regulations, lease restrictions, insurance requirements, and other local regulations.

Depending on your model and target population, additional requirements may apply.

Taking the time to understand these requirements before signing an agreement can help you avoid costly mistakes later.

More Than One Way Into Shared Housing

Whether you're interested in group homes, co-living, transitional housing, senior housing, veteran housing, sober living, or another shared housing model, the first step is understanding your options.

You don't necessarily need to start by buying a house.

You can:

BUY IT. LEASE IT. ARBITRAGE IT.

The opportunity begins with understanding the model, identifying the right property strategy, building strong partnerships, and creating a business that serves both your residents and your long-term goals.

Learn More From The Co-Living Code Podcast

The Co-Living Code Podcast with Katrina and Felicia brings real conversations from experienced group home owners and operators who share insights on starting, operating, marketing, systemizing, and scaling shared housing businesses.

From getting your first property to building sustainable systems and growing your business, the conversations are designed to help aspiring and established operators better understand the shared housing industry.

There is more than one way to get into the shared housing business. The question is: which strategy is right for you?

LISTEN TO THE CO-LIVING CODE PODCAST