Flexible leasing startup, Bungalow, will now offer its services in Philadelphia. Its business model brings something new to the property table by offering spaces for young strangers.
The San Francisco-based company leases private homes from their owners for years at a time so it can rent those dwellings out by the room.
Bungalow chief executive Andrew Collins said the company offers a homier, less costly alternative to the “co-living” projects that are popping up in desirable neighborhoods in Philadelphia and beyond to house those who can’t — or don’t want to — afford a full-blown home of their own.
He compared his approach to that of co-working operators such as WeWork, which manage space that they rent from commercial landlords for sublease to shorter-term office users.
“Folks are fed up at having to put half of their paychecks toward rent,” Collins said this week. “We can really offer a great service where you don’t need to sacrifice to live in amazing neighborhoods.”
Susan Wachter, a real estate professor at the University of Pennsylvania’s Wharton School, said she sees Bungalow’s approach as a modern version of the rental-agent businesses that have long matched tenants with homes.
But by putting large numbers of properties under its direct management and using an online portal to fill each home to capacity, it can operate more efficiently and profitably than a traditional broker, Wachter said.
“It’s different because it’s linking to the internet and the shared economy," she said. “It’s Wall Street taking single-family homes and renting them out as multifamily."
Bungalow started about two years ago and has concentrated largely on markets where high housing costs make home-sharing especially attractive, such as the San Francisco Bay Area, Los Angeles, Boston, New York and Washington, D.C.
It’s beginning in Philadelphia with a portfolio of 13 three-bedroom properties, mostly rowhouses, in Center City and surrounding neighborhoods including Northern Liberties, Bella Vista, and Point Breeze. It plans to more than triple its leases with city homeowners by year’s end.
Rooms in the city range from $650 a month in Point Breeze to $970 a month near Washington Square, according to its website.
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