The ultimate guide to sharing a living space: important considerations

More people are exploring flexible living and collaborative investment options as affordability constraints and shifting lifestyles are reshaping South Africa’s property market. 

Shared property models like co-leasing, co-investing and co-living are becoming prolific for their affordability and accessibility to prime locations.

This may be friends renting together, siblings buying an investment property or digital nomads sharing space, shared property in urban settings has increased in popularity over the years.

“We’re seeing demand across all age groups from young professionals to seasoned investors, who see the value and reduced risk in this particular approach,” says Grant Smee, CEO of Only Realty Property Group.

Smee unpacks the key "need-to-knows" for prospective owners and tenants looking to embark on a co-leasing, co-investing or co-living arrangement.

A co-lease or joint lease, is a rental agreement in which two or more individuals sign the same lease and share equal legal responsibility for the entire property. This type of arrangement is commonly used by roommates, friends, couples or business partners sharing a commercial space.

However, Smee notes that it is also typical for landlords to draft lease agreements naming only a primary leaseholder. In such cases, especially in co-living situations, he said it is advised that all parties involved sign a separate agreement that clearly outlines each person’s responsibilities.

“These contracts can typically be drawn up on your own or with the help of a professional, both of which are legally binding once signed.”

He notes that in a case where two or more tenants sign a lease jointly, they are typically held jointly and severally liable.

“This means either tenant can be held responsible for the full rental amount or any damage to the property, regardless of who caused it. If one of the tenants chooses to move out over the period of the lease agreement, then a new contract will need to be drawn up.”

Smee strongly recommends that the co-leasing tenants’ sub-agreement details the following financial obligations and how payments are split, responsibility for deposits and damages, a process for early termination and replacement of departing tenants.

“Early termination is a common source of conflict, so it’s vital to include clear terms,” says Smee. “Treat this like a business agreement, even among family or friends and ensure responsibilities around deposits and replacement tenants are clearly outlined.”

The property group said co-investing allows buyers to share the capital and returns of property ownership, with collective buying in South Africa allowing for up to 12 applicants on a single home loan by some financial institutions.

“From dual-owner homes to investor syndicates in multi-let properties, the benefits include lower upfront costs and risk distribution,” Smee said.

He cautions that collective ownership often brings added complexity, highlighting the importance of establishing a clear legal structure.

Smee outlines several key factors for consideration:

• Documentation: Ownership shares and capital contributions must be clearly documented.
• Roles and responsibilities: Clearly define who manages tenants, maintenance, and accounting.
• Profit and loss: Clarify profit and loss sharing arrangements.
• Exit strategies: Include strategies for selling the property and how an investor may exit the partnership.
• Dispute resolution: Incorporate processes for resolving disputes.

“A formal partnership or co-ownership agreement, ideally drafted by a legal professional, is crucial to protect everyone’s interests,” he emphasises. “We’ve seen too many cases where informal agreements lead to costly disputes.”

According to the latest census by Stats SA, approximately 4.7 million South Africans now live with an unmarried partner or in a cohabiting arrangement, indicating just how mainstream shared living has become. 

In a co-living situation, a residential space is shared by multiple (often unrelated) people, typically with private bedrooms and shared common areas. The concept has taken off in South Africa’s high-cost urban areas.

Smee suggests housemates create a written agreement to prevent problems. This agreement should cover key areas such as the breakdown of expenses (rent, utilities, Wi-Fi), communal living rules (guests, quiet hours), cleaning schedules, chores, shared responsibilities, and exit terms if a housemate decides to leave.

“All agreements, payments and relevant communications should be documented and stored,” notes Smee. “This can be vital if legal disputes arise. Having upfront clarity will help reduce disputes and ensure all parties are on the same page.” 

South Africa’s rental market is booming, with average rents hitting a seven-year high of R9 132 in the first quarter this year, according to PayProp. Since September last year, rentals have outpaced inflation, rising between 1.2% and 5.4% (Rode Report).

This growth makes multi-let properties especially appealing. By dividing a property into multiple rental units, investors enjoy higher yields and reduced risk through diversified tenants.

“The multi-let model works well with co-investing,” says Smee. “It offers steady cash flow, even if a unit is vacant.” 

However, he cautions that with 18.3% of tenants in arrears, careful screening and planning for defaults are essential.

Shared property models are unlocking new opportunities for South Africans, whether to live, lease or invest. As affordability challenges persist and lifestyle needs evolve, co-living, co-leasing and co-investing are set to shape the future of real estate.

“Ultimately, these shared models allow more people to participate in the property market,” Smee says. “But they must be approached with proper planning, transparency and legal safeguards to protect all parties involved.”

Developers are said to be aggressively repurposing underutilised buildings into shared living hubs where tenants trade private space for affordability and community.

In Cape Town’s Woodstock and Johannesburg’s Braamfontein, companies like The Student Hub and CoLiv report waiting lists for their R6 500 to R8 000 per month rooms that include servicing and WiFi.

Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty recently said this is a necessary market correction right now when consumers are drowning in debt and the vast majority are battling to keep their heads above water.

“For most young professionals, buying a home is an impossible dream at the moment, with the cost of living remaining so high. They’re even being priced out of conventional rentals, but they still need proximity to urban work hubs.

"Co-living fills that gap intelligently by optimising space and reducing costs through shared amenities,” Geffen recently said.

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