7 crazy reasons we should subscribe to, not buy, our homes

When it comes to our homes, are we too hung up on ownership? Owning stuff is on the way out. Instead, subscription models are turning up in almost every business sector.

Residz Team 6/29/2022 4:28:03 AM 4 min read

It’s time for some crazy ideas to make the housing market more accessible to the younger generations. But, are we too hung up on ownership? Owning stuff is on the way out. Instead, subscription models are turning up in almost every business sector. For a recurring fee, the customer gets use of an ongoing product or service. It got me thinking… given the severe un-affordability of housing, should we be subscribing to our home life too?

Currently you can subscribe to:

movie channels (Netflix, Disney +, Apple TV, etc)
cars (GoGet, CarNextDoor)
beauty products (The Parcel by Marie Claire, Peony Parcel)
wine (Vinomofo, Naked Wines)
coffee pods (Urban Brew)
toilet paper (Who Gives a Crap)
fruit and vegetables (Good & Fugly)
software (Salesforce, Adobe, Microsoft, Xero)

There’s also talk of Quick Service Restaurants (cafes and takeaways) starting to offer subscriptions in Australia this year. By way of example, industry magazine QSR Media claims U.S. company Panera launched its US$8.99-per-month unlimited coffee offering in 2020, and half a million paid subscribers are on board.

Ovum Research found Australians and New Zealanders spend an average of $660 AUD per month on subscriptions or recurring goods and services and it claims 70% of Australian and New Zealand businesses are planning to make the shift to a subscription model in the next two to three years.

Benefits of a subscription model for housing

Australians love subscriptions because they take complexity out of our stressed, busy lives.

So to my mind, there are 7 benefits to building a subscription model for a housing business:

Homes are severely unaffordable. The success of any business and subscription models especially is dependent on solving a problem for customers. 90% of homes in our main capitals are out of reach for buyers. A subscription solves the problem of affordability.
We’re becoming used to having what we want now. According to Domain’s First Home Buyer’s Report, it takes an average-income couple between 3 to 8 years to save a 20% deposit for an entry-level home. For consumers used to instant gratification in almost every aspect of their lives, this waiting game is frustrating and inconvenient. Subscription is an instant solution to your housing.
We like convenience. There’s a lot of financial and legal paperwork, due diligence research, house-hunting, organisation, and ongoing maintenance in buying and owning a house. Subscription businesses have cornered the market on convenience and seamless transactions.
We can live anywhere. The modern householder doesn’t want to be tethered to the office. PWC research shows the “ideal work environment for 74% of Australians is a mix of remote and in-person working, while 16% said they would prefer a wholly virtual workplace.” Subscribing to your home life could get you experiencing more parts of Australia.
We want to travel. There were 4.92 million passengers carried on Australian domestic commercial aviation (including charter operations) in April 2022 which is almost back to pre-Covid levels. In the same month, the ABS recorded 663,970 people headed to overseas destinations. A subscription would offer freedom from responsibility.
It’s geared towards the customer. A person renting a home is rarely treated like a valuable customer. In a subscription model business, “churn” is the term for customers who drop out of the system. Subscription model business owners hate “churn” so they aim to offer excellent value and service for their customers.
It’s more sustainable. Home owners like to put their stamp on their property, and for this reason owning a home is rarely sustainable. Landfills are often filled with outdated kitchens and bathrooms, not to mention wood from renovations. Subscription homes could be furnished, reducing the need to own furniture. Subscribing to a home could limit the amount of landfill from renovations and discarded furniture.

So how would it work?

I have absolutely no idea, and I’m thinking that I may just be describing social housing, student accommodation, timeshare, serviced apartment living, or build-to-rent models. However, I’ll keep going with my musing, and try to flesh out a business model for this idea.

To start with, I turn to an Inc. Magazine on the subject for ideas. Apart from ‘low weight’ it seems housing may fit their 4 criteria for ‘what makes a good subscription model business’:

Make sure it’s replenishable - should be a ‘must have’.
It needs to be difficult or inconvenient to replenish.
Product must stand on its own. You must be able to sell the product or service outside of the subscription model.
Maintain a low weight to value ratio.

Tick, tick, tick. So here are a couple of seat-of-pants ideas to create a housing subscription model business.

Pitch it to Airbnb. Airbnb could offer a subscription section where the customer pays a fixed amount of money per year and is offered various properties in a chosen area every quarter or half year.

Pitch it to a property investment group. They could buy up hundreds of properties and have customers ‘subscribe’ to their ‘home living’ services for an annual or monthly fee. It’s already sort of there with build-to-rent. The Financial Times reports that UK retailing giant John Lewis is planning to move away from retail into “build-to-rent” over the next decade. It plans to build and manage the leases on 10,000 flats on Waitrose sites. I’m not sure if homes are furnished though.

Turn unused office blocks as subscription model housing. Tenant subscribers could have a hybrid office environment right inside their home.

Gather up all the homeowners who need house sitters. Subscriber tenants could move from property to property looking after pets and plants.

This idea needs a lot of work, I agree. But I do keep coming back to the idea that a subscriber has dignity in the business relationship, which is a little different to the owner-renter dynamic. Somehow, there could be a germ of a good idea here… but I’ll hand it over to you to run with it!

Residz is a fully-independent Australian-owned prop-tech platform that helps home buyers, home sellers, and real estate agents research property data on Australia’s 12 million homes for free. Head to Residz.com, plug in your own address, and have a play!

Photo by AbsolutVision on Unsplash