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Content Houses Are All the Rage. Should You Buy One to Rent Out?


Oct 29, 2020 by Maurie Backman
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We live in an age where social media is growing increasingly popular by the day. In fact, think about where you get your news from: Is it from the news sites, like CNN, or from Facebook (NASDAQ: FB)?

The rise of social media has led to a whole world of influencers who spend their days shooting videos, endorsing products, and tweeting messages in the hopes of growing their following. And many of these influencers are unbelievably successful doing what they do. It's only natural, then, that these social media legends would seek to band together under the same roof to churn out content in a collaborative environment. Enter the content house.

What is a content house?

As known as collab houses, content houses are homes -- generally very large homes -- that offer a physical space for social media influencers to gather and pump out content. Content houses tend to offer a host of amenities, many of which serve as the backdrop for videos these content creators put out. So to qualify as a content house, a home may need more than just ample square footage; it may require features such as a swimming pool, oversized deck and yard, high-end kitchen, and home gym, to name a few.

Now, you may wonder: Why do these social media influencers need to bunk together in content houses? Can't they just create content in their own homes? The point of content houses is to bring influencers together to inspire and help each other generate ideas. In fact, to be part of a content house, residents generally need to commit to putting out new social media content daily.

Is a content house a solid investment?

At this point, you may better understand why someone would want to live in a content house. But what if you're not in the business of creating social media content, but rather, a real estate investor looking to make money? Should you consider adding a content house to your portfolio? The quick answer? It depends.

Content houses are known for their steep rents. Some can easily command $80,000 a month in rent, but these homes could cost millions to acquire and thousands more dollars each month to maintain. Remember, content houses often serve as a backdrop for social media videos, so patches of dead grass won't do. Rather, you'll need to provide tenants with an impeccably landscaped lawn. As such, you may find that despite the potential for a healthy stream of rental income, the cost to purchase and maintain a content house just isn't worth it.

Furthermore, because content homes tend to house many people, and there's clearly the potential for tenant turnover, you may find if you invest in one, that home winds up taking a beating well beyond typical renter wear and tear. And of course, there are lease complications to deal with. Don't expect to rent out your content house to a single tenant. Instead, expect multiple rental agreements and vacancies.

That said, if you're up for an adventure and aren't afraid to sink money into a massive home loaded with amenities, a content house could be right for you. If anything, your home will get plenty of media exposure, and if you wind up renting to the right group of influencers, that alone could help it appreciate in value.

The bottom line

Investing in a content house is a gamble but one worth taking if you're not opposed to extra legwork and risk. But if you're going to invest in a content house, it could pay to first talk to others doing it already so you'll know what you're getting into.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has a disclosure policy.