India's paying guest (PG) and co-living accommodation market is facing a widening credibility gap, with prospective tenants increasingly relying on physical property inspections and personal recommendations instead of digital listings, according to a research report released by InstaDwell Research. 
The report is based on 61 interviews conducted between January and June 2026 with individuals actively searching for PG or co-living accommodation across Hyderabad, Bengaluru, Pune, Mumbai, Delhi NCR and other locations. According to the findings, all 61 respondents said they would not make any financial commitment without physically visiting a property, while 58 respondents expressed distrust of listing photographs and 52 questioned the reliability of Google reviews. More than half of those interviewed also turned to community platforms such as Reddit, WhatsApp groups or personal contacts instead of relying solely on commercial property platforms. 
Researchers noted that users consistently described a market where digital information was viewed with scepticism. Respondents reported that online photographs often failed to reflect the current condition of properties, with several claiming images were outdated, selectively presented or showed different rooms from those eventually offered to tenants. As a result, many prospective occupants said they cross-checked locations using mapping services and neighbourhood imagery before scheduling property visits. 
The report also highlights growing concerns over online review systems. A significant proportion of respondents alleged that some operators encouraged or incentivised tenants to post favourable reviews through rent concessions or by linking security deposit refunds to positive ratings. Consequently, many interviewees stated that they now pay greater attention to recent negative reviews than overall ratings when assessing a property. 
Property discovery patterns have also shifted. Rather than depending exclusively on listing platforms, respondents increasingly relied on Reddit forums, WhatsApp groups, office colleagues and friends already residing in destination cities to obtain unfiltered information about accommodation options. According to the report, these informal channels were considered more trustworthy because contributors had no commercial interest in promoting specific properties. 
Pricing transparency emerged as another recurring concern. Nearly half of those interviewed reported discovering additional mandatory charges after moving in or during the final stages of negotiation. Respondents cited expenses such as electricity, water, laundry and maintenance that were either excluded from advertised rents or disclosed only after initial discussions. Several also reported inconsistencies between online quotations and prices offered during property visits. 
The research further identified operational issues affecting tenant decisions, including minimum lock-in periods, security deposit disputes and inadequate facilities for professionals working remotely. Interviewees said lengthy lock-in requirements discouraged short-term occupants, while concerns over delayed or reduced security deposit refunds had become common. Some respondents also stated that limited workspace within PG rooms prompted them to rent independent flats instead. 
Female respondents highlighted additional challenges, including limited availability of women-only accommodation and concerns about neighbourhood safety that extended beyond features such as CCTV cameras or biometric access. Several reported conducting separate visits after dark to assess surrounding streets, lighting conditions and transport availability before finalising accommodation. 
According to the report, these factors are leading an increasing number of prospective tenants to leave the managed accommodation segment altogether in favour of independent rental housing despite the higher upfront costs and additional responsibilities associated with leasing a flat. The researchers conclude that the sector's primary challenge is no longer digital discovery but restoring confidence in the accuracy, transparency and reliability of information presented to prospective tenants.