Invest in boutique destinational coliving

Purchase, fitout and operation of property as destinational coliving spaces. A short to mid term hospitality-oriented model significantly above rental rates, serving remote workers by offering in-house coworking facilities, alongside connection and adventure.

These pages are in-progress and incomplete. For more details than presented here, please contact: jacob@hub.house Whatsapp

Satellite workation properties

• under ^€250^k capex
• over 25^% net yield


• 10–16 capacity
• €1000+ month
• 2–8 week stays


• coworking for remote work
• over 40^% common spaces


• facilitation for great experiences
• towns for vivacity
• nature for adventure

A high yield approach

• acquisition of low-cost properties to renovate and refit
• space planning and fitout for optimised shared use
• more smaller private rooms with more common spaces
• less obvious locations brought alive through community facilitation
• balancing higher rates and lower overheads

A growth goal

To develop renovation-fitout techniques and operational processes that scale cost effectively, delivering multiple locations to create returning loyal members — similar to Outsite.

The market

The segment offer is that of a slow travel workation — a longer getaway for professionals whom can travel whilst they work, taking advantage of down time for adventure and camaraderie.

Opportunity

Changing lifestyles allow location flexibility, but…

• hotels are expensive, bland and lack common spaces
• random AirBnBs have bad workspace
• participation with others preferred over isolation
• where to escape city routine amongst a dynamic community?

At boutique destinational colivings guests pay for…

• a community of like-minded professionals upon arrival
• better and more shared facilities
• ergonomic workspaces in the building
• organised opt-in activities and entrepreneurial exchange
• inclusive transparent pricing with flexible booking
• expanding our horizon of possibilities

Audence

Predominantly digital nomads seeking to break isolation without hassle, yet will be outnumbered by remote-working professionals seeking escape from hybrid-work routines whilst remaining connected and sharing experiences.

1. digital nomads — a niche but growing audience whom intrinsically work away semi-continiously; reliable easy to target reoccuring demand, though lower tolerence for higher prices
• no well established size, but estimates over 40m global
• informally up to 80m if including workations
• over 20% of nomads work with employer recognition and support
2. adventurous professionals combining remote work with travel only on occasion — seeking an escape from the city, invigoration and interesting connections; harder to target yet larger audience having stronger spending power
• no known size but coworking members closely align as a segment having over 1.5m members in 6800 spaces across Europe
• platforms such as Airbnb report stays of 28+ days now account for very significant revenue
• workations have 11.7% compound growth
• 650,000 UK remote workers have moved abroad or become digital nomads / slow travellers (LiveCareer)
• roughly 1 in 3 knowledge workers plans at least one workation trip per year (multiple studies)
• 72% of remote-capable employees in the EU expressed the intent to take a workation (Eurofound/SD Worx)
• 60% of EU "knowledge work" is now hybrid-eligible (McKinsey)
3. team retreats and retreat organisers — these introduce issues due to exclusive use, but can be offered out of season

Comparatively

Sits neatly between traditional hospitality (hotels, guesthouses) and long-term lettings (rentals), with a highly adjustable proposition (e.g. pandemics, seasons).

	lettings	coliving	hospitality
pricing	low	mid	high
operations	low	mid	high
churn	low	mid	high
flexibility	low	mid	high
investment	low	variable	variable

Offering

The primary appeal is that of good people amongst whom to work with good facilities. Most of the audience primarily work typical hours. Only during off hours will outings be participated in, and thus the appeal of the surroundings is a secondary consideration, yet adds considerably.

• simple payment and booking with inclusive price
• community facilitator to organise events and outings
• communal meals together
• functional facilities to look after oneself
• good facilities to work (ergonomic, good internet)
• nice facilities to hangout (lounge, terrace/garden, sauna, …)
• well organised property and spaces (cleaning, storage, washing, …)
• places to pop out to and explore when not working
• trails for a local stroll or run

Properties

The first location — the south of France

• a world-class tourist destination yet underappreciated amongst digital nomads
• under represented in the category — only 3 spaces in same class (see map)
• varied envionments and activities, plus great food
• accessible destination for the less adventuous
• founder is based and has experience here

Candidates

These two represent a great combination of surrounding attractions, low risk works and low capital — for best returns. Poor on access except for direct to door. These types of properties generally remain on the market for years and France is overloaded with them, same for Italy, Portugal, but prices higher.

Fitout and facilities

Accommodation classes will cover the breadth of the market ensuring both demand reslience and community diversity (varies per property, see reports).

Designed for simultaneous uses by multiple members. Most other colivings fail on multiple counts, whether a too small kitchen, intrusive access to bedrooms through a workspace, or simply carrying clothes from a washer up 5 storeys.

Having experience both operating and using such spaces, the founder understands the design principles to maximise both function and interaction, increasing attractiveness and value.

• no more than 15 rental beds — to remain outside regulation (France)
• smaller private rooms to optimise capacity, with larger common spaces
• primarily ensuite rooms (some premium), plus some basic rooms and pods
• affordably functional and cosy with unique features — avoiding statement design, considering higher wear and tear
• multi-station kitchen with multiple fridges and generous easy-access storage
• casual coworking plus focus coworking / library
• call booths away from workspace
• multi-purpose lounge
• outdoor space / BBQ

Funding

• €75k from founder
• upto €25k sweat equity from artisan for renovation lead
• upto €25k sweat equity from founder for renovation labour and management
• Requirements: around €150k, phasing possible

Spend

• property acquisition €50–75k
• renovation materials
• fitout, furnishings and equipment
• no labour (first property)
• renovation workers/volunteers
• minibus (2nd hand)
• operational runway (nominal)
• marketing (nominal)

An operational platform shall be provided for use by the founder, including hilighted positioning on the coliving.community website.

Most localities are in the rural revitalisation zone (ZFRR, previously ZRR), thus gaining zero-rated property tax, with reductions into year 8, and the same on taxation of profits. The prior does however require an application with review, these are not included in calculations.

Phasing

Properties have opportunities to launch partially at different compleition points, both mitigating risk from renovation in case of over run, or in case of deferred funding.

Basic launch

• around €700/month per room
• covers running costs
• rudimentary common areas
• few rooms with shared bathrooms
• founder full-time

Soft launch

• around €875/month per room
• more rooms and some ensuites
• better finishing

Full launch

• around €900/month per room
• full revenue capacity
• all facilities + minivan
• founder part-time only

Model

Hospitality cross-over rentals in the destinational coliving segment.

The approach for this case is in leveraging typically small old hotels and and larger village houses, no longer having adequate yield due to requiring renovations, so being exceptionally low acquisitions.

Refit of such smaller atypical properties avoids capital waste acquiring a functioning property that would need works to optimise, else without may be less functional / usable for this offer.

• integrated property ownership and operations, addressing market demand through direct investment in optimal facilities — few operators plan and invest adequately (including those launching as coliving), thus a significant differentiator
• community facilitation and housekeeping through founder-trained volunteer staff employing sector best practices
• wide accommodation offer spanning lower to mid-upper (potentially also higher)
• some 1 and 2 week stays permitted addressing city escapes for busy professionals, usually 4 weeks, managed through a bespoke booking system maximising occupancy
• longer stay discounts (better community and reduced onboarding)
• potential additional revenue stream with team retreats (during off season)
• pandemic survivable due to small number of people and longer stays

Differentiation

The market is not sufficiently saturated, even amongst spaces exclusively taregtting digital nomads, to need significant differentiators, however having some helps significantly build return guests and reputation.

• purpose designed spaces and fitout
• below market rates (initially)
• ergonomic separated lively and focus coworking
• high proportion of ensuites
• lively and focus social spaces
• nature, shops, transit at door
• community focus

Primarily identified by purpose designed common spaces as very few colivings actually optimise facilities, e.g. one well known space having 24 residents has a tiny kitchen with a single 4-ring hob, and call booths that are not sound proof. Additionally many do not offer ensuites which are strongly preferred, as typical homes used as colivings have a shared bathroom layout that would be costly for these operators to optimise.

In addition it is uncommon to have a single spaces for multiple given uses, e.g. when residents have a fun social gathering but the coworking is adjacent, work has to be interrupted.

Other spaces have highly variable community experience across the year as they do not train their volunteers, with a small investment in this it will be more consistent.

Please refer to individual property reports for specific location details and differentiation.

Revenue

See property reports.

• VAT exampt to €93k, else 10%
• ~2 units reserved for staff (per capacity)
• higher rates for stays of 14-days and discounted for 6+ weeks (no effect on averages)
• vacancy reduction through fixed weekly move-in and departure days, with booking supplement wavied for sequential dates (i.e. sequentional to another booking)
• move in and departure nonetheless permitted for any day however these extra days will be in pods until availability is confirmed nearer the time (handled by bespoke system)
• probable short annual winter closure

Assumptions

Pricing ball-parked around €975/month per room of the most common unt class, for the first couple of years to build membership. Significantly lower than competition.

The highest rates in-class are for a coliving space in the Alps, having great community and surroundings, yet nominal facilities — at €2000/month for a room with shared bathroom (+20% ensuite; peak rate for 6 months).

If we discount this 30% for less notable surroundings and reputation, we get a target price of €1400 — for an ensuite and better facilities. This rate is on-par with other spaces at lower-spec, therefore there is scope to increase prices, potentially to the same level in the case of locations having impressive surroundings and achieving similar reputation.

Not considering this the market highest rates reach around €1700/month peak-season which is nonetheless also a significant increase.

Competition

These base rates (better rooms available) are for shoulder season, peak rates 10–25% higher and can also cover more than half the year.

Marketing

• direct interaction — on forums and in online groups, undertaken by volunteer-staff posting unique content (this is the most common method used by coliving spaces, however few produce content and only post offers/availability)
• platform leverage — promotion through the founder's own coliving directory site
• residency programmes — offering free stays to those having a strong network
• coworking space managers
• capable of enhancing the community with content (talks, workshops, etc)
• indirect networks
• guest satisfaction, frequently make recommendations as there are few great colivings
• facilitator training, will often spend time at other spaces
• advertising — reddit / facebook targetting for digital nomads and coworking space users
• sponsorships — may sponsor digital nomad events

Once a strong brand is established active promotion is not required as demand is quickly self-fulfilling.

Operations

Min stay and facilitation can be increased or reduced by season to reduce overheads, fixed move-in dates can be introduced to reduce operations.

• functioning in the category auberge collectif (France) permitting 15 beds for rental without restrictions up to 90 days
• low-cost staffing backed by founder training
• residents significantly look after themselves (housekeeping is provided, and room cleaning may be offered)
• cleaner at least twice a week
• volunteers as community facilitator (with accommodation)
• volunteers as driver for outings and trips
• volunteers for some cooking and aditional cleaning

Positioning

Balanced — having good specification, designed for purpose, neatly above only average facilities. Most colivings whilst offering character, sit below average being poorly specified, whilst those that have invested do not have entirely adequate layout due to limited experience (e.g. just one 4-ring hob in a small kitchen for 24 people).

Often the dining table or sofas don't fit everyone as a group together, and that's before considering the existence of proper desks. Nonetheless a notable aspect of the appeal of community living (at least not for too long) is that everyone adapts and compromises, even when paying over €2,000/month.

There is no high-end offering, such guests have wider choice (outside coliving), yet there is demand and a few spaces can be considered as serving the higher end. Hub House properties will not target this but aims for community diversity and as such each property will always have a premium room with higher specification.

Target rates are representative of a moderate sevice level, thus with good ccommunity facilitation, the rates should be easily raised.

Whilst likely locations are not well known they are no less interesting, especially for the more notable audience of remote-workers coming from European metros. So with good rental rates it should have excellent demand, without being dependant upon the temperamental digital nomad segment.

Risks

• property tax and zoning — change of use to an auberge collectif (same as 1-star hotel) the property tax will increase substantially, potentially doubling above residential, however may be reduced for first 8 years
• regulation — over 15 beds, a licence and handicap access are required but staff are excluded and this size is also near the optimal capacity for such a community
• slow delivery — due to requiring renovation and fitout works (e.g. new partitions, plumbing, eletrics, finishing, …)
• should the comitted labour not be adequate, volunteers should easily be found to assist if provided with adequate reward; in worst case local artisans would be used (expensive and slow in France); where significant works are required, labourers from cheaper countries can be hired and given accommodations
• low appreciation and leverageability — only suitable for similar uses (hostel/hotel) in the case of resale (shoudl have no reason to)

Growing to multiple locations with below market rates and well facilitated community experiences building a loyal membership returning amongst the locations.

The format is essentially that of a hostel with long stays no churn from nightly guests, equipped with dedicated separate live work spaces, usually comprising an open plan kitchen-dining-lounge, a casual workspace, and a library lounge focus workspace. Accommodations being balanced between ensuites private rooms (ideally at least 1 premium), and capsules/pods, thus enabling diversity amongst members, and addressing market breadth. This approach results in a fit-for-purpose building ideally specified for remote-worker use in interesting locations that are attractive to keep visiting time and time again. With rates significantly discounted to encourage monthly stays, operations are low overhead. The sole notable operational matter is facilitator/staff/volunteer training, which the founder can undertake on a rotational basis. The founder will retain 1 room for full time use during the startup phase and ensure ongoing operations such as training and quality assurance during volunteer changeovers.

Mutualised fractional use — this has been withdrawn and is unlikely to be revisted however if interested do reach out to stay informed should a combined coliving–cohousing project open up, in which individual units could be owned outright, or for fractional use. That approach would enable a group of backers to purchase and fitout a building, offering guaranteed use and/or dedicated units as a larger hub property, only partly operating commercially. About this.

operational efficiency low-churn results in reduced onboarding and fewer changovers guests/members have lower expectations (except for community faciliation) and also contribute towards cleanliness collectively staff will be volunteers with a stipend and training, in addition to the more typical free accommodation; resulting in better retention the founder will be present for each staff rotation, with slight overlaps for redundancy market breadth targetting the full market potential whereas most colivings exclusively target digital nomads (famously cost sensitive, yet still coliving enthusiasts) the wider market includes most remote-work capable professionals we'll utilise coworking manager residency programs to reach the users of coworking spaces whom are prime candidates unlike nomads leverage the founder's coliving.community site

What's a coliving hub?

🏡

A shared home and workspace, where we also share some of our purpose and learnings.

🛤

For a workation to escape routine, as a retreat to dig into projects, or as a base.

👩‍💻

Be you an entrepreneur, remote worker, digital nomad, a creative, or anything else!

The founder — Jacob Jay

• ex. technical director with a small London marcomms agency
• created the first blended+hybrid coliving+coworking
• ran for 4 years as a social enterprise
• empty building given basic fitout
• 12 beds, 10 desks, event space, onsite cook
• bespoke tech for member management
• after 18 months solely responsible, identified and handed operations over to local director, yet visited part-time
• aided a partner to open a co-branded location
• many diverse tech/UX roles with startups
• undertaken renovation in France, reselling at 220% in #2 tourism destination
• actively tracking the coworking and coliving movements since their emergence
• guest at many coliving spaces and p/t digital nomad
• started a (pre-pandemic) crowdfunding campaign to renovate a mill in Portugal as a coliving; met the town council but ultimately rejected
• creator of the coliving.community directory with 400+ manually classified spaces

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Example properties…

Due to a huge slump in sales (2000+ agents closed) there's good choice of properties, even fully functional hotels for under €0.5m. Most need works such as replacing windows with double-glazing, but allows optimisation of layout and facilities. Having done a bit before I'm ready to get my hands dirty again.