— invest in — boutique destination coliving

A hybrid hospitality-lettings model as property owner-operator at mid-tier, having rates significantly above rental yet operational overheads below hospitality.

Serving digital nomads and remote workers for workations, offering in-house coworking and facilities, alongside community connection and adventure.

• ↙︎ ^€250^k capex
• ↗︎ 25^% net yield


• ~€1400 monthly rates
• 2–8 week longer stays
• 12–16 capacity


• coworking for remote work
• ↗︎ 35^% common spaces


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

A high yield approach

• acquisition of low-cost atypical properties for renovation
• purpose-designed space planning and fitout for shared uses
• more smaller private rooms with more common spaces
• less obvious locations brought alive through community facilitation
• higher rates with lower overheads
• memorable, simple and scalable brand

A growth goal

Developing business practices to scale cost effectively, delivering multiple locations, creating a loyal base of returning members.

Comparatively

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

	lettings	coliving	hostels	hospitality
rates	low	mid	mid	high
operations	low	mid	high	high
churn	low	mid	high	high
flexibility	low	mid	high	high
investment	low	variable	low	variable

Founder — Jacob Jay

• pictured right, whilst attending Swiss Nomad Fest.
• ex. technical director with a small London marcomms agency
• created the first blended+hybrid coliving+coworking in 2010
• running for 4 years as a social enterprise
• empty building given basic fitout
• 14 beds, 10+ desks (open to public)
• event space, in-house cook
• bespoke tech for member management
• assisted a partner to open a co-branded location
• diverse tech/UX/management startup roles
• undertaken renovation in France, reselling at +115% in popular tourist destination
• guest at many coliving spaces and part-time digital nomad
• started a (pre-pandemic) crowdfunding campaign to renovate a mill in Portugal as a coliving; obtaining excellent reponse, meeting town council, but ultimately rejected
• actively tracking the coworking and coliving movements since their emergence
• creator of the coliving.community directory with 400+ manually classified spaces

These pages are incomplete and in-progress. In fact long and slightly rambling, yes maybe I need to create a pitch deck… For more details please contact: jacob@hub.house Whatsapp

The market

The segment offer is that of a slow travel workation — a long getaway or retreat 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 unsuitable for longer remote-work stays
• random AirBnBs have bad workspace
• participation with others preferred over isolation
• difficulty of escaping city routine without loosing connection

At boutique destinational colivings guests pay a premium 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 their horizon of possibilities

Audience

Existing targetting is almost exclusively at digital nomads, seeking to break their isolation during travels whilst avoiding hassle — outnumbered by the latent and much more significant segment of remote-working professionals seeking occasional escape from hybrid-work routines to share experiences whilst remaining connected.

1. digital nomads — a niche but significant group whom intrinsically work away semi-continiously; reliable easy to target and having reoccuring demand, if 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
• travel at will to anywhere that appeals and works for them
2. adventurous professionals — whom combine remote work with travel — seeking escape from the city, interesting connections and invigoration; whilst harder to target they're a much larger audience with strong spending power
• no known size but members of coworking spaces closely align as a segment having over 1.5m members in 6800 spaces across Europe
• 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)
• platforms such as Airbnb report stays of 28+ days now account for very significant revenue
• 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 — represent a strong secondary offering in off-seasons when their exclusive use can be accommodated

The wider trend towards coliving adoption has significant year-on-year growth in the wider residential sector for collaborative housing finds that "over half of Europeans (56%) find the idea of co-living genuinely appealing" (RE/MAX 2023 European Housing Trend Report) this change of opinions has impact on wider perceptions such as to encompass collaborative working holidays.

Offering

Primary appeal is a space with good people amongst whom to work with good facilities. Surroundings are secondary (is it easy to reach, buy food, go to a restaurant, explore nature, …).

Unlike tourism most of the audience primarily work typical hours, and during off hours outings are participated in together, thus attractions rank low as there's always things to do with others regardless. Nontheless attactions add value and can significantly increase prices in combination with the fundamental qualities of the offering.

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

Competition

The most notable multi-location operator is Outsite, whom target the wider market, they are however overly diversified having both larger properties unsuitable for either work or living, yet also the smaller matching the boutique format. The vast majority of boutique coliving spaces globally (around 100) are independent, though most have only made nominal investment adapting their properties.

The following base rates are shoulder season (better rooms usually available), some locations do not have seasons, otherwise peak rates are higher and may cover more than half the year.

Properties

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 environments and activities, plus great food
• accessible destination for the less adventuous
• founder is based and has experience here

Candidates · visits ongoing

Demonstrate a great combination of surrounding attractions, lower risk works and capital requirements — for higher returns. Due to economic issues France is currently overloaded with these types of property.

Financing

See individual property reports for details, the following is indicative.

Most potential localities are in the rural revitalisation zone, gaining zero-rated property tax and zero-rated corporate income tax for 5 years, with reductions into year 8. These gains are not included in estimates.

Formation

• €75k from founder
• ↙︎€25k sweat equity from artisan for renovation lead
• ↙︎€15k sweat equity from founder for renovation labour and setup
• ↙︎€150k from investors, instruments negotiable:
• promissory note
• ordinary shares
• convertible debt

Phased delivery is possible for mitigation of works, runover or deferred fund raising, however revenue would be proportionally reduced until fully specified.

Spend

• under €75k, property acquisition
• no labour (first property)
• around €125k, renovation materials, furnishings and equipment
• around €10k, minibus (2nd hand)
• nominal, operational runway
• nominal, marketing

Operations

• €93k target revenue (once etablished)
• ~€7k annual maintenance capex (includes vehicle and bikes)
• ~€24k annual opex (at full capacity)
• ~25% net yield

The operational platform and brand shall be provided and managed by the founder under licence (with promotion on coliving.community), and whilst in use the founder shall be granted shares.

Revenue

• VAT exempt to €93k, otherwise +10%; most customers cannot expense accommodation, thus beneficial to remain VAT exempt, until sufficiently established
• ~2 units reserved for staff, plus 1 for founder during launch phases
• higher rates for stays of 21-days or under, and discounted for 6+ weeks
• vacancy reduction through fixed weekly move-in and departure days, with booking supplement waived for sequential dates (i.e. sequentional to another booking)
• move in and departure nonetheless permitted for any day however in pods until availability is confirmed nearer the time (handled by bespoke system)
• potential short annual winter closure

Target pricing in shoulder season €1200–1400/month per room of the standard unit class, reduced to €1075 for the first couple of years to build membership, this being significantly lower than competition.

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).

Discounted 30% for less notable surroundings and reputation, we get the 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.

Shareholder use

A discount value shall be available for those whom wish to use it in lieu of dividends, set annually based on occupancy. During peak it will be the value corresponding dividend payouts of the prior year, at other times it will be increased to the proportion of vacancy corresponding the shareholding excluding shareholders not expected to use it, i.e. if winter is expected to have 50% occupancy, the shareholder's use value will be at least doubled.

Risks

• slow delivery — due to requiring renovation and fitout works (e.g. new partitions, plumbing, electrics, finishing, …)
• should the comitted labour not be adequate, volunteers can be found to assist if provided with adequate reward; in worst case local artisans would be used (expensive and slow in France); should significant works be required, labourers from cheaper countries can be hired and given accommodations; the renovation lead and founder are however hard workers ;)
• property tax and zoning — change of use into the same category as 1-star hotel will increase rates substantially, potentially double that of residential
• 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
• demand collapse — the strategy encompasses broading the appeal and reach for the offer from only digital nomads whom are the both the most easily affected by professional movement, but also cost-sensitive should their revenues from remote work be affected, therefore balancing demand from the professional retreats segment having higher rates and shorter stays mitigates this risk; as final fallback adjustment is to offer long-term rentals to slow nomads
• low appreciation and leverageability — only suitable for similar uses (hostel/hotel) in the case of resale, however not anticipated

Model

Hospitality-rental cross-over in the destinational coliving segment as single-entity owner and operator (not a PropCo–OpCo).

Leveraging typically small old hotels and and larger village houses, no longer offering adequate yield due to requiring renovations, thus exceptionally low acquisition costs. Refit of such atypical properties avoids capital waste acquiring functioning property yet that would still require works to optimise.

• community facilitation and housekeeping through trained volunteer staff employing sector best practices — not crossing fingers that a volunteer has the capability
• wide accommodation offer spanning lower (pods) to mid-upper segments (premium ensuites)
• some 1 and 2 week stays permitted addressing city escapes for busy professionals, usually 4 weeks, managed through a bespoke booking system maximising occupancy — attracting a more dynamic community and widening the audience
• discounts for stays of 1–2 months, but not beyond — for better community and reduced onboarding
• potential additional revenue stream with team retreats (during off season)
• pandemic survivable due to lower capacity and longer stays

Differentiation

The market is not sufficiently saturated, even amongst spaces exclusively taregtting digital nomads, 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 and layouts, due to not owning their properties thus having both lower revenues and excessive costs investing. In addition limited experience plays a significant factor e.g. just one 4-ring hob in a small kitchen for 24 people at a boutique destinational property that undertook a full refit in a prime location…

Often even the dining table or sofas don't fit everyone as a group together, and that's before considering the existence of proper desks.

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.

Positioning

Balanced mid-tier — having good specification — designed for purpose. Most colivings whilst offering character and on occasion good facilitation, have below average specifcation. Whilst there's little high-end offerings, as such guests have wider choice (outside coliving), Hub House properties will aim for community diversity, with at least one premium room having higher specification, but most being standard ensuites, supplemented by affordable shared rooms/pods. Many spaces also do not offer ensuites despite being strongly preferred, therefore standard units will be ensuite.

A notable aspect of the appeal of community living (at least not for too long) is that everyone adapts and compromises, even when paying €2,000/month for average facilities.

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 and whom will spend longer getting to know the area slowly, and ideally returning. With good rental rates the properties due to their singular focus on actual needs, should have excellent demand, without being dependant upon the temperamental digital nomad segment.

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

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
• residents significantly look after themselves
• cleaner for common areas at least twice a week (room cleaning may be offered)
• low-cost staffing from volunteers with stipend, and training from founder
• community facilitator (with accommodation)
• driver for outings and trips
• for some cooking and additional cleaning

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 established with the strong brand, active promotion can be reduced as demand becomes self-fulfilling.

Get in touch with Jacob

jacob@hub.house · Whatsapp · +33652516291 · Book a call

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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!

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