— invest in — boutique destination coliving

A hybrid hospitality-lettings model as property owner-operator, positioned for mid-tier, rates significantly above rental with operations overheads below hospitality.

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

• ^€210^k capex
• 15^% net yield


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


• coworking for remote work
• 50^% common spaces


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

An optimised 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
• discounted use for shareholders, p/t dedicated room for co-founders

Enabling growth

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

Interested in learning more? jacob@hub.house · Whatsapp

Founder — Jacob Jay

• pictured far right, attending Swiss Nomad Fest.
• ex. technical director with a small London marcomms agency
• created the first blended+hybrid coliving+coworking in 2010
• ran for 4 years
• empty building given basic fitout
• 14 beds, 10+ desks coworking open to public
• event space, in-house cook
• bespoke tech member management
• expanded to a partner-operated location
• creator of the coliving.community directory with 400+ manually classified spaces
• 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 shelving
• actively tracking the coworking and coliving movements since emergence

The first property

the south of France – Cévennes & Ardèche

• a world-class tourist destination overlooked by digital nomads
• under represented in the category — only 3 spaces in same class (see map)
• accessible destination without missing adventure
• varied environments and activities, plus great food
• founder based and has experience here

About the property and location…

France has significant variety and is close to undeveloped metro demand, whilst its economic issues resulting in a current overload of properties having potential low-cost for high returns.

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.

Comparatively

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

	lettings	coliving	hostels	hotels
rates	low	mid	mid	high
operations	low	mid	mid	high
churn	low	mid	high	high
adaptability	low	high	mid	low
investment	low	variable	low	variable

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
• more and better 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 — yet notably 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 and avoiding isolation.

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. solo travellers — whilst looking primarily for activities with others, this user will adapt to a bleisure approach and include some work when there's good community, else can simply chill or do their own exploring whilst others work, then gathering to do more as a group
• estimated over $500 billion with around 15% growth due to changing demographics and lifestyles [The Extended Stay]
• women represent over 65% and GenZ/Millennials over 50% (with 75% planning to travel solo) [research report summary]
4. 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 good people amongst whom to work with good facilities. Surroundings are secondary providing it is easy to access, buy food, go to a restaurant, take a walk,…

Unlike tourism most of the audience primarily work typical hours, and during off hours outings are participated in together, thus specific attractions rank low because 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 and an inclusive price
• community facilitator organising 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

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.

👩‍💻

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

Competition

The most notable multi-location operator is Outsite, whom target the wider market with a diversified offering having both larger properties unsuitable for either work or living, yet also smaller in the boutique format. The vast majority of boutique coliving spaces globally (at least 100 having similar features) are independent, though few have made investment to specifically adapt 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.

Finances

Being in the rural revitalisation zone, benefitting from zero-rated property tax and zero-rated corporate income tax for 5 years, with reductions into year 8. Not included in estimates, however balances against target revenue growth with the potential for improved returns.

Funding

• €75k paid-up from founder (purchase and setup)
• ~€135k from investors (instruments negotiable)
• ~€25k sweat equity for renovation lead
• ~€35k sweat equity for founder
• €270k subscriber capital

Phased delivery not requiring the full tranche permits partial operations, also mitigating runover or deferred funding, however revenue would be reduced until fully specified.

Spend

• €60k (sweat equity) setup labour (first property only)
• ~€140k, renovation materials, furnishings and equipment
• ~€10k, minibus (2nd hand)
• nominal, operational runway
• nominal, marketing

Operations

• €85k target revenue
• ~€8k reserve fund (FF&E & CapEx) †
• ~€30k OpEx ‡
• €13k salaries *
• 48% gross margin
• 40% adjusted margin (EBITDA/FCF)
• 15% net yield
• 12% adjusted yield
• 10% cash on cash **

† at ~6% / €5k, FF&E reserve fund costs are higher than typical hospitality due to coliving having higher consistent use of common facilities. Some CapEx reserve fund at ~3.5% / €2.5k is included, e.g. for vehicles, bikes and windows having shorter forecastable lifespans.

‡ OpEx may have improved optimisation at full capacity therefore could reduce.

* The founder will be paid only a nominal salary (€10k gross), with incentivisation from dividends on their shareholding, thus ensuring a focus on yield optimisation for all shareholders. Volunteers shall have a nominal cash allowance to cover expensible activities. This may be swapped to cover a cleaner instead.

** Cash-on-cash after tax threshold of 15% to 42k then 25%, however not accounting for a proporation of investment as debt, instead assuming all paying dividends.

Operational costs assume direct marketing and outreach strategies, and therefore do not include any coliving booking platform nor promotion fee (generally 10%)s.

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 sufficient demand
• ~2 units reserved for staff, plus 1 for founder during launch phases
• higher rates for stays of 21-days or under, discounted for 6+ weeks
• vacancy reduction through fixed weekly move-in and departure days, with booking supplement waived for sequential dates (i.e. adjacent 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 around €1100/month for standard ensuite rooms, reduced under €1000/month for the first couple of years to grow membership, and 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 with better facilities. This rate is on-par with other spaces at lower-spec, therefore there is good scope to increase prices once established.

Shareholder use

A discount value shall be available for shareholders whom wish to use it in lieu of dividends, set annually based on occupancy. Use during peak months will not be permitted, however may be requested on short notice subject except if for the last 2 rooms. This will be the value corresponding dividend payouts of the prior year, increased by the vacancy proportion for the same season the prior year (e.g. if occupancy was 70%, then 30% will be added to its value).

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 — refusal to grant operational change of use (residential to hospitality), is low likelihood for a down at heel village seeking to improve it's desire however it may not appreciate outsiders, regardless in this worse-case scenario operations would be on the black as sublets which is not ideal to scale but is functional still generating revenue
• 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, thus staying within its limit
• 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 — resale is not anticipated though could be suitable as a large family home with some nominal changes; leverage is possible with a mortgage against to purchase a 2nd property thus requiring less funding

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 targetting 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 · Book a call