8 types of coliving properties and concepts

Coliving is just a concept. Many types of properties can be easily converted into a coliving space.

You can convert a hotel, hostel, villa or even a motel into a coliving space relatively easily.

This article is going to show you some examples.

Some types of properties like student dorms are more predisposed to be a profitable coliving space because of their layout and the ratio between rooms and common areas.

Others, like large villas, are trickier because the rooms are usually much larger. Typically, you need to renovate a little or even build some new walls if you want to maximize yields.

Let's have a look at some of the options.

1. Hotel

Examples: Zoku, Roam, CitizenM‍

The first Roam's location was in Bali, where they acquired The Shift Hotel in Ubud in 2016. Based on the reviews on the OTA websites (you can still see their profile on Tripadvisor), the hotel was performing well before the acquisition.

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Roam did a fantastic job by adding hip office furniture, hiring a pro photographer and accessing some good PR folks that helped to generate some buzz around their co-living venture in 2016.

While I’m not sure it’s a good idea to convert a well-operated boutique hotel into a mid-term coliving space, this story gives you a good idea of how easy it can be to do.

Historically, hotels have been places where many people have rented apartments long-term. By branding some of the hotel apartments as coliving spaces, you can nicely diversify bookings. As well, hotels usually have quite a few common areas (lobbies, meetings rooms) that aren’t being used frequently, making them opportune spaces to transform into a co-working area or a space to relax.

CitizenM is the first established hotel chain that introduced coliving as a new product in 2020. It’s called Global Passport, and you pay 50 EUR/USD/GBP per night to stay in any of their hotels around the world. The catch? You need to activate a monthly subscription.

What this shows us though, is that hotels with a subscription model is something we’ll likely see more of in the future.
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2. Backpacker hostel

‍Examples: Sun and Co., La Cocotera, Selina ‍

Backpacker hostels in the cities usually have a stable influx of clientele throughout the year and if operated well, they can be thriving and very profitable business.

There are a few hostels in very expensive cities that call themselves a coliving space but they are just hostels where you can stay mid-term.

Hostels outside of the cities are focused on high season where they can make really high yields to generate profits and cover expenses for the rest of the year. Some of them even close their doors during the low season.

But that mid and low season is actually an opportunity to monetize the hostel property as a coliving space. The main challenge here (as is it is throughout the whole hospitality industry): how do you get coliving customers?

They are rarely using Hostelworld and Booking, which are the usual booking channels to fill the hostel's capacity in the high season.

One of the most fascinating concepts operating on small scale in this arena is Sun & Co., a small coliving in Spain.

Sun & Co. operates as coliving from the 15th of September until the 15th of June each year. They adjust the space and furniture in few days and then 3 months during the summer they operate as a backpacker hostel under a completely different brand!

More hostels are discovering this opportunity, like this surfhouse from Ericeira, Portugal.

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The main challenge is that their brand is not associated with coliving and some marketing is probably needed, but the ease with which you can switch to a different concept is appealing.

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The best known hostel chain playing with the “coliving card” is Selina. They raised quite a bunch of VC money and scaled the hostel concept, targeting digital nomads, with the vast majority of their customers being backpackers.

“80% of travellers stay for 2.5-2.8 days, although it’s not completely unusual for people to stay 12 or 60 days”.‍

Selina mastered the hospitality concept of combining different types of customers. The reality might be challenging though - a group of partying students and a digital nomad couple working 8 hours a day probably have a different approach in terms of how they’re using the property. Selina also offers a month-by-month rental program called CoLive.

3. Large villa‍

Example: Entreneurhouses‍

So you have THAT idea for opening a coliving space. No hurry. Let’s test the waters first and post the idea in a Facebook group, Instagram and on Twitter:

“Hey, so I have this idea of renting an epic villa with all these amazing amenities and opening a coliving space. Who’s in? How much would you pay?”
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Toss in 3-4 pictures of the best villa you found on Airbnb to demonstrate the awesomeness. One of the pictures is a pool, of course. There is ALWAYS a swimming pool.

The feedback is fantastic! So many likes and comments! People don't want to pay as much as you expected but that’s because they don't understand the value you’re going to provide 🙂

Opening a coliving villa is probably the easiest way to test the concept. I'm a big fan of the lean startup methodology but what are you actually going to test?

You can’t build a sustainable business with a 5-bedroom villa.

Do you own such a villa and don't have to pay ridiculous rent? That’s a different story. A friend of mine manages a large villa in Portugal. After COVID they decided to try coliving.

What does it take to convert a vacation rental villa into coliving business and attract your first coliving guests? Literally, one sponsored post on Facebook.

There is definitely an opportunity for hospitality operators to combine coliving in the low season with groups (families, friends, parties, weddings, company retreats) during the mid-high season. But the yields from coliving are so much lower that very few actually consider it.

And I almost forgot, a special category: rural coliving spaces that aren’t in luxury villas. My favourite concept is definitely Sende.

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They started to rent (and later buy) affordable houses in the small village of Senderiz in Spain, attracting remote workers to stay for weeks or months at a time and give back to the local community.‍

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4. Single-family home‍

Example: Padsplit‍

Okay, this doesn't sound as cool as renting luxury villas to digital nomads but this market is bigger and doesn't have as much competition yet. Converting a single-family home into coliving housing and renting it room-by-room is actually an interesting opportunity but scaling it might be a challenge.

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I remember staying in different hacker houses during my time in Silicon Valley in 2012. Renting a private studio was expensive and most startup founders were coming to the Valley from abroad to try their luck. “Hacker house” is a fancy name for a large family home rented room-by-room and they started to pop up like mushrooms.

The operators of these hacker houses were startup founders trying to solve the same problem of expensive housing for themselves. When the numbers worked well and occupancy rate was high, they got a free bedroom and even some extra money for their effort.

There was basically no service and sometimes even no system. It was a fun experience for a couple of months and made me think about how this type of housing could work if managed in a professional way.A good example of this approach is Padsplit.
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A good example of this approach is Padsplit. They convert 5-8 bedroom houses in Atlanta into affordable coliving spaces, renting rooms for about $140 a week. All included.

There’s a good podcast interview with the company founder, Atticus LeBlan, if you want to deep dive into this type of coliving concept.

5. Co-working spaces that rent rooms ‍

Examples: Dojo Bali, Coworking Bansko‍

Running a co-working business is hard: individuals don’t want to pay and companies don't care about “community value”, they simply purchase a commoditized service where the margins are low (just enough to survive).

WeWork made many co-working operators believe that there was money to be made here but it turned out to be a fable.

That's why small co-working operators look with hope on any opportunity that appears. Co-working spaces in travel destinations naturally attract digital nomads and remote workers, and they need to live somewhere.

Some co-workers simply ask co-working operators if they could recommend accommodations nearby. Operators quickly realized that there’s money to make but to capture a larger audience, they needed to communicate this service in advance.

Why? Because digital nomads first book the accommodation and then the co-working space, and many of them don't book co-working at all, instead choosing to work from apartments, cafés or libraries.

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Many co-working operators have made partnerships with local accommodation providers and started to offer coliving & co-working packages.

This model is good for scaling in one location that has a sufficient influx of digital nomads. However, it’s important to keep in mind that co-working and coliving are 2 different types of businesses and they are much less complementary than most people think.

6. Apartment building‍

Examples: Common, The Collective, Starcity, Hmlet, Koliving, Colonies, The Babel Community‍

Renting apartments was exactly my first approach to coliving. My plan was to rent multiple apartments in the same building, but I wasn’t able to find an opportunity to rent apartments in a small radius of 500 meters.

The common area where people met each other was a co-working space somewhere in the middle. It turned out it wasn't a big deal for guests to not be in the same building.

I learned that most people want to have privacy and actually don't want to share much of their private space with other people. This is something I’ve observed many new coliving operators don't understand.

My coliving experiment with apartments happened between 2014 and 2016. Now I see everything clearer and I understand those little nuances much better but at that time I honestly didn't know what I was doing 😄

Coliving startups approaching apartments are the one that raise the most money and they've been trying to scale quickly. Common, The Collective, and Starcity focus on large cities and build technology, global brand and a powerful subscription model. That's why investors love them as they remind them of a SaaS business.

There is, in my opinion, an opportunity to operate coliving apartments in smaller cities and combine it with vacation rentals. In fact, a lot of property management companies who operate serviced apartments already are even starting to experiment with coliving models.

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7. Student dorm

Example: Student Hotel‍

Premium student accommodations have very similar facilities as coliving spaces. Many have experience operating with a coliving model and choose to Airbnb rent their rooms during the summer months when students are out.

When the property is well designed and you divide areas with coliving and student rooms, they can actually coexist together. Both students and coliving tenants will use common areas, creating a diversified mix of people. I'm not a student but I wouldn't mind being surrounded by them in a co-working area. But then again, I would prefer not having any noise from parties during the night and I'm not sure about sharing a kitchen.

Student Hotel is one of my favourite concepts as they smartly combine multiple concepts into a healthy mix.

I once attended a coliving meetup in Amsterdam where someone from The Student Hotel did a presentation on their hybrid model.

The picture of the slide talking about revenues was too blurry so I “repainted” it:

Looks like a perfect hospitality mix to me 💯

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8. Motel‍

Example: Startup Basecamp

Motels are cool. At least for me. When I tell this to my American friends, they usually don't agree. ‍

Shelter Social Club is a property management group that refurbishes old school motels in California and makes them attractive for millennials. I stayed in their Los Alamos motel and I loved it!

Shelter Social Club is not a coliving company but it shows us the potential that exists here. Cheap motels are almost anywhere in the US, most of them near highways, but some are in surprisingly prime locations.

The only motel coliving business I know of and have actually visited is Startup Basecamp in San Francisco. We organized a Surf Office meetup in their co-working/event area. They’ve been focusing on startup programs for founders travelling from abroad but I'm not sure if they still operating as a coliving space.

Let't wrap it up!

1. You can operate as a coliving space in basically any type of property (and I didn't mention Kibbo that combines coliving with #vanlife and camping)
2. First you should make a business plan considering the number of rooms for your coliving space, and then you can think about what type of property could fit your plan
3. If you are trying to acquire a property that is already making solid yields with tourist rentals, there is a very high chance that you won't get a good deal
4. Think about how to find a “blue ocean” where you don't have competition - location in a smaller town, underrated property (motel), etc.
5. Coliving is just one of the ways to monetize your property - try to start with enough rooms that you can combine co-living with other channels and types of customers (e.g. groups)
6. Targeting less attractive audiences and providing hassle-free rentals with transparent conditions that make it easy to start is a relatively untapped coliving market (check out Noah)
7. Coliving, in most cases, isn't a complementary product to co-working
8. Don’t try to copy VC funded coliving startups - they play a different game and they don't need to be profitable

This article is part of the guide where I'm sharing tips on starting a coliving business.

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