1001 Startup Ideas - Co Living Spaces
The startup will make all the capital investment of converting the building into a co-living space, and then it will give out memberships to its customers to rent rooms for a minimum period and charge a certain fee.
What is the idea?
These weeks 1001 startup idea is to convert residential buildings into co-living spaces and operate them. The startup will make all the capital investment of converting the building into a co-living space, and then it will give out memberships to its customers to rent rooms for a minimum period and charge a certain fee.
- 40% of the work force will be freelance;
- 90% of millennials want more flexibility in job;
- Millennials spend 50% of the income on rentals in the major cities;
- Data from a 2014 Gallup poll found as many as 64% of millennials reported having no major relationship in their lives at the time surveyed;
- Single (unmarried) millennials living with roommates or housemates increased from 5.7% to 7.4% between 2005 and 2015.
Further, there is a report by Pieter Levels, the founder of Nomad List on future of digital nomadism. He states that there will be 1 billion digital nomads (or remote workers) by 2035. If that be the case, there is going to be a huge housing requirement for these digital nomads and co-living spaces can be one answer to solve that.
There are a lot of companies which have recently grabbed the idea of co-living spaces and are running packed properties. It includes Wework, which has started to venture into the co-living space business. WeWork is being followed by ‘The Collective' and ‘Capital Living' in the UK and various other Co-living spaces which have opened up in different cities across the globe.
Pain Point & Target Audience
The target customer market for this business are freelancers, digital nomads, and remotely working professionals. These professionals usually have no time and money to invest in their long-term living arrangements. They prefer a living space with no long-term lock-ins creating the flexibility to move across locations. At the same time, they get access to all the essential amenities they would need for a comfortable living.
Renters can share an accommodation and share all the facilities that will be provided at the facility including services of cleaning the rooms for a certain membership fee. The Co-living space will not only provide the users a benefit of using the space for a short period, but it will also be a great bet for real estate owners as this will lead to higher yields or returns from the properties owned by them.
The business model of this startup is to lease out residential spaces from real estate owners and convert them into co-living spaces by putting the essential furnishing and amenities. Now, there can be two models for paying the real estate owner, one, is to give a fixed rental to the owner and gain all the upside on the rent by providing memberships to the users of co-living spaces and the other is to share the profits with the real estate owner.
Way to market
Currently, the rents are on the rise and are becoming unaffordable in metropolitan and other major cities in the world. It is advisable to start the process by opening a space in one of the metropolitan cities in the world. Further, the startup can gain traction by tying up with co-working spaces and offering joint memberships, which is currently not being offered by most of the other players in this segment.
The key would be to demonstrate a successful working model for atleast three to four co-living spaces in different cities. To keep the initial investment low, the startup can start with profit sharing model with the real estate owner. And can later explore if renting the complete itself makes more business sense.
The startup should partner with the top coworking spaces in its cities of operation, and provide bundled coworking and co-living services. The startup can also partner with the startup accelerators and incubators in the city to provide co-living accommodation to its participating startups.
Investment Needed For Prototype
For testing & building the prototype, pitch for raising 200K USD from angel investors to fit in the infrastructure. The startup can reach out to the big real estate developers and propose the profit sharing model. There should be no office rentals or salary payout to founders; the entire budget should be apportioned for customer acquisition.
You would need to have a person with facility management experience as the co-founder to ensure the conversion of buildings to good co-living space and manage its operations.
Investors / Expert TakeCo-living spaces are opening very fast in various cities. Therefore, this would need swift action on the part of the founders. As stated, the founders need to ensure the success of the first co-living space in one city and show investors this model can be replicated. Common and Roam, the two co-living space startups have raised USD 7.35 mn and USD 3.4 mn, respectively, to fund their business and opening new spaces. In case you are looking at scaling or launching this venture, you can apply for our virtual acceleration program Excelrate on our website, Yostartups.com, Yostartups' Excelrate program will help you in streamlining and structuring your startup idea. We have limited scholarships and discount packs for deserving startups, depending on the strength of your application, you may qualify for a discount.