Our Co-living series:
- Part 1: Co-living – A Fresh Take on Shared Housing
- Part 2: Co-living Excels in Solving the Problems of the Modern Tenant
- Part 3: The Digital Nomad – A New Type Of Tenant
- Part 4: The Business Opportunity of Co-living
- Part 5: How Co-living Uses Economy of Scale to Generate Profit
Co-living as a business
Fair warning – the next business idea requires you to have an available property OR significant amount of capital to invest. This business is something you can do on the side as an investment, but not something you can do when you’re out of cash. This opportunity is most fitting to current landlords or people who have worked in the hotel industry and entrepreneurs and investors in property.
It’s a new way of monetising real estate by targeting the needs of a growing demographic. By combining hotel experience, with the comfort of having your own home and the social experience that is communal living properties can offer amenities and luxuries at scale and profit from the rent.
This is not an imaginary business idea. It’s first implementations came in the form of “hacker houses”, which were estates where programmers lived and worked together to create a product.
This is how Facebook was created back in 2004. So, by no means is this idea unfeasible and impractical, because it’s already been done numerous times.
The real shape of co-living took form in 2013, when Open Door opened it’s doors (ha-ha) in Berkeley, California. More start ups followed suit like WeLive – the subsidiary of WeWork and Common – a NY start-up.
And just last year, the UK got its first co-living building in London. The Collective is a multifaceted company founded in 2010 by young and aspiring entrepreneur Reza Merchant.
He envisioned a better life for young professionals who “work hard and play hard”. By 2015, Reza’s company was applying the principles of co-living to more than 250 rooms and being involved 1,500 more.
And one year ago, Reza opened The Collective – a 550 bedroom tower in Old Oak, London. The 11 storey facility is so big, they developed a mobile map application to help residents find their way.
Most of the rooms cost £1000 and offer 150 sq. ft studios including a bedroom, bathroom, storage space and a kitchen which is shared with another room. There are bigger rooms available and different add-on plans which allow residents to control what they get in the package and what they pay for.
In particular, the rooms are not cheapest in the property market, but the Collective also offers great amenities that until recently only hotels offered:
- Communal lounge areas
- Communal kitchens, in addition to the ones designated for each room
- Dining rooms
- Roof terrace
- Secret garden
- Cinema room & sports bar
- Games room
- The Common restaurant & bar
All of these are furnished and equipped and available for all residents included their rent. (There are some exceptions). Residents also get commercial grade wifi in the entire building, utilities and heating AND professional cleaning services, including bed linen change INCLUDED in the price.
In context of the available amenities listed above, £1000 doesn’t sound too much.
The Collective is located in Acton, West London and close to Willesden Junction. The building has good transport links and is 30 minutes away from Oxford circus by tube.
Here is what Reza Merchant said about the project:
“We are changing the way people can choose to live. We’re offering a solution that will enable young working Londoners, who are the lifeblood of the UK economy, to live properly, enjoy themselves and meet like-minded people. Co-living creates a genuine sense of community alongside access to so many more amenities than you would get in a flatshare….Our Old Oak development is offering Londoners a fresh and innovative way of living – it’s also a much needed option in the context of the capital’s housing crisis.”
Our Co-living series: