What is Co-living and why is it a good investment alternative?

From Withfor, the high standing Real Estate in Barcelona, we expand the panorama of this new model that is giving something to talk about in the real estate world, and, in addition, can be an excellent way to invest in the coming years.

What is co-living?

It is a term that originated in Silicon Valley (California, United States), home to the largest technology companies. In the early 2000s, this city attracted a large number of young entrepreneurs who were looking for places where they could live and enjoy their techie jobs comfortably.

It is a concept that is based on the well-known university student housing, which accompanies the needs of a whole group of young workers who are looking for a place where they can combine their private and social life with their working life in the same space.

In other words, co-living is not a traditional rented residence, but an alternative to a global trend demand that is halfway between tourist and traditional rental, to which is added some distinctive features such as:

• Flexibility and accessibility.
• Technology with a good level of connectivity that must include high-speed Internet.
• Access to platforms, community and spaces for socialising and working.
• Diversity of collective services.

Don’t miss our offer of co-living homes, a special new development with swimming pool, urban gardens on the roof(one for each flat), vertical gardens, concierge service, 24h video surveillance, rainwater recycling, bicycle parking, an atrium in the middle of the complex full of skylights and trees and a multipurpose room (yoga, gym, dinners, coworking, etc.).

Why invest in co-living?

Now, to this question of why it is worth investing in co-living, we can basically sum it up in two aspects: diversity and profitability.

Like bioclimatic architecture, housing built to take advantage of the climatic conditions of its environment, it is a different opportunity. It is a trend nowadays with digital nomads and the sustainable housing in Spain has increased significantly (and in the case of these investments, they can opt for green mortgages).

There are several examples of co-living such as: Urban Co-living, Rural Co-living, even Co-living Airbnb, but, in short, whether around big cities or in spaces far from the cities, each one offers benefits.

In some studies, experts talk of a return of around 7.5%, in contrast to traditional rentals that usually leave a maximum profit of 5.5%, making co-living a profitable business.

So, the projections of how investment in this sector is evolving in Spain and in Barcelona, as many sources indicate that it is a rising trend. Only during 2021, it showed solid figures, and by 2024 it is projected to exceed five thousand beds throughout the country.

We cannot forget to mention all the excellent examples that this style of housing already offers across Spain:

• Nine co-living and Amarilla co-living (located in Tenerife).
• Anceu co-living (located in Pontevedra).
• Repeople co-living (located in Las Palmas de Gran Canaria).

All of them set a precedent for this business model with high success rates.

Some benefits of investing in co-living

• High demand, in some cases with waiting lists.
• Exponential growth model.
• Properties managed by specialised groups, so you don’t have to deal with tenants or maintenance procedures.
• They are by nature temporary leases.
• As they do not depend solely on tourism, a year-round occupancy rate is guaranteed.
• According to statistics, investors could double their profit in contrast to a conventional rental.
• It increases efficiency per square metre, which allows for better management and profitability (Learn more about passive houses).
• Being an adaptable model, it can better withstand market volatility.

About prices

It can vary between 650€ to 1400€ per month depending on the area, the type of co-living or the diversity of services offered.

In that sense, it is clear that there is a powerful niche market for investors, because this new housing format is not only being developed for university students, but also for digital nomads, professional expatriates and families whose parents can work remotely, or simply for all those who decide that they can make life and work connections in the same place.

The truth is that, as an emerging business, it is still taking shape in Spain and will adapt to the corresponding legal framework.

In conclusion, it is clear that the concept of co-living proposes a way of living in rooms where the personal, social and work aspects coexist. The challenge is to guarantee the needs of this demand.

In Withfor, the ethical real estate in Barcelona, we advise you and carry out profitability studies, as well as other reports to ensure your investment.

We are dedicated to follow up our clients and we adapt ourselves to the needs and interests of each one of them. Do not hesitate to contact us if you want to join the co-living as an investment model.