How to invest in real estate through Coliving: A guide to maximizing your returns

Investing in real estate has always been a reliable way to diversify your portfolio and generate passive income. With evolving lifestyles, a new trend is emerging as an attractive opportunity: coliving. Combining high returns with growing demand, coliving is drawing more and more investors. Discover how to leverage this innovative model to optimize your real estate investment.

What is Coliving?

Coliving is a modern form of shared housing where tenants have their private spaces (rooms or studios) while sharing common areas such as kitchens, living rooms, and even coworking spaces. This concept primarily appeals to young professionals, students, and freelancers seeking flexibility, community, and affordable living.

Why invest in Coliving?

Higher Rental Yield

By optimizing shared spaces and often charging higher rent per square meter compared to traditional rentals, coliving offers superior rental yields.

Optimized Occupancy Rates

Demand for flexible and modern housing is rising, especially in major cities where the cost of living is high. This model ensures more stable occupancy rates.

Reduced Risk of Vacancy

With multiple tenants in the same property, partial vacancy (e.g., one unoccupied room) has less impact on overall revenue.

Tailored to New Generations

Millennials and Gen Z prioritize lifestyle experiences and community. Coliving meets their expectations, ensuring the sustainability of this rental model.

How to invest in a Coliving project

Choose the Right Location

Coliving works particularly well in attractive urban areas close to public transport, universities, or business hubs. Conducting a local market analysis is crucial to ensure consistent rental demand.

Adopt an Appropriate Investment Strategy

• Build a Project from Scratch
  Purchase a property to renovate or construct a building specifically designed for coliving.

• Invest in Managed Residences
  Some companies offer turnkey solutions, handling property management and services provided to tenants.

Optimize Space Design

The appeal of coliving relies on smart design. Invest in welcoming, connected, and functional common spaces. Consider adding extra services like cleaning, high-speed Wi-Fi, or streaming subscriptions.

Partner with Coliving Operators

Collaborating with coliving experts allows you to delegate daily management and focus on your investment. These operators often ensure optimal occupancy rates and steady rental income.

Understand Legal and Regulatory Requirements

Coliving is subject to specific rules depending on the country and municipality. It's essential to be well-informed about zoning laws, legal obligations, and tax regulations before diving in.

Tax advantages of Coliving

Depending on the country, investing in coliving may offer attractive tax benefits:

• LMNP Status (Non-Professional Furnished Rental): In France, this status provides tax deductions or advantageous depreciation.

• Local Exemptions: Some cities encourage this type of housing and offer incentives.

Are there risks to investing in Coliving?

Like any investment, coliving comes with risks:

• More Complex Management: Tenant needs are diverse (maintenance, services, etc.). Partnering with an experienced operator can mitigate this risk.

• Regulatory Changes: Legislative shifts may impact profitability.

• Dependence on Local Market: The success of coliving depends on the attractiveness of the area.

Examples of Coliving Success Stories

Many companies have demonstrated the viability of the model:

• Colonies (France): A startup specializing in coliving, offering attractive and modern housing.

• The Collective (UK): A pioneer offering high-end coliving residences in London.

These examples show that coliving is not a passing trend but a sustainable solution to the needs of today’s generations.

Conclusion

Investing in real estate through coliving is an innovative opportunity to diversify your portfolio while meeting growing rental demand. With the right location, optimized management, and attention to tenant needs, this model can deliver attractive and sustainable returns.

Would you like to learn more or get personalized support for your coliving investment project? Contact our experts for a tailored consultation.