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Co-living as a residential option is coming of age in India and many companies are offering their services in the co-living domain to millennials. These millennials, whether students or young professionals, are increasingly opting to stay in co-living spaces provided by organized and unorganized operators as they find it better than many other residential options.
You are reading: Types of Co-living Business Models In India
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Players in co-living industry in other countries have many business models and generate revenues in various ways. However, co-living industry in India is still in nascent stage and the players have more-or-less restricted business models. The players are still experimenting with the models in India.
The operators have largely one of the following business models in the country:
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1 Complete Ownership: There are co-living operators that own the property in which they are running the co-living space. In other words, ownership and management of the co-living space rests with one individual/entity. The owner runs the affairs after making suitable renovations and alterations to the property, making it conducive for co-living operations. There is no requirement of too much capital deployment since the property is owned by the manager of the space. However, there is some expenditure towards making improvements to the property, in both civil work as well as in decorations. In India, there have been many cases where ancestral property has been converted into co-living spaces by the owners after making some changes and renovations. In this model, there is no sharing of profits by the owner of property with the manager since the owner and the manager is the same. There are a lot of unorganized co-living players having this model since it is fairly easy to get into this business by owners of property. Some of the owners of property tie up with professional managers to maintain and upkeep of co-living residence.
2 Leasing And Running: In this type of business model, the operator of the co-living space only leases the property from the owner and makes some renovations and then lets out the property to a group of people, that is, customers. The operator in this case takes care of the maintenance and day-to-day functioning of the property and also collects the rents from the occupants. In other words, the everyday maintenance and all the related headache is borne by the operator. For running the show, there is profit sharing between the operator and the owner of the property. The profit sharing can be 50:50 or any other ratio. This is where a lot of startups have entered in India. Some of these companies take up to 70 percent of the revenues and the rest if given to the owner of the property. Some of them have nationwide presence while others have only regional presence. The operators try to have standardization in looks and services offered by them wherever they have such co-living properties.
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Category: Lifestyle
