LTV is the customer-economics counterpart to CAC. It tells you the total revenue an operator can expect from each tenant over their full tenure. Healthy unit economics require LTV ≥ 3× CAC; below 3× the unit economics are typically unsustainable.
For coliving, LTV is the product of ARPU × ALOS, less the variable cost of serving the tenant. Long-stay corporate-segment LTV often 2x mass-market digital-nomad LTV at the same ARPU because the LOS is longer and CAC is amortized over more months.
A worked LTV example: Lisbon coliving operator at €700 ARPU, 6-month ALOS, variable cost €120/month (cleaning, utilities, marketing trail) = (700-120) × 6 = €3,480 contribution LTV per tenant. CAC at €350 gives LTV/CAC of ~10×, strong. Compare to a Mexico City nomad-focused operator at $720 ARPU, 2.5-month ALOS, $200 variable = $1,300 contribution LTV. CAC at $250 gives LTV/CAC of 5.2×, still healthy but the shorter LOS means any CAC drift hits margins fast. Segment-mix decisions live and die on this calculation; long-stay corporate residents at €1,400/month for 9 months can deliver 4-6× the LTV of shorter-stay nomads at the same ARPU.
Formula
LTV = (ARPU - Variable Cost) × ALOS
Worked example: Tenant ARPU €800/month, variable cost €100/month, ALOS 6 months. LTV = (€800 - €100) × 6 = €4,200. With CAC €500, LTV/CAC = 8.4. Healthy by most standards.
In the field
European coliving LTV/CAC ratios: Outsite ~10–15× (long-stay digital-nomad with low channel cost). Habyt ~6–10×. Stanza Living India ~8–12× (low absolute LTV but very low CAC). Below 3–5× is unsustainable; above 15× usually means under-investment in growth.
Common pitfalls
- ×Confusing customer LTV with property LTV (loan-to-value), same acronym, completely different metrics.
- ×Computing LTV at gross revenue rather than net of variable cost, overstates the metric.
- ×Using churn-implied ALOS rather than observed, churn-implied is faster-converging but can lag operational reality.
- ×Not segmenting LTV by channel, direct vs. OTA-acquired tenants often have very different LTV profiles.