Contractor · Beech Island, SC · Member since 2010 · 23 posts · 8 votes
I went against the grain and built a tiny house to rent. I was able to squeeze a 512sqft 1/1 house in a $42k budget without financing. That’s land cost and permitting fees included. It was rented @ $550/month before the build was completed. Maybe I’m onto something or is this a shaky investment? Lots in this area are cheap and it’s near a large employment facility. It’s ideal for contractors with no long term commitment.
Developer · Chicago IL · Member since 2019 · 147 posts · 125 votes
6y
@Lucia RushtonI strongly believe you are onto something wonderful! I am working on a small-home vacation destination in South Carolina and the numbers are remarkable. And, I believe, the stability of these type of homes and the rental model you are working with will only solidify due to COVID and an impending economic short-fall for the following reasons;
1. Many American’s are learning to down-size and COVID is accelerating this mindset.
2. If you needed financing, or if you are interested in selling the homes, banks are more likely to lend on a small scale project due to the low risk of default on such a small investment. Interestingly enough, the profit for the builder/developer is very high, usually 25%-50% profit, as they can sell from $70,000 - $125,000 depending on location and amenities.
3. It is the largest growing vacation market in America. Although, at present, the vacation rental market has been hit hard, it is only temporary. Small-homes offer affordable opportunities to vacation in a very trendy model. In your location, the vacation rental opportunity for a small-home is between $50-$125 per night.
4. Many single empty nesters are craving this style of living and purchasing multiple homes throughout the country. This allows them many options without breaking the bank.
5. Last, but not least, it is my personal favorite building model! I love the unique “cottage” feel, low use of building materials so I can feel comfortable saving the planet just a little bit, and the price is my target.
Good luck and if you would like to shoot the breeze and bounce ideas, please feel free to message me.
Developer · Chicago IL · Member since 2019 · 147 posts · 125 votes
6y
@Lucia RushtonI strongly believe you are onto something wonderful! I am working on a small-home vacation destination in South Carolina and the numbers are remarkable. And, I believe, the stability of these type of homes and the rental model you are working with will only solidify due to COVID and an impending economic short-fall for the following reasons;
1. Many American’s are learning to down-size and COVID is accelerating this mindset.
2. If you needed financing, or if you are interested in selling the homes, banks are more likely to lend on a small scale project due to the low risk of default on such a small investment. Interestingly enough, the profit for the builder/developer is very high, usually 25%-50% profit, as they can sell from $70,000 - $125,000 depending on location and amenities.
3. It is the largest growing vacation market in America. Although, at present, the vacation rental market has been hit hard, it is only temporary. Small-homes offer affordable opportunities to vacation in a very trendy model. In your location, the vacation rental opportunity for a small-home is between $50-$125 per night.
4. Many single empty nesters are craving this style of living and purchasing multiple homes throughout the country. This allows them many options without breaking the bank.
5. Last, but not least, it is my personal favorite building model! I love the unique “cottage” feel, low use of building materials so I can feel comfortable saving the planet just a little bit, and the price is my target.
Good luck and if you would like to shoot the breeze and bounce ideas, please feel free to message me.
Flipper/Rehabber · Cincinnati, OH · Member since 2020 · 300 posts · 417 votes
6y
I love the idea of small homes to rent out. I think that's a fantastic way to go, especially near a large employment facility. The rise in the popularity of tiny homes is a reflection of many people's desire to live a more minimalist and lower cost lifestyle. Construction of small homes can keep costs down for both you and your tenants. One thing I especially like about new construction is that you can have a better idea of what you're getting into from both a cost and a time standpoint. With flipping/rehabbing you don't always know everything you're going to need to update and repair beforehand.
Investor · London · Member since 2017 · 160 posts · 82 votes
6y
Hi! I couldn't tag L R either but I'd love to hear more like how long did construction take and was $42k all in cost of all construction? That sounds great. I think alot of folks would be interested in smaller space living if it provides time freedom. Thanks for sharing!