Can I build a tiny house and rent it out as a vacation rental?

24 Replies

I was wondering if anyone on here has experience or insight with this.  I would like to build a unique tiny house on a gorgeous location and rent it out as a vacation rental.  

So any suggestions, comments, insight would be great!

I don't know why you couldn't. The numbers would be tight I'm sure and the returns would likely low due to lack of traditional financing. But if you could use it your self and have some cash it would be a unique opportunity. And overhead would be low.

Medium hhs llc documents logoJohn Powell, Herk Home Services LLC | [email protected] | (850) 684‑2188

Sure you could, there are only two hudles to overcome.  The first is marketing you unique proposition, the second is a little more dicey.  You need to make sure that there is a market.  In general people vacation with their famalies in tow, unless you are in a spring break area, then you are looking at stacking young people as high as they can be stacked.  For a small house, you need to tap into a market or create one, to fit your property.  So I guess the more logical question isnt can you do it, it is does a small house meet an unmet need in the market.  It would help to know more about the proposed location and your target market. 

I hope that helps

Josh

Medium t shirt logoJosh Caldwell, Pittsburgh REIA | [email protected] | http://pittsburghreia.com

A tiny house would be the equivalent of a mobile home. 

I just asked my architect the same question. I have a great property in Staten Island NY. I want to put 3 container homes there. That was the answer I got. I would ask a local architect. 

Dave Fontana, Diversified Acquisitions Group, LLC | [email protected] | 7184834179 | http://www.quickbuyr.com

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thanks everyone!  I am hoping to find a nice location in a US territory in the caribbean and market it as a couples retreat type of deal. Then rent it out when I would not be using it!

@John Powell wouldn't it be a good return if you could charge $100 minimum a night or even more if the location is prime?  Airbnb has some in not the best locations that go for $100 a night.  Its becoming very trendy and popular for people to reconnect with humanity and what a better way than a tiny house in an exotic get away location.

You could market it to people who are considering building or buying a tiny house.  "Come live in a tiny house for a week and see if you really want to do this!"

Put a video on YouTube.  Check out all the views on the tiny house videos there.  It's a huge movement.  I watched a documentary about a young man who built one. It was interesting.

Brandon

Something I have done to test a market out has been to run adds, offering the rental, list the options and see what kind of response I have had.  When they called I explained it was rented. but I do have another deal in the works. could i call them when I got finalized on the new one?  ( I actually owned nothing at the time and I wanted to test the market.).

Our First rental was this way. my wife (a realtor) and my business partner, both said no one wants to live in that farm town.   I ran the add, put my partners phone number in there, and a week later he had over a hundred calls. He finally agreed to buy the house, we rented it a few years and someone approached us to buy it for 3 times what we paid for it. they own it now.   We now have 10 units in that little farm community.

@Rod Fisher another great idea, where would you recommend running ads through since I am doing something in the US Virgin Islands

@Brandon Monaghan

Before actually spending any money the first thing that I would do is check with the local zoning and codes office.  Many tiny houses are built on trailers with wheel and axles to avoid building codes and be considered a trailer which in many states would have a vehicle license.

The gotcha however is that this still may not avoid/evade codes as many codes don't allow RV, trailers or mobile homes.

It you go the other way and build a Tiny House without a trailer/wheels/axles, then you still have to comply with building codes which in many areas have minimum square footages.  One town where I've done business requires 1,100 sq ft minimum size house, which is not really a Tiny House.

Also in some codes they don't allow rentals for less than 30 days, because that throws you into the hotel class then with more and different regs and taxes.

So cover your bases and check zoning and codes before laying out the cash. 

Brandon, not knowing local market, craigslist does have a presence there. local papers, etc. a little market research goes a long way.

We have considered building small houses to replace aging mobile homes. We have a mobile home park that with local ordinances we have to really step up on the price of Mobile's if we replace them.    Mobiles are depreciating assets , We have a build design That we have drawn up in the 500 to 600 sq ft range that looks like it would work and be some what easy to repair. I have talked to the mayor , showed him my ideas. he really liked them . I just have not started building them yet I keep finding foreclosure deals  and rehab. buy and hold. Some day I will start a build.

@Sue K.

That is great idea the combined "try before you buy" vacation location would work great. you would have two markets. you could even build a first model here in the states to let people see what they are getting into before they fly to the Caribbean. the added benefit would be lower cost to build/learn in the US.  You could also try to create a local media buzz that would drive clients to your tiny vacation. After your pipeline is full sell the tiny house in the US and keep the vacation one. with the small scale you may be able to crowd fund the vacation one. I really like the idea.

Medium hhs llc documents logoJohn Powell, Herk Home Services LLC | [email protected] | (850) 684‑2188

I think it's a great idea! Find your location, location, location. After that, tiny is fine for a vacation rental, there are plenty of couples who travel who would like the privacy and convenience of a VR vs a hotel. 

All guests bring is a suitcase and groceries, they don't need lots of space. Think convenient and/or charming location, big views, and keep costs and utility bills down by building small. 

My husband and I stayed in an oceanfront VR on Eleuthera that was about 350-400sf for 10 days, we couldn't have been happier. We own 4 vacation rentals and even though some are 3 bedroom. we offer them to couples for less $ as we find there is a big market for it, the damage and hassle factor is much lower, we offer reduced rates in off season to return guests, and the retired couples tend to return more often than the families. 

So GO FOR IT! Good luck....

As @David Krulac said, you need to check with the local Building Department and check the local Code to make sure you know what it would be allowed in that area.

They have a lot of code requirements on hurricane areas like the Caribbean (at least on tourist areas). You will be offering a service and charging for it. Your tinny house will need to be safe.

Before thinking on doing marketing or a nice video, check the local code and walk into the building department and check what would be allowed.

As long as you realize that you will be helping to cover some of anticipated costs and not making money, you will be fine.

@Javier Marchena that is very true and I will definitely be looking into that.  If there is a minimum sq ft that does not fit the Tiny House model then I will look to buy a vacation rental down there to rent out.  

Can anyone link me to a forum that is about vacation rentals?

The goal is still to build the Tiny House because I believe this movement should continue its trend.  People are looking to live more "simple", especially when on vacation.  Also, why not try it out in the caribbean and see if its for you back home.

YES!  Some of the best Tiny Homes in the world are vacation rentals.  B/c they are so small, you do some very luxurious designs and finishing and charge a premium for the space.  With most hotel rooms being only around 250 sqft, a Tiny Home can be more spacious.  As others have said, one you pick a great location, with a great view then check local city/county/other building officials who might have restrictions.  We've found most HOAs in our area (Galveston, TX) want homes to be at least 800 sqft but other areas outside the HOAs and just in the City/County have no limits on home sizes other than IBC codes that say no habitable room can be less than 7 x 7.

Check municodeDOTcom to see if your city has restrictions.  

Medium newrich logo white smlBelinda Lopez, Realty Investment Community of Houston | http://www.realestateforintroverts.com

This is very interesting idea, Brandon were you able to successfully establish tiny house village? please share your insight if you did. what to do's and don't's. I appreciate your thought.

@Brandon Monaghan I'd be also interested in seeing if you ever did this.  I've been thinking about doing the same thing but I know there are a lot of challenges to look out for. 

I responded and asked questions on a similar thread. My question here is would it be legal to purchase an empty plot of land, let's say five acres. And then put a mobile tiny home on it? I have heard that there are minimum sq. footage requirements? I have also heard that it's easier to just drop a mobile tiny home in your backyard if the property already has a home on it as it's just a trailer. 

@Brandon Monaghan I'd love to see if you were able to successfully implement your plan. Amazon just started listing tiny homes that you can buy and they ship to you, and I thought that it would be creative to start a real estate portfolio in the VR category. 

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