Tiny house rentals = Tiny seed capital?

14 Replies

After reading an interesting thread on raising seed capital for tiny houses, I got to wondering whether anyone has experience renting tiny houses? How much does it cost to build a tiny house on average? How much, realistically, could you expect to charge in rent given a tiny-house friendly neighbourhood? Is this viable considering today's push away from the excess? Are there any states that are more tiny house friendly, or is this purely a rural-urban argument?

@Trevor Seed I have been thinking of doing one myself. I can build one for 25-35k but thats me building it mostly myself with hourly labor. I estimate about 6-8 weeks per build at first but will get shorter after a few builds. My (tentative) plan is to place cards in the rentals for the renters to see and if they want one built I will build them one. (for a nominal fee of course with a deposit) I have seen retail prices range from 50k-150k for high end custom. Seems like a lot to pay for one but they are selling. 

I live in an area where we have heavy demand for seasonal workers and this concept has defiantly been on my mind.  I can pick up a 750 sq ft Amish built cabin shell for $20k, It will need basic electric/plumbing and cabinets/appliances. I could go a little further by adding HVAC and drop it on a 10k lot in town.  The other alternative is working with a nearby village to allow the creation of a village on some acreage nearby.  The first option will cash flow nicely.

@Mike Reynolds I think your sales process is quite innovative! What scale would you roll out on in terms of acreage and location? I was thinking about starting a suburb of sorts, Take a property development of 50 acres, subdivide into quarters and expand as it go's. 

Originally posted by @Trevor Seed :

@Mike Reynolds I think your sales process is quite innovative! What scale would you roll out on in terms of acreage and location? I was thinking about starting a suburb of sorts, Take a property development of 50 acres, subdivide into quarters and expand as it go's. 

My thought was a little different. I have some land in Galveston county on east Galveston Bay. It would be like an "rv" park but rented out through Homeaway and AirBnB. Inside I would leave flyers showing the models and a number to call me. If they wanted one I would reserve it for them with a deposit and build to suit. After it was built they could come inspect it and pay me and take it home. 

My thinking was this. If I build a couple of them I will have the models to look at but they will make money instead of being a tax write off. Worse case scenario is I get a few STR's for 60k. If a hurricane comes I just move them to higher ground. I can get feedback from my renters on what might be improvements they would like to see. Kind of grow it organically and see where it goes.

There are more than a few tiny home parks cropping up though. I have been keeping up with some of them. They are around trendy areas like Austin, Waco and Houston. There is a Texas manufacture that is making them for about 25k retail but they are mostly junk. They have to be permitted to haul and are built like the mobile homes of the '70's. They might work for a stationary park though but know what you are buying when you buy it. They might last ten to fifteen years if they were taken care of. I went on a 4 hour trip to look at some and walked away laughing at them. Wife and I did have a nice overnight in Dallas though where her brother lives so the trip wasnt wasted. 

I have always loved the manufactured home concept. I wonder if it would translate well internationally. Considering costs are much cheaper overseas, one would need significantly less seed capital. 

@Trevor Seed the issue with Manufactured homes in international homes is building codes and societal expectations. What country are you considering? They are cheap to build, and you would see relatively low seed capital requirements compared to other types of home construction.

I have a mobile home park under my belt. About a quarter of the units are rented. Others are leased land with purchased units sitting on them (We sold them the units). The rentals are fantastic sources of income for the park, and cost very little to build as we put our units through an assembly line style of building. The benefits of building in volume. 

I like that your last name is Seed and you keeping using the phrase “seed capital @Trevor Seed .

@John Krasner - had a similar convo with one of my partners last week. What’s your cost per unit in the assembly line?

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That is very observant of you @Jay Helms , I like the phrase, as it's easy to band about and it's near and dear to my heart. I enjoy talking about money, as I'm sure many of us here do, and I love starting investments!

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The one thing you have to be careful about is the mobile tiny homes some cities do not allow them except in a RV park. In Nashville, TN and the surrounding counties you can't live in a mobile tiny home on your own property. You can build a permanent structure that fit the square footage and live in it or rent it. I'm looking to do that in my neck of the woods. Half the property will be permanent structures and the other half will be a "RV" park but just for mobile tiny homes. At least that's what I'm going to try.

We have experience with small mobile living situations. I think with the cost of building one being so low, you may struggle to find people of means who would be willing to rent one of these. Mostly low income people who may not be the sort you'd want to rent to. That's just my opinion however, you may not mind renting to those circumstances.

@John Mainwaring Have you tried out a tiny house yet? I am a contractor, and have been very interested in the idea since I saw it on the tiny house show on TV. 

@John Krasner How did you get started with your mobile home park?

@Anna McGill Have you had any problems to speak of with Low income earners renting your accomodations?

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