Which of these two options would you do?

Question

One of our places is getting busy enough that it has me thinking that opening another (on the same property) would be smart.

Option #1 - Build a smaller-size cabin, less than 400 SF. [I would build it all myself except for septic]. Do not get a loan, but rather use proceeds from existing STRs to finance this. High-end finishes. I'm saying $40k for this.

Option #2 - Buy a premade shed and finish it off very high-end. Use their financing. (See pic)  Price $30-40k

Staying under 400 SF because that is where the cutoff for permits is. Meaning a lot less fuss to build something smaller. Thoughts?

Bruce Woodruff · Answer

You don't know me, but as a former custom home builder, you bet I'll do it right...and then some, You oughta see our other places! Next time you're out west, let me know!

John Underwood · Answer

Option 1. You could make it custom and nicer than anything premade.

Kristopher Blais · Answer

What is the timing and rent for both options?

That differential in time spent prepping to rent, multiplied by daily rate achievable is another factor to consider. E.g. - if the premade one is up and running a month faster, that's how much more in revenue? That additional revenue "reduces" initial expense.

Apples to Apples, I'd go option 1 any day. But there can be value in going the more direct route.

Please let us know what you end up doing!

Carolyn Fuller · Answer

Everyone else seems to be responding as investors. I'll respond as a guest who has stayed in Airbnbs not too dissimilar to this idea. I have given some of these places 5 star reviews and others really, really bad reviews. So assuming you'd like 5 star reviews, here are some pointers.

1) Whatever you do, PLEASE follow basic 1st world country building codes. I know each state in the US has their own building codes but the last log cabin kind of place I stayed was a huge health hazard with seriously uneven floors, antlers sticking out in the most unlikely spots doing their best to gouge an eye, and a dozen other kinds of tripping opportunities.

2) Put your heart and soul into the cabin, make it an expression of who you are and you will attract like-minded people who will love it.

Bruce Woodruff · Answer

I could pop in a couple windows real easy. I think the porch is big enough for the few people that would sit out there. They are usually too tired. But the views are nothing short of spectacular!

Bruce Woodruff · Answer

Good responses, thanks all!

@Liam Tennies you made me chuckle a bit.....of course there is a satisfaction in building a house yourself, but I might have done a few before.... now it's just more chiropractor visits :-)

Building #1 would  actually take 6 months, not only because it takes longer than a premade, but also because I want to pull the $$ out of incoming profits and not go the loan or savings route.

Liam Tennies · Answer

Kristopher has the correct response here. The difference maker is time to getting it rent-ready and listed. For example if you buy a premade shed and finish it within the next month, you could have it collecting revenue for the entire summer. If you go from scratch and do it yourself, it could take an extra couple months and you'd potentially be missing out on the highest revenue time of the year.

Other things to consider:

1. Do you value the idea of building something from scratch with your own two hands? If that sounds like a fun project and something you'd really like to do, then go for it.

2. What are the terms of the financing for the premade shed? Rates are higher now but I'd assume it's still better financially to go with option 2.

Lauren Kormylo · Answer

The pre made one is cute, but I think it needs larger windows for more light inside. And is that porch really usable?  It looks so narrow that you may not be able to sit and stretch your legs out. So I vote for building your own too.

Steven Foster Wilson · Answer

Option #1, unless the materials end up being way more expensive.

Which of these two options would you do?

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