Looking for more info on building STRs and good STR markets
New to Real Estate · Orange City, IA · Member since 2022 · 43 posts · 17 votes
Looking for more info on building STRs and good STR markets
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Realtor · Branson, MO · Member since 2018 · 274 posts · 283 votes
3yIf you're getting a loan to finance any portion of the project, figure out how you're going to pitch this to the bank. Also figure out the entitlement and regulatory environment where you're looking. I know some places seem very secluded, but still fall within county restrictions even if they're in the sticks. Don't forget to analyze competition. IF nobody is doing an STR remotely nearby, that may be a huge risk factor since the general traffic to that area is limited. Other than that, keep ideating and being creative and good luck.
9 Replies
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes3y
Secluded = Nothing to do
Find another strategy.
- New to Real Estate · Orange City, IA · Member since 2022 · 43 posts · 17 votes3y
Quote from @Paul Sandhu:
Secluded = Nothing to do
Find another strategy.
Maybe this is just me, but I desire going on vacation in secluded areas (at least, from other people). There's nothing like spending time enveloped in nature while being with the ones you love. And there are plenty of things to do such as hike, fish, bike-ride, swim, etc. So I'd have to respectfully disagree with your saying that "Secluded = Nothing to do".
- Germany · Member since 2020 · 46 posts · 21 votes3y
Hey Isaac,
I don't think what you're after is a bad idea. My brother-in-law is an architect and we're actually looking to do something similar. It is helpful to have an architect and an engineer on hand. Even if you just hire them to look over your idea. Architects are typically really good at understanding design, functionality, maximizing spaces (design), building codes, etc. The engineer comes into to play to ensure your design can be structurally built, make sure it falls within code, etc. You're probably better versed with the engineer side. I think the hardest/biggest hurdle to overcome when doing something like this is the permitting with the city/county youre dealing with. A lot of times you have to submit plans for the project, the permitting office reviews your proposals and then either gives you the green light, not necessarily to start building, but going ahead to submit your design/renderings of the actual property. Once both of those get the green light, you can then start with your contractors. I'm making this seem like a step-by-step process, but in reality a lot of these pieces are being put together at the same time in order to minimize delays in the building process. Of course with the permitting process come the fees to get the permits, so keep that in mind as well.
I think the business plan would work, as long as you know the whole process. I think a better approach would be to either partner with someone who has experience doing this or start off by purchasing a house fitting that secluded criteria first and see how that goes for you. Another option would be to volunteer your time with someone who has done this before or a company who does this. By volunteering, I mean reaching out to people/companies who do this and ask if you can help scope out potential properties for them, find deals that you can send to them, etc. Bottom line, bring them some sort of value and in exchange see if you can pick their brain on how they got started, their processes, etc. You never know, maybe you'll end up partnering with them :) You can even do this in the market you're currently living in. The process of getting permits, working with engineers/architects and so on is probably similar, the only thing that would be different are the actual codes themselves. Does that make sense?
I don't think there will ever be a "perfect" market. I think markets that rely heavily on tourism would do well with something like this. This is how I think of it...Orlando for example, people go there because they want to experience Disney and the various theme parks surrounding that area. People go there for EXPERIENCES. If you go on airbnb and search Orlando or Kissimmee you will find some pretty unique places. If you take your concept of building tiny homes/cabins and focus on creating a unique experience for your guest, then the market itself doesn't matter that much (I mean you don't want to build these in markets where no one visits haha). Joshua Tree is another example...people usually go there for the national park, but if you look at the places to stay there, each one is so unique and cool...you can have so many different experiences there by simply picking a different place to stay. They also have a bunch of tiny homes there! Always ask yourself how you can make your place stand out from the rest. The Robuilt and Real Estate Robinsons YouTube channels are pretty cool and somewhat in this space, check them out if you haven't already.
Good Luck! - 3yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Isaac Bartels:
Quote from @Paul Sandhu:
Secluded = Nothing to do
Find another strategy.
Maybe this is just me, but I desire going on vacation in secluded areas (at least, from other people). There's nothing like spending time enveloped in nature while being with the ones you love. And there are plenty of things to do such as hike, fish, bike-ride, swim, etc. So I'd have to respectfully disagree with your saying that "Secluded = Nothing to do".
Sin e you mentioned fish and swim you must plan on being close to a body of water. That is a big difference from just being in the woods and will appeal to more people.
- Realtor · Branson, MO · Member since 2018 · 274 posts · 283 votes3y
If you're getting a loan to finance any portion of the project, figure out how you're going to pitch this to the bank. Also figure out the entitlement and regulatory environment where you're looking. I know some places seem very secluded, but still fall within county restrictions even if they're in the sticks. Don't forget to analyze competition. IF nobody is doing an STR remotely nearby, that may be a huge risk factor since the general traffic to that area is limited. Other than that, keep ideating and being creative and good luck.
- So MD · Member since 2019 · 294 posts · 191 votes3y
Couple key points to think through: 1) Will you be keeping the tiny homes on their axles or installing them on foundations? Will drive the permitting needed. 2) Infrastructure costs for raw land. Building access to an undeveloped parcel will cost about the same whether it's for a tiny home or a 10 BR cabin. Huge difference in absorbing the cost into the resulting income. Same with power and water. Might be an easier start up to find an old farm an redevelop that. 3) Design. Doing you own CAD design sounds like fun. It would let you draw from your contractor on the real costs and use their experience in the design phase. If it's going on a foundation, I would expect most jurisdictions to require stamped plans. I designed a spec house with a CAD guy. His software had the building code specs built in and he had an Architect colleague review and stamp the final. If you're designing a tiny house, your design process will duplicate what current tiny house firms have already figured out. Worth it? 3) Locations. Agree totally with the prior posters. What would draw people to the area? Either find lake property or be near/in a National or State Park, Forest Service, BLM, or Nature Conservancy land. Find an area with public equestrian trails, add decent living space, a paddock with a run in shed, enough room to park a horse trailer and you would have a very underserved market. Likewise check out other niche activities like white water rafting, birding, wine trails, etc. Many locations would work but you'll need enough of a basic plan to be able to discuss the local governments to feel out the best area to build. Congrats on thinking about your plans while you are in school. You're already ahead of the game. Best wishes!
- 3yJoseph CacciapagliaBusiness MemberLender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
I love the idea, but have found the execution to be difficult (for my skill set). I'm just finishing up a container home build to use as an STR. It's on a wooded lot, but in San Antonio. I had originally planned for it to be a tiny home, but ran into deed restrictions that made me pivot. I've had a ton of issues with the build, which caused over a year of delays, but should have it done shortly.
I chose something close to town to ensure plenty of guest demand. I think it may be difficult to make it work if you're too secluded. Guests need to be searching in the area in order to find you.
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Hey @Isaac Bartels, so I am a bigger fan of a full sized home. I think the tiny home thing is interesting but it takes a certain person to want to stay there. Everyone can use a house.
Also, most tiny homes don't qualify as real property. More like a travel trailer.
- 3yCole SchlackPro MemberRealtor · Hawaii, HI · Member since 2015 · 145 posts · 95 votes
I think the idea is sound but you do need the right place, I suggest Hawaii, it may sound to expensive, but its not. You can purchase land in the 100-200k range near oceans/beaches that could work for Tiny houses or I recommend looking at Glamping options to start to reduce your risk and make the process easier.
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