Tiny Homes rental properties

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Tiny Homes rental properties

Janea L.
New to Real Estate · Member since 2023 · 60 posts · 21 votes

I don't know much about the tiny homes market. I was reading the Bigger Pockets Beginner's Guide to real estate investing about investment vehicles. Tiny Homes weren't mentioned. I'm curious about your thoughts on Tiny Homes as a Real Estate Investment opportunity. Are there any good resources you would recommend to get started?

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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
Quote from @Janea L.:
Quote from @Michael Baum:

Hey @Janea L., tiny homes aren't considered real property (unless they are on a foundation) so investing in them can be problematic.

You can't use a mortgage for a tiny home, only for the property. So you would have to use cash to build out the property to support the tiny home.

Oh okay that's good to know. I didn't realize that mortgage pertained to the property. I'm assuming based on the state a dual property tax would be required including the tiny home. Thanks for this info. 

I just want to clarify to make sure you see what I am saying. You should be able to finance the land. You might be able to include the improvements that will be required like sewer/septic, water and electrical stubs for the buildings.

It's the tiny home itself that won't be covered by the mortgage.

Now like @Rachel H. said, you can check with the manufacturers to see what they offer for financing if you don't have the cashola.

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    3y

    I don't care for them. I would never stay in one.

    I like 4 bedrooms or bigger for a vacation rental. 

    0Reply
  • Sarah KensingerPro Member
    Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
    3y

    Depending on the area your thinking of setting up a tiny home, they can be huge hit! But it has to be modern and sleek to catch people's attention. Container homes are some of the biggest novelties right now and people love staying in them and posting about it on social media.

    [email protected]330-557-3021
    1Reply
  • Yael Lederman
    Miami, FL · Member since 2022 · 83 posts · 68 votes
    3y

    I've heard of folks having success with container homes. The tricky part for me is that its difficult to find comps and therefore be able to run an accurate analysis to understand whether it makes sense. 

    1Reply
  • Brett Deas
    CO · Member since 2022 · 588 posts · 426 votes
    3y

    For our Tiny home properties we always include 2 or 3 per rental listing. That way you can have multiple people staying in the same rental but not feel cramped. The prices are cheap enough to where it works. 

    1Reply
  • Brooklyn McCarty
    Investor · Member since 2022 · 1k+ posts · 754 votes
    3y

    I think this depends on your area/market and if you’re going to do it, you have to really go all in. 

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Hey @Janea L., tiny homes aren't considered real property (unless they are on a foundation) so investing in them can be problematic.

    You can't use a mortgage for a tiny home, only for the property. So you would have to use cash to build out the property to support the tiny home.

    1Reply
  • Rachel H.
    San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
    3y

    @Janea L. If there's a community with tiny homes in your area and people are living there, then it shows there's a market for it. You'll have to learn the market and talk to people who are working in the industry. In these types of communities, there should be a site manager and maintenance team similar to manufactured home communities which I specialize in. 

    Also, you can talk to tiny home dealerships in your area. They may be able to give you more insight into the market including the supply and demand for this asset type. 

    Hope that helps! 

    1Reply
  • Janea L.
    OP
    New to Real Estate · Member since 2023 · 60 posts · 21 votes
    3y
    Quote from @John Underwood:

    I don't care for them. I would never stay in one.

    I like 4 bedrooms or bigger for a vacation rental. 

    It does depend on a person's preference for rentals. I would imagine if it was a solo vacation it might be more appealing for some people and of course location plays a big role. 
    1Reply
  • Janea L.
    OP
    New to Real Estate · Member since 2023 · 60 posts · 21 votes
    3y
    Quote from @Sarah Kensinger:

    Depending on the area your thinking of setting up a tiny home, they can be huge hit! But it has to be modern and sleek to catch people's attention. Container homes are some of the biggest novelties right now and people love staying in them and posting about it on social media.

    Right,  I have seen some really great options on social media that are very  aesthetically appealing. I agree they need to be top of the line.

    0Reply
  • Janea L.
    OP
    New to Real Estate · Member since 2023 · 60 posts · 21 votes
    3y
    Quote from @Yael Lederman:

    I've heard of folks having success with container homes. The tricky part for me is that its difficult to find comps and therefore be able to run an accurate analysis to understand whether it makes sense. 

    I didn't realize they were called container homes. Glad I know the lingo a little better. That is a really great point about the comps. I wondered how to do it accurately. Maybe based on location and other short term rental properties that are comparable in size and quality? 
    0Reply
  • Janea L.
    OP
    New to Real Estate · Member since 2023 · 60 posts · 21 votes
    3y
    Quote from @Brooklyn McCarty:

    I think this depends on your area/market and if you’re going to do it, you have to really go all in. 

    I'm not 100% sure that this would be part of my strategy but I do want to do short term rentals. 
    0Reply
  • Janea L.
    OP
    New to Real Estate · Member since 2023 · 60 posts · 21 votes
    3y
    Quote from @Michael Baum:

    Hey @Janea L., tiny homes aren't considered real property (unless they are on a foundation) so investing in them can be problematic.

    You can't use a mortgage for a tiny home, only for the property. So you would have to use cash to build out the property to support the tiny home.

    Oh okay that's good to know. I didn't realize that mortgage pertained to the property. I'm assuming based on the state a dual property tax would be required including the tiny home. Thanks for this info. 
    0Reply
  • Janea L.
    OP
    New to Real Estate · Member since 2023 · 60 posts · 21 votes
    3y
    Quote from @Rachel H.:

    @Janea L. If there's a community with tiny homes in your area and people are living there, then it shows there's a market for it. You'll have to learn the market and talk to people who are working in the industry. In these types of communities, there should be a site manager and maintenance team similar to manufactured home communities which I specialize in. 

    Also, you can talk to tiny home dealerships in your area. They may be able to give you more insight into the market including the supply and demand for this asset type. 

    Hope that helps! 

    This is helpful. This gives me a place to start. Thanks!
    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y
    Quote from @Janea L.:
    Quote from @Michael Baum:

    Hey @Janea L., tiny homes aren't considered real property (unless they are on a foundation) so investing in them can be problematic.

    You can't use a mortgage for a tiny home, only for the property. So you would have to use cash to build out the property to support the tiny home.

    Oh okay that's good to know. I didn't realize that mortgage pertained to the property. I'm assuming based on the state a dual property tax would be required including the tiny home. Thanks for this info. 

    I just want to clarify to make sure you see what I am saying. You should be able to finance the land. You might be able to include the improvements that will be required like sewer/septic, water and electrical stubs for the buildings.

    It's the tiny home itself that won't be covered by the mortgage.

    Now like @Rachel H. said, you can check with the manufacturers to see what they offer for financing if you don't have the cashola.

    2Reply
  • Sarah KensingerPro Member
    Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
    3y
    Quote from @Janea L.:
    Quote from @Sarah Kensinger:

    Depending on the area your thinking of setting up a tiny home, they can be huge hit! But it has to be modern and sleek to catch people's attention. Container homes are some of the biggest novelties right now and people love staying in them and posting about it on social media.

    Right,  I have seen some really great options on social media that are very  aesthetically appealing. I agree they need to be top of the line.

    I'm not sure where your located or where your thinking of setting up a tiny home, but we have some companies that build and finance beautiful tiny homes and container homes here in Ohio. Check your area and maybe you have a company nearby also.
    [email protected]330-557-3021
    1Reply
  • Germán Rimoldi
    Investor · Member since 2022 · 55 posts · 14 votes
    3y

    I'd recommnend you these designs: getfoothold.com/tiny_homes

    0Reply
  • Janea L.
    OP
    New to Real Estate · Member since 2023 · 60 posts · 21 votes
    3y
    Quote from @Germán Rimoldi:

    I'd recommnend you these designs: getfoothold.com/tiny_homes

    Thank you!
    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Yael Lederman:

    I've heard of folks having success with container homes. The tricky part for me is that its difficult to find comps and therefore be able to run an accurate analysis to understand whether it makes sense. 


     Comps for sale ?
    Typical rent-ready 220-240 sqft container house is 40k-50k installed including bathroom,etc.

    What other information you needed ? In state of CA, there're only two approved vendors for this.

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    One thing on container homes. Check with the municipality before going to far down that road to see if they allow it.

    I think they are a super cool thing, but a lot of towns/counties are not enamored with them and have put some serious restrictions on their installation.

    It's kinda weird as they can be a great alternative if done correctly. I will say that making one nice and presentable can be a challenge so some communities have put moratoriums on them.

    0Reply
  • KiKi ChaseBusiness Member
    Real Estate Agent · Indianapolis, IN · Member since 2022 · 184 posts · 75 votes
    3y

    We don't personally have one, but I stayed in one in Nashville, TN and loved it! I also have an investor friend that has one, and has only had good experiences. I say go for it. :) 

    Brentwood Collective54 Reviews
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    1Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Michael Baum:

    One thing on container homes. Check with the municipality before going to far down that road to see if they allow it.

    I think they are a super cool thing, but a lot of towns/counties are not enamored with them and have put some serious restrictions on their installation.

    It's kinda weird as they can be a great alternative if done correctly. I will say that making one nice and presentable can be a challenge so some communities have put moratoriums on them.


    So I checked with this company that's selling move-in ready container house (and they look really beautiful really). How many buyers are buying without planning a permit. The sales guy said as much as 60% does not care about permitting :) I don't know if it's true or not. From design perspective, the container house could be more beauiful than a black box traditional ADU with one fifth of the cost.

    1Reply
  • Janea L.
    OP
    New to Real Estate · Member since 2023 · 60 posts · 21 votes
    3y
    Quote from @Sarah Kensinger:
    Quote from @Janea L.:
    Quote from @Sarah Kensinger:

    Depending on the area your thinking of setting up a tiny home, they can be huge hit! But it has to be modern and sleek to catch people's attention. Container homes are some of the biggest novelties right now and people love staying in them and posting about it on social media.

    Right,  I have seen some really great options on social media that are very  aesthetically appealing. I agree they need to be top of the line.

    I'm not sure where your located or where your thinking of setting up a tiny home, but we have some companies that build and finance beautiful tiny homes and container homes here in Ohio. Check your area and maybe you have a company nearby also.

     I will check that in my area. I'm on the Pacific Coast in Oregon. 

    1Reply
  • Janea L.
    OP
    New to Real Estate · Member since 2023 · 60 posts · 21 votes
    3y
    Quote from @Michael Baum:
    Quote from @Janea L.:
    Quote from @Michael Baum:

    Hey @Janea L., tiny homes aren't considered real property (unless they are on a foundation) so investing in them can be problematic.

    You can't use a mortgage for a tiny home, only for the property. So you would have to use cash to build out the property to support the tiny home.

    Oh okay that's good to know. I didn't realize that mortgage pertained to the property. I'm assuming based on the state a dual property tax would be required including the tiny home. Thanks for this info. 

    I just want to clarify to make sure you see what I am saying. You should be able to finance the land. You might be able to include the improvements that will be required like sewer/septic, water and electrical stubs for the buildings.

    It's the tiny home itself that won't be covered by the mortgage.

    Now like @Rachel H. said, you can check with the manufacturers to see what they offer for financing if you don't have the cashola.

    Thanks for clarifying. 
    0Reply
  • Janea L.
    OP
    New to Real Estate · Member since 2023 · 60 posts · 21 votes
    3y
    Quote from @KiKi Chase:

    We don't personally have one, but I stayed in one in Nashville, TN and loved it! I also have an investor friend that has one, and has only had good experiences. I say go for it. :) 


     Thanks for the encouragement. I would to stay in one myself. I probably should try that before investing. 

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Hey @Janea L.. Cool you are kinda close to me up here in WA.

    The Oregon coast is a bit tricky when it comes to STRs. There are pockets where it is legal and areas where it is not. Sometimes right next to each other.

    @AJ Wong is someone you can ping about it. He has a lot of data on the various areas where it is allowed and banned.

    0Reply
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