Investor · Austin, TX · Member since 2013 · 443 posts · 174 votes
In my area there is demand for land where people can park their tiny home, converted van, RV etc. People pay high rents as well from my research.
My area also has unincorporated off grid land that is in close proximity to the city (20-30 mins) This means I wouldn’t have to deal with coding ordinance issues but I would have to provide utilities.
Crazy idea. What if I bought some of this cheap land and installed a solar array, drilled a well and installed a septic tank. Im certain I could rent spots to people fairly easily.
The upfront and ongoing costs would be relatively low as I am not building a structure. Cashflow could be high as well. Keep the land long term and sell to developers as Austin expands.
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
4y
Who maintains the dirt road? Usually there are private agreements between the owners that are recorded as to a fee charged for having someone take a back hoe and scrape the road, clear downed trees, remove rubble from a storm. Four lots does not sound profitable for your idea. Think: build low income and maybe it can pencil out with the idea that development moves that way in 10 years and you knock them down
Septic permits here :https://www.traviscountytx.gov... engineered checklist alone is going to cost to find out if they would allow ( depends on soil) Do you know how many feet down is the water?
Find out from county what duplex or tiny house is allowed for construction today some permitting ideas here https://permittingatx.com/resi...
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
4y
What will septic cost $10000 - will one residential system be enough for people dumping tanks?
A permanent solar system with battery row $ 22000 ? Well $50 -200000 depending on how deep yo must go.
Call county for permit costs. On a dirt road or will you need to maintain or build a road?
To camp on BLM land it costs $5- $11 a night (they sometimes have a regular toilet bathroom). What can you charge ? What kind of view or fantastic hiking is nearby? You need an attraction like hot springs or something better than near the 'burbs.
How many sites are determined by how flat the layout is.
Investor · Austin, TX · Member since 2013 · 443 posts · 174 votes
4y
@Caroline Gerardo Not sure about all the costs yet, just doing research. I was thinking only 4 sites tops. Most of these unicorporated areas have dirt roads already. Its in close proximity of Austin and housing is in major shortage. I’m sure there would be an insurance cost.
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
4y
Who maintains the dirt road? Usually there are private agreements between the owners that are recorded as to a fee charged for having someone take a back hoe and scrape the road, clear downed trees, remove rubble from a storm. Four lots does not sound profitable for your idea. Think: build low income and maybe it can pencil out with the idea that development moves that way in 10 years and you knock them down
Septic permits here :https://www.traviscountytx.gov... engineered checklist alone is going to cost to find out if they would allow ( depends on soil) Do you know how many feet down is the water?
Find out from county what duplex or tiny house is allowed for construction today some permitting ideas here https://permittingatx.com/resi...
Thanks for the input! The land is outside austin city limits and unicorporated. No zoning. Only county permits and taxes. I think I would only need permit for septic from county.
I wasnt planning on building any structures. People would bring their own mobile tiny house/RV/van and park it. I would just provide utilities and a place to park. Any solar arrays I invest in could be dissasembled and sold off later or moved to another property.
Lets say I spend 80k on solar array, 50k on land, 10k Septic, 10k on a well, 10k land preperation/road maintainence. 10k on misc. My all in cost would be 170k. From what Ive seen people rent lots for $600 per month.
Thats $2400 monthly rents on a 170k investment and I didn’t even have to build a house. I dont know sounds decent to me but I could be missing something.
Ongoing monthly costs would be insurance, taxes, vacancy. Maintainnce would be minimal as its just raw land. Liability insurance is cheap, unincorporated land only pays low county taxes. Doubt expenses would be as high as renting an actual house to people.
I appreaciate you helping me with the cost aspect. I guess I need to dig more into that. I’m mostly just seeing If anyone has done anything similar.
I see this as a “commune” model that could be successful. The offgrid nature aspect would be popular with this type of tenant. I also aknoweldge this is a model of real estate investing that might not work anywhere but Austin.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
4y
@Joseph Weisenbloom Sounds interesting. If they stop paying rent will the county haul off their rv/van/tiny home? Who collects trash?
I read recently that one reason for the homeless problem is that boarding houses and the like have been torn down in cities and zoned out elsewhere. My inlaws rented a place with a shared bathroom down the hall while he finished his phd. I think they even had a baby, unheard of today.
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
4y
You would not want anyone to build anything permanent or they might claim some rights. Can you collect cash rents and go there frequently to check on the many issues? 600 seems untenable
Investor · Austin, TX · Member since 2013 · 443 posts · 174 votes
4y
@Caroline Gerardo Yea hopefully the dont build anything. Im not an expert but I don’t see how this model would be any different than mobile home or RV parks that already exist. I would do the management end of things. Collect cash? I usually use paypal, venmo or zelle for my other tenants.
@Marian Smith Yea trash collection would be an interesting predicament. I would assume the eviction process would be the same as evicting someone one from a trailer park. I need to research that. Not sure what this has to do with homeless people.
Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes
4y
Like where you're going on costs except for land/site prep. That will likely be higher due to needing to pave with aggregate to keep mud/dust down.
On the power, it may be just as cost effective to connect to the grid and much more reliable for the tenants. Could still add a BESS and PV array as well later to offset power costs and increase reliability.
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
4y
Hi @Joseph Weisenbloom. Have you placed a test ad for this to see if you get responses? That might be a helpful way to gauge whether there’s really a demand and what the best price point is. Then you could consider building to suit for those factors.
Investor · Austin, TX · Member since 2013 · 443 posts · 174 votes
4y
@Mason Moreland Thanks for the insight! There are no utilities available. Thats why the land is cheap. No power lines, water pipes or sewage lines anywhere close to this land. I see that as a opportunity though.
@Paul Moore I have not placed any ads. I got this idea from housing groups I work in. For my other reantals I find my tenants from housing groups on facebook and elsewhere. Lots of people were posting looking for land to park on with utilities in proximity to Austin. It got me thinking that I could meet that demand by providing utilities on cheap land. I know of other people doing this exact thing in their backyard closer to the city charging up to $1000 a month.
Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
4y
I'd say go for it. Can you do it all cash? Add in your property taxes for cash flow and it still should be a fine investment. Keeping in mind that the market is untested for annual, 5 year demand.
I've repped a tiny home community but in a city. It was quite painful dealing with code and orgs designed for SFR and large minimums. So outside limits sounds like a great solution.