Leasing tiny homes.. Another strategy..

Leasing tiny homes.. Another strategy..

J. MartinPro Member
Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes

I've been looking into the possibility of tiny homes, airstream, or something similar as an AirB&B spot to plop down somewhere... Interestingly, someone has got creative, and is leasing out their tiny home to someone who wants to put it on their own land.. $700/mo to rent w/ 1 year lease, and $2/mile delivery fee from down near Santa Cruz, for a 175 sq ft tiny home. So you don't have the up-front cost of purchasing, and what to do with after..

In theory, a building like this could generate income off land/space that is underutilized and has a very low or zero marginal cost. Maybe a small community of these on a lot would be enough to pay basic expenses, and could free up time to go find and make some great RE deals..

@Al Williamson , have you heard of such crazy ideas..?

Anyone else doing short-term rentals on smaller, non-conventional spaces..?
I was also looking at a live-aboard boat as a potential AirB&B, but don't know anything about boats, and maintenance costs..

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Real Estate Investor · Houston, TX · Member since 2010 · 499 posts · 206 votes
12y

Why not just rent RVs?  You can buy them for a few thousand and they're already set up to maximize space and usefulness.  I rent them as residences, not as vacation property.  I have 6 now.

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  • Investor · San Francisco, CA · Member since 2014 · 577 posts · 203 votes
    12y

    I happen to like hugging trees!

    So I hope it doesn't go out of style ;-)

  • Investor · San Francisco, CA · Member since 2014 · 577 posts · 203 votes
    12y

    Yes, I think we all know, it depends on market supply and demand.

  • Investor · San Francisco, CA · Member since 2014 · 577 posts · 203 votes
    12y

    @Lynn Currie Beautiful!

  • Waukesha, WI · Member since 2014 · 1 post · 0 votes
    12y

    Just two days ago, I was imagining a tiny house village outside of the city covered in trees.

    Q: Would  tiny homes under the legal size of habitat stucture, be subject to same standards/compiablility issues mentioned with hotel fees, lot limits, and # restrictions?

    Or would it be possible to structure an association with membership costs rather then renting the units?  Dallas buyers club?

    I think renting nice units(membership) for 500/month would work pretty well.  and help alot of people save money while providing a great community.

  • J. MartinPro Member
    OP
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @Christopher Winkler:
    Originally posted by @Belinda Lopez:

    The "Tiny House" movement is the next BIG thing!  There's even a show on cable called Tiny House Nation that chronicles the build process and transition process that individuals and families encounter in choosing to move to a Tiny Home.  Like others have pointed out, it's a lifestyle choice, not always driven by finances.  

    To each his own; I have watched one of the shows, and I can't understand why anyone would want to live in such a small space. Unless you are a broke tree hugger who can't afford a home, It appears to be just another fad, like beards that will eventually die and fade away. 

    The comments to live in a RV also make sense if you are into it, though you pretty much have to give up 90% of your possessions, clothes, etc. Give me space and room for my stuff! 

     Some people believe the best things in life aren't things..

    And I have a beard Christopher! lol

    I understand though. I don't think I could do it permanently.. Camping/vacation though, yes.

  • J. MartinPro Member
    OP
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @Account Closed:

    I happen to like hugging trees!

    So I hope it doesn't go out of style ;-)

     @Anja Brey , where is Chad!?!

    For those who do not know, Chad, who I think will be at the meetup tonight in Oakland is an award-winning tree climber! Not sure about hugger.. But yes, there is a hippy vibe that goes with tiny living I think for a lot of people.

    Again, , THE BEST THINGS IN LIFE AREN'T THINGS

  • J. MartinPro Member
    OP
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @Lynn Currie:

    @J. Martin 

    I have an Airstream that I rent out a few times a year - Austin City Limits Music Festival and SXSW primarily. I've considered others, but haven't bothered doing it yet. I have land 1/2 mile from downtown so I can supply water and electric. Black/grey water is a bit of a pain, but it's manageable for the money that we're able to make in a short time.

    This photo is obviously at the office, but I never miss an opportunity to show a photo of my Little Silver Beauty.

     Awesome!! That's literally exactly what I was looking for on CL the other day... The small airstream.. Is that 20' or something..? I think this thing would kill as an AirB&B unit on our back patio near Lake Merritt.. I don't suppose you're in the market to sell and can strap it to the plane when you're out here in November can you...? lol

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y

    In the counties in CA I'm familiar with you'll run into permitting issues.  Most do not allow you to park an RV for residency.  There are special permits for farm worker housing, temporary office space, and temporarily living in an RV or MH during construction.  It is not legal to just park a Cavco Cabin (which looks and feels like a house on a trailer and has an RV tag) in a backyard or even an empty lot in Berkeley.  

    Any alternative housing (not stick built with foundation) will require a special use or conditional use permit, regardless of zoning.....which is so hard to get without a legit reason.  Cheap infill is not a reason.  :)

    Ask anyone who has an RV or yurt or any alternative housing in CA if they are fully permitted.  Ask me how I know.  

  • J. MartinPro Member
    OP
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @Account Closed:

    In the counties in CA I'm familiar with you'll run into permitting issues.  Most do not allow you to park an RV for residency.  There are special permits for farm worker housing, temporary office space, and temporarily living in an RV or MH during construction.  It is not legal to just park a Cavco Cabin (which looks and feels like a house on a trailer and has an RV tag) in a backyard or even an empty lot in Berkeley.  

    Any alternative housing (not stick built with foundation) will require a special use or conditional use permit, regardless of zoning.....which is so hard to get without a legit reason.  Cheap infill is not a reason.  :)

    Ask anyone who has an RV or yurt or any alternative housing in CA if they are fully permitted.  Ask me how I know.  

     I missed you K! How are you?

    I do want to know how you know. Maybe offline. I hope you're coming up in Nov! Would love to say hi in person!

    And it's not exactly residency.. more like an office.. I just can't control if someone dozes off..

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y
    Originally posted by @J. Martin:

    @Mel Selvidge ,

    Yes, yes, and yes!! Exactly!

    I was just going to start with one and fly below the radar.. But all great points to bring up with all the laws and regulations and what not.

    The below the radar thing is likely your only option in the Bay Area.  One thing to be mindful of is you are combining non-permitted housing with the landline that is airbnb (and other services like it).  Counties and cities are trying to find ways to collect hotel tax and/or license hotel-like housing. If they have their way and require licensing, airbnb will likely have to comply and not list properties that aren't licensed.  Then you'll likely not be able to continue to have non-legal housing on your property as you wouldn't want to open yourself up for that kind of scrutiny.

    I love airbnb and my daughter makes good money using it to rent her Berkeley studio part time (15 days a month).  But I think its days as an unregulated and open service are numbered in many munis of the US (especially Bay Area!).  Just my opinion of course.

  • J. MartinPro Member
    OP
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @Account Closed:
    Originally posted by @J. Martin:

    @Mel Selvidge ,

    Yes, yes, and yes!! Exactly!

    I was just going to start with one and fly below the radar.. But all great points to bring up with all the laws and regulations and what not.

    The below the radar thing is likely your only option in the Bay Area.  One thing to be mindful of is you are combining non-permitted housing with the landline that is airbnb (and other services like it).  Counties and cities are trying to find ways to collect hotel tax and/or license hotel-like housing. If they have their way and require licensing, airbnb will likely have to comply and not list properties that aren't licensed.  Then you'll likely not be able to continue to have non-legal housing on your property as you wouldn't want to open yourself up for that kind of scrutiny.

    I love airbnb and my daughter makes good money using it to rent her Berkeley studio part time (15 days a month).  But I think its days as an unregulated and open service are numbered in many munis of the US (especially Bay Area!).  Just my opinion of course.

     Yes, below the radar..

    I agree, all city needs to do is set up an account and start browsing through AirB&B. But that's part of the nice thing about having a home on wheels ;) what home? exactly!

  • Real Estate Agent · Berkeley, CA · Member since 2014 · 55 posts · 40 votes
    12y

    It's all fun and games until your guest gets busted for vagrancy at 3 a.m.  ;-) 

    Although getting building permits in Berkeley is a glacially paced, NIMBY-centric nightmare, there is probably a way to do something tiny up to code and get a lot of positive free publicity for it too.  Just about everyone agrees that density in town is good, but there are a lot of people that are really anti-tall-building, so tiny is really the only way to get density without height.

    This shipping container commercial "village" is slated to be created near my house.  A more recent article said that permits were being reviewed this month.  It will be interesting to see how it goes.

  • Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
    12y
    Originally posted by @Account Closed:

    I happen to like hugging trees!

    So I hope it doesn't go out of style ;-)

     I do too Jon, trees are good things, I am just making  an analogy to the type of people who would want such a show box to live in, and everyone, please don't take the beard thing personal, its just amazing to see at least 1/2 of the men in America with a beard. I remember my first sighting about 7-10 years ago. I saw a teller @ my bank with a beard and said what's up with the beard?For most of my life, they were for the most part NOT fashionable. Plus facial hair does make one look older, so FYI...

    Actually I am jealous, because @ 55, I still can't get more than a Ho Chi Minh beard, and BTW, my wife is from Viet Nam...

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y
    Originally posted by @Mel Selvidge:

    It's all fun and games until your guest gets busted for vagrancy at 3 a.m.  ;-) 

    Although getting building permits in Berkeley is a glacially paced, NIMBY-centric nightmare, there is probably a way to do something tiny up to code and get a lot of positive free publicity for it too.  Just about everyone agrees that density in town is good, but there are a lot of people that are really anti-tall-building, so tiny is really the only way to get density without height.

    This shipping container commercial "village" is slated to be created near my house.  A more recent article said that permits were being reviewed this month.  It will be interesting to see how it goes.

    Man, "glacially paced NIMBLY-centric nightmare" says it all with five words.  IMO tiny size or mobil or alternative construction is not the issue.  It's taking existing zoning and adding density to it.  Existing single family residence zoning isn't going to turn into 2-unit zoning without a fight.  At least if you demo and propose new construction with multiple tiny units, you are supposedly proving to the zoning and permitting boards that it won't "ruin" the neighborhood character.  And hopefully you're throwing in a bunch of design, energy and environmental positives to show that the proposal is small foot print for so many more people.  That being said, the quicker, perhaps less frustrating angle to take with getting a permit for an additional mobil or prefab unit might be the MIL/granny unit angle.....no kitchen.   

  • Real Estate Investor · CA · Member since 2009 · 174 posts · 39 votes
    12y

    Too ad to KMP's cautions , you best check the CCR's before a neighbor takes a bite out of you!

  • Engineer · Lawrence, KS · Member since 2014 · 13 posts · 3 votes
    12y

    It's so interesting to see this posted today.  I was literally thinking about the tiny house movement yesterday in light of all the things i've been learning here at BP.  I only recently found out about the tiny house movement this year, and I have to say that it fascinates me!  I don't know if it's the life style for me, but I could really see it's popularity catching on in the right market.

    Reading all the posts here have really got my creative juices pumping on this.

    I think it would be really fun to develop a tiny house community here in my home town; buy a large property in town, build a number of tiny homes creatively on the property, rent out the homes like you would an apartment complex (i don't want to say trailer park).  I could see endless ways to make this appealing and marketable to the right people.  And there could be allot of room to have fun with it too.

    You could probably build 2-5 tiny homes for the same cost as purchasing a middle class single family home at market value.

    Just so much to think about...

  • Investor · Rocktown, IL · Member since 2012 · 238 posts · 69 votes
    12y

    @Ben N. and @J. Martin 

    Thinking about size and cost.

     For comparison, standard US hotel rooms are typically in the 275 - 325 SF range.   Tiny houses range in size, but at 200 SF you are on the big end -- you hear 150 SF mentioned a lot.  So your tiny house might be about half the size of a hotel room.  

    For tiny house owners, total costs are said to average about $23,000 -- but that's essentially material only , for the folks that self-construct.  I've also read some average total costs in the 40,000 to 60,000 range counting labor.   (I get that some people have no more than 8 or 10K in theirs, but how repeatable would that be for 5 or 10 units?  And they would be noticeably low-end.)   There's not much -- read zero -- economy of scale here.  Even if you build 10 of them you've only got about 1500 SF...  So, you're going to see some nutty sounding $/SF costs.  

    Maybe a modular company could knock out the shells on the trailer chassis units.

  • Involved In Real Estate · My City, NJ · Member since 2013 · 181 posts · 81 votes
    12y
    Originally posted by @J. Martin:

    I've been looking into the possibility of tiny homes, airstream, or something similar as an AirB&B spot to plop down somewhere... Interestingly, someone has got creative, and is leasing out their tiny home to someone who wants to put it on their own land.. $700/mo to rent w/ 1 year lease, and $2/mile delivery fee from down near Santa Cruz, for a 175 sq ft tiny home. So you don't have the up-front cost of purchasing, and what to do with after..

    In theory, a building like this could generate income off land/space that is underutilized and has a very low or zero marginal cost. Maybe a small community of these on a lot would be enough to pay basic expenses, and could free up time to go find and make some great RE deals..

    @Al Williamson , have you heard of such crazy ideas..?

    Anyone else doing short-term rentals on smaller, non-conventional spaces..?
    I was also looking at a live-aboard boat as a potential AirB&B, but don't know anything about boats, and maintenance costs..

    Jmartin, 

       I had an idea to so something similar, short term Airbnb.

     I have a 36' Travel trailer with a slide out that has a master bedroom with queen bed, a triple bunk room at the rear, full bath & kitchen, heat & air that sits most of the time. It's a 1993 and defy anyone to come and point out any wear or worn areas or items, it's in near new condition. I have a couple of acres and can easily set up an area for short term camping basically in my back yard. I'm an hour away from NYC. I'm in an area of natural beauty, lakes, waterfalls, orchards, wineries, mountains & the Appalachian Trail. Locally you could find a cheap motel for $60-70 a night, but a camping set up would be more in tune to what people come out here for. My trailer in it's own private spot would be much more attractive over a motel room and the crowded state park camping... and besides it would already be ready to occupy, no need to set up camp. I'm thinking $100 a night, $125 each for Friday & Saturday to include fire wood. I thought to do Airbnb and maybe direct advertising to NYC area Craigslist. It's just a thought that crosses my mind now and again, could even have my kids run it as a business, do the cleaning & set up. I can easily see $600-800 a month coming in a good part of the year from this.

  • J. MartinPro Member
    OP
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @George C.:
    Originally posted by @J. Martin:

    I've been looking into the possibility of tiny homes, airstream, or something similar as an AirB&B spot to plop down somewhere... Interestingly, someone has got creative, and is leasing out their tiny home to someone who wants to put it on their own land.. $700/mo to rent w/ 1 year lease, and $2/mile delivery fee from down near Santa Cruz, for a 175 sq ft tiny home. So you don't have the up-front cost of purchasing, and what to do with after..

    In theory, a building like this could generate income off land/space that is underutilized and has a very low or zero marginal cost. Maybe a small community of these on a lot would be enough to pay basic expenses, and could free up time to go find and make some great RE deals..

    @Al Williamson , have you heard of such crazy ideas..?

    Anyone else doing short-term rentals on smaller, non-conventional spaces..?
    I was also looking at a live-aboard boat as a potential AirB&B, but don't know anything about boats, and maintenance costs..

    Jmartin, 

       I had an idea to so something similar, short term Airbnb.

     I have a 36' Travel trailer with a slide out that has a master bedroom with queen bed, a triple bunk room at the rear, full bath & kitchen, heat & air that sits most of the time. It's a 1993 and defy anyone to come and point out any wear or worn areas or items, it's in near new condition. I have a couple of acres and can easily set up an area for short term camping basically in my back yard. I'm an hour away from NYC. I'm in an area of natural beauty, lakes, waterfalls, orchards, wineries, mountains & the Appalachian Trail. Locally you could find a cheap motel for $60-70 a night, but a camping set up would be more in tune to what people come out here for. My trailer in it's own private spot would be much more attractive over a motel room and the crowded state park camping... and besides it would already be ready to occupy, no need to set up camp. I'm thinking $100 a night, $125 each for Friday & Saturday to include fire wood. I thought to do Airbnb and maybe direct advertising to NYC area Craigslist. It's just a thought that crosses my mind now and again, could even have my kids run it as a business, do the cleaning & set up. I can easily see $600-800 a month coming in a good part of the year from this.

     Ya, put it in a secluded spot, with a campfire right outside, some nice chairs, maybe a hammock, some bicycles if there are little roads or baths to ride down, Frisbee, horseshoes, washers, or whatever people like out there. A boombox that can play music from their phone.

    You just make it an attractive "lifestyle" getaway in the country where they can relax, go have some fun, sit by the campfire, but not have to prepare and load up on everything like for a camping trip..

  • J. MartinPro Member
    OP
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @Account Closed:
    Originally posted by @Mel Selvidge:

    It's all fun and games until your guest gets busted for vagrancy at 3 a.m.  ;-) 

    Although getting building permits in Berkeley is a glacially paced, NIMBY-centric nightmare, there is probably a way to do something tiny up to code and get a lot of positive free publicity for it too.  Just about everyone agrees that density in town is good, but there are a lot of people that are really anti-tall-building, so tiny is really the only way to get density without height.

    This shipping container commercial "village" is slated to be created near my house.  A more recent article said that permits were being reviewed this month.  It will be interesting to see how it goes.

    Man, "glacially paced NIMBLY-centric nightmare" says it all with five words.  IMO tiny size or mobil or alternative construction is not the issue.  It's taking existing zoning and adding density to it.  Existing single family residence zoning isn't going to turn into 2-unit zoning without a fight.  At least if you demo and propose new construction with multiple tiny units, you are supposedly proving to the zoning and permitting boards that it won't "ruin" the neighborhood character.  And hopefully you're throwing in a bunch of design, energy and environmental positives to show that the proposal is small foot print for so many more people.  That being said, the quicker, perhaps less frustrating angle to take with getting a permit for an additional mobil or prefab unit might be the MIL/granny unit angle.....no kitchen.   

     Yes, from what I understand, in Oakland, you can plop down a 500 sq ft or less space to live in and the neighbors have no input. Right @Shiloe B. ?

  • Real Estate Agent · Berkeley, CA · Member since 2014 · 55 posts · 40 votes
    12y

    I've been having fun thinking about these and looking at some of the prefab options around.  (@J. Martin , this outfit is having a 2-day design/building workshop in Sonoma in a couple of weeks.)

    My bestie just downsized to a 1 BR house and built a studio in her back yard with a 1/2 bath and outdoor shower (next to the hot tub). The studio is not a dwelling, so she was able to get an OTC permit in Oakland. I suspect that if she rented it, she'd be courting trouble. On the other hand, if she rents out her house, it's just a regular VRBO rental of a legal SFR.

    Is there a city ordinance against camping in your own back yard?  I see that you can rent RVs for the purpose on AirBnB which is almost certainly illegal, but is it illegal if you stay there?  Maybe the "play" is to stay in the tiny house and rent the merely small one?

  • J. MartinPro Member
    OP
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @Mel Selvidge:

    I've been having fun thinking about these and looking at some of the prefab options around.  (@J. Martin , this outfit is having a 2-day design/building workshop in Sonoma in a couple of weeks.)

    My bestie just downsized to a 1 BR house and built a studio in her back yard with a 1/2 bath and outdoor shower (next to the hot tub). The studio is not a dwelling, so she was able to get an OTC permit in Oakland. I suspect that if she rented it, she'd be courting trouble. On the other hand, if she rents out her house, it's just a regular VRBO rental of a legal SFR.

    Is there a city ordinance against camping in your own back yard?  I see that you can rent RVs for the purpose on AirBnB which is almost certainly illegal, but is it illegal if you stay there?  Maybe the "play" is to stay in the tiny house and rent the merely small one?

     You are so on the ball Mel!! Yes, I thought of that. And while I like the "tiny home" idea, I don't want to live in one permanently right now in this location. If I had a big lot with outdoor space, garden, some privacy, etc.. I would give it a shot. But not on a concrete pad driveway in my backyard...

    Thanks for bringing up the workshop. Although I know the one thing I won't be doing is building it myself. No time for that kind of project right now. I would just buy or have my handyman build one, or go airstream route I think for the time being..

  • Investor · Rocktown, IL · Member since 2012 · 238 posts · 69 votes
    12y

    @Mel Selvidge 

    thanks for posting the link to the pre-fab...

    This brings up what I've been getting at in my other posts, and is one of the downsides of tiny houses -- cost.  If you're downsizing from your 500K home to your newfound lifestyle of freedom in a tiny house, the typical 60,000 dollar price tag may not matter much -- still very cheap compared to the 500K house.  But for some of these more creative ideas about building a community of tiny houses, etc -- I'm having trouble thinking that the numbers work.  (Not to mention that per my previous post, I'm still unconvinced of the incentive to RENT a tiny house).  The prices from your prefab post match with some of the general numbers I've read about what people are spending on their tiny house.  (BTW, The examples in your link look to be nicely done.)  But anyway, the math is eye-opening -- you will likely spend over $350/SF on a tiny house. 

    Also, I'm wondering what others might think of the rent possibilities -- for the 2% rule -- on a $60,000 tiny house you'd need to rent for $1200?

    Looked at another way, the village of 10 tiny houses @172 SF each totals a mere 1720SF for a price tag of $600,000. 

    It's also managing 10 tenants.

    And from a renters perspective........$1200/month for 172 SF?  Now that's some expensive self-deprivation.  

    @J. Martin 's idea sounds like just one tiny house, trailer, or spaceship hidden in his back yard..... ;-)....but for those thinking about a tiny house village, can the numbers really work?  

  • Contractor · Seattle, WA · Member since 2014 · 3 posts · 3 votes
    12y

    I think the lure with tiny houses has to do with OWNING a tiny home.  I see tiny homes as solution to low cost housing for those who might not otherwise be able to realize the dream of home ownership.  It is also a life style choice that makes more sense if you own as opposed to rent. It is also more than the tiny cost of ownership, tiny taxes, tiny insurance and tiny utilities all play a part in the "sizzle".

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y
    Originally posted by @Kurt F.:

    And from a renters perspective........$1200/month for 172 SF?  Now that's some expensive self-deprivation.  

    Your perspective might be because you live in Iowa and/or somewhere with a lower cost of living.  My daughter's studio in Berkeley is $1100/mo and is 220 square feet.  And she considers herself lucky to have it!  Living without roommates in hot rental markets comes at a premium, both in terms of cost and, and as you say, space deprivation.  Ask anyone in the Bay Area, especially in SF proper.  4 years ago, she rented a somewhat slummy unit in a very desirable neighborhood, hoping her mother would fix it.  (I did.)  She would love to live in 220 square feet with it's own 4 walls and patio/garden space.  And would pay even more rent for it if it existed.

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