All Forum Posts by: Andrew Wells

You could go with cost-plus-fee.  This is the same as cost-plus-percent, but, the GC will only make their fee if the project is way over or way under.  They also removes any incentive for the GC to present the three higher bids instead of three lower bids.  You are also not taking money out of his pocket by going with cheaper subs.  

The fee is going to vary by project.  I would budget 5% for a cheap GC or 10% for a good one.  

@Maura

Thanks for the great information!  I knew that this was not a revolutionary concept and am glad to hear that it is working out for a few different people who have replied to this thread. I agree with you that the main concern is location. I had one in mind but after researching the area more I'm concerned that my occupancy would be less than 50%.  Back to the drawing board!

Hi All,

Sorry for my absence.  I posted this and then decided it would be an awesome idea to move!  This is the first chance I have had to reply.

Wow! Lots of great feedback and I apreciate it all.  I would like to respond/clarify a couple of things...

• I agree that by building smaller the cost per square foot is higher, but, overall costs are less.  This is one of the biggest parts of my idea.  I would like to keep the overall costs lower.
• With a smaller build the operation costs (cleaning, landscaping, etc.) are also lower.
• Regarding more bathrooms...I agree with you! I don't know if I will consider it for this rental though.  Since I posted my original thought I have a better idea where I may build this.  When I look at the competition in the area most are larger old homes (read falling apart) with owners renting out a spare room, or, B&Bs with shared bathrooms.  The typical renter is a single family renting for 2-5 days.
• I still need to look into the min sqft requirement and short-term rental regulations for this area.

I don't disagree with your think big opinion. My economy of scale will come later when I invest in a few mor properties similar to this idea.  Also, by going new with everything I should have 5-7 years without major maintenance. 

Sounds like we are thinking the same way.  I also had the idea for a dedicated cleaning closet.  I thought that having it accessible from the exterior only would mean more controlled access and less temptation to guests. I like your website idea and giving a photographer a free stay for pro photos is a good idea too.  I hadn't thought of that.  

I am considering building a small "home" (1000-1200sqft) specifically for short term rental in a tourist destination area.  I am aware there are often minimum sqft requirements for a home but will cross that bridge later as I don't know where I would build this yet.  My idea is to build it on a somewhat secluded lot, two bed, one bath, normal amenities within driving vacation distance from a major metropolitan area.  The hook is...the style would be of a high-end hotel room (think Chicago/NYC) with the amenities of a home in a small footprint.  Long story short...I want to develop a premium rental with premium rates in a footprint that will keep costs very reasonable.  I would initially start booking with services like Airbnb, homeaway, etc. but would like to move away from that at some point...don't want to hitch my wagon to a single horse.  

I have not talked about this with anyone at this point, not even my wife.  I am looking for some initial feedback on this idea.  I could also use some pointers on developing a presentation for investors.