The tiny home market is flourishing and is expected to grow in the next few years both locally and globally. It’s becoming a trend that a lot of people from all walks of life – students, big families, retirees – are starting to downsize their properties. Many are enticed to switching to small living with hopes of experiencing a plethora of benefits that come with a tiny home lifestyle.
With the headlines that they’re making, tiny houses are appealing not only to potential homeowners but to real estate investors as well. The space may have gone a lot smaller, but the opportunities are never limited. In fact, you might just have found the perfect industry if you’re looking to find profits! Here we’ve rounded up ways and tips on how you can bring in extra cash through investing in tiny homes.
6 Ways You Can Make Money from Tiny Homes
1. Build for Yourself
If you want to cut costs on your finances, then building a tiny home for yourself is never a bad idea. As you might already be aware, building a tiny house is much more affordable to build compared to a traditional living space. Just imagine the difference of having to cover less than 500 square feet of space in comparison to a regular-sized home which normally occupies around 2,500 square feet.
But apart from that, a tiny home lifestyle means that you can cut costs on your living expenses and utilities – electricity, water, and maintenance. Not to mention the financial freedom that you can gain. Although you can’t directly earn from it, you’ll be able to maximize your savings. This way, you can allocate funds for other investments. You’ll never know, downsizing your living space could also be the solution to paying off all your debts (if you have any). Statistics reveal tiny homeowners commonly have more savings and less debt as compared to average Americans.
2. Rent Out the Property
Aside from building a tiny home for yourself, one of the common ways that you can profit from this property is by putting it on lease. If you have tenants that rent out your space, you can count on getting a monthly income without requiring an intensive day-to-day involvement. It’s definitely a good real estate investment strategy with a high ROI.
3. Invest in Vacation Rentals
Gone are the days when hotels, yurts, lodges, and RVs are the only types of accommodations that dominate a traveler’s options. Now that tiny homes are growing in popularity, a lot of real estate investors are also making extra cash by turning their small houses as vacation rentals.
Many Millennials nowadays crave some unique experience and staying in an unconventional space can definitely fulfill that. Try hosting your tiny home on Airbnb so interested clients can easily reach you. Additional services such as spa, free meals, and etc. are also a good idea if you’re looking for ways to attract more customers.
4. Start a Tiny House Flipping Business
Buy, build or renovate, and sell – that’s basically how the business of flipping real estate works.
If you’re wondering if the same strategy can be applied in the tiny home industry – then the answer is a big yes! There are two ways by which you can become a tiny house flipper.
First is the most common, which involves buying a tiny house and then renovating the property before reselling. The good thing about this is it’ll require lower costs since the area is relatively smaller. In effect, your risks are also less. The best part? With the rising demand that tiny homes are generating all over the world, you won’t have a hard time selling them. In fact, homeowners might be the ones who’ll come hunting for them. Some people who are into this type of business can flip homes every 3 or 4 months. Faster time of selling plus lesser risk – these are a few edges that tiny houses have over regular residential properties.
Another approach is by purchasing a mobile home park and transforming it into a tiny house unit. Simply renovate the area, restyle, and add a few elements if you’d please. Then you’re off to selling the upgraded property at a greater profit margin.
5. Transform Your Tiny House into a Retail Store
Yes, that’s right! Tiny houses are not only ideal for residential purposes, but they can also be used to put up a small business. If you’ve got a trailer or a tiny home on wheels, much better. This way, you can easily bring your portable store anywhere you go! It can be a great way to promote your shop during events. There are also tiny-houses-turned-coffee-shops that spark interests among customers.
6. Rent Out Land
Do you have a piece of land that’s sitting empty without a building? Try renting it out to tiny homeowners! Contrary to the previous items, this strategy does not find opportunities in buying or building small houses. But instead, land investment is the key. Since tiny living means small spaces, you can even split the areas to multiple homeowners.
8 Tips to Maximize Your Income from the Tiny House Market
1. Determine Your Potential Customers
In any type of business, one of the most important factors to consider when selling a product or service is your target market. Who are you trying to reach? If you’re looking to invest in a vacation rental, then try asking the locals about the type of tourists that visit their town – whether couples, families, students, etc.
Understanding who will most likely be interested in renting out your space (including their needs and interests) can guarantee that your rental property will never be empty. It will also help you in identifying the most ideal type of tiny home to build. Even the suitability of home interior design can play a role in bringing in more customers.
2. Choose an Ideal Location
There’s gold in knowing where to strategically put up an investment property. For your tiny home, pick a good location that your prospects will find ideal. Say for instance you decide on targeting hikers. In this case, it’ll be a step in the right direction to build treehouses near the tranquil areas of the mountains. But if you opt for tourists who like to enjoy the buzz and fuzz of the city, then trailers close to town are your best choice. Or go for a luxurious Escher, specially designed for a family of three.
If you already have a particular area in mind, try consulting with an expert when it comes to real estate investments. They can provide information regarding locations or land areas that are worth investing in.
3. Build Connections
Word of mouth is the not-so-secret weapon to promote a business, including tiny homes. While you’re in the process of hunting for the perfect location, make it an opportunity to get connected with the local inhabitants as well. This way, they can refer your tiny house rental to potential guests asking around.
You can gain traction through partnerships with local businesses, stalls, and shops! Are there stores that you think your prospects are most likely to visit? Try to negotiate if they can put up an ad poster of your tiny home rental in exchange for their coupons.
4. Take Advantage of Social Media
As much as building relationships with the local community matters, it is equally important to strengthen your online presence as well. Social media is a powerful platform that allows tiny home investors to widely reach their target market. Ask your guests to leave reviews or share their experiences on their social media accounts. It’s much better if pictures go along with the posts to garner more interest among their networks.
5. List Your Tiny Home on Rental Property Websites
Let your customers find you when they search for rental options online. Airbnb is one of the most popular websites where you can list your property. Becoming an Airbnb host is actually pretty simple. You don’t even have to break much sweat apart from establishing a reputable profile online.
6. Provide Amenities
If you want your tiny property to be of value, you need to make sure that you provide good utilities and access to amenities. For instance, the availability of a wifi connection, maintenance, and functionality. There’s no problem in charging a higher price, as long as your tenants or visitors get what they pay for.
7. Have an Edge Over Your Competitors
The art of selling demands knowing what makes your tiny house special. In concepts of advertising, this can be considered as the Unique Selling Point (USP) of your investment property. Does it give a serene view of the river? Or maybe it does offer a luxurious experience to the guests. Your edge will give your business a leg up over your competitors and will help your clients decide why they should choose to stay in your tiny home unit.
8. Be Hospitable to Your Customers
Having good facilities are great and all, but nothing beats garnering positive reviews among your past clients. Many people nowadays place greater considerations for testimonials and product or service ratings. Make sure to accommodate your guests well. Don’t let them feel like their needs are neglected. You can leave welcome gifts and personalized notes on the house. Or even simple ways of staying polite or giving them tips and advice about what they can do around are already too precious for customers to remember.
Ready to Invest in the Tiny Home Industry?
With the buzz that these tiny properties are making in the media, it is undeniable that more and more people are persuaded to join the tiny house movement. Yes, it has a long list of benefits and opportunities. But just like any other investment, you need to understand that there are risks that await in this business. To make sure you don’t go astray, it’ll be a smart move to consult with the experts in the field, such as real estate agents.
This article has been contributed by Ge-Ann Marie Arenga.