Buying a Tiny House for Airbnb

Tiny houses are a smart choice to start a rental business on Airbnb since their unique construction offers some advantages over traditional homes. Investing in rental property through tiny homes combines all the necessary ingredients to become a profitable business.

Reasons why tiny homes are a good investment property for Airbnb:

  • Are affordable to purchase
  • Are easy to maintain
  • Can be a popular choice
  • Are rented as a whole
  • Can be moved to a different location

There is an additional benefit on top of all these advantages; a tiny house can be constructed in a very short period of time. So, the process will be quite fast and simplified when you decide to start a tiny house Airbnb business.

Are tiny homes a good investment for rental property

Tiny houses are generally a good Airbnb rental property investment, given the uniqueness of their construction. Most of these homes are prefabs on wheels which are quite rare in the property market. Though, this singularity grants tiny homes with some advantages.

Tiny houses are cost effective

These structures have a significant advantage: they are much more affordable than a traditional house. Tiny houses are, in most cases, built entirely off-site and placed on wheels instead of foundations, which highly reduces construction costs. The average tiny house only costs about 48,000€. Still, despite their reduced price, tiny houses offer a good quality home with all the necessary comforts, which allows them to be rented at a good rate.

The minimal space in a tiny home is easy to maintain

Since tiny homes are small by definition, they are more affordable to maintain as a rental business. Preparing the house for every guest’s arrival and keeping it clean is essential to ensure a profitable rental. The lower the square foot of the space, the less time it will take to get it ready and the higher the profit will be.

Tiny homes can be a popular choice

In order to make a profit renting a house on Airbnb, you need guests. This platform encourages its hosts to rent all sorts of homes, yet not all of them show the same popularity among guests. Since 2019, Airbnb has experienced an increased interest in unique stays such as tiny homes [1]. Also, this type of house is especially attractive to younger guests and given that as much as 51% of the guests using Airbnb are aged 18 to 34 years old [2], it is likely for a tiny home to get a nice amount of bookings, and make a good income on this platform.

buying a tiny house for airbnb
Nature Pod by Vagabond Haven

Tiny houses are rented as an entire place

Tiny houses are always rented as a full house, which is an advantage because those Airbnb accommodations that aren’t shared with the owner or other guests make the highest rental income. Also, the affordability of tiny homes eases the possibility of purchasing different units rather than building a larger house, making the rental more attractive to guests.

Tiny homes can be moved to a different location

Most tiny homes are conceived as non-permanent, transportable constructions that can be built independently from the land. They can then be placed on a rented property or even on an already constructed plot, highly reducing the initial investment. Also, since tiny homes can be moved, it is possible to change locations in the future. This will ease adapting to coming changes of the market or even to the law since various cities around Europe and the U.K are defining new regulations as problems arise [3].

How do I start a tiny house rental business?

The process of starting a rental business is quite easy when the chosen house is a tiny home. Given that this type of house is built up to completion in a factory-like environment, the construction stage is highly simplified.

  1. Choose a location and check the local regulations: Even if tiny homes are transportable, you should choose a specific location to get started. To ensure a profitable set-up, research the type of tourists visiting the area and find out if they would be interested in renting a tiny house.
  2. Buy a tiny house that fits your budget: There is a wide range of tiny homes to choose from with a variety of designs but also with different sizes and amenities. Set a budget, evaluate those options that look more appealing to you, compare the price ranges and calculate a realistic possible profit.
  3. Prepare and personalise the space: Turn this new tiny house into an appealing place to stay. Personalise it with decorative objects and make sure to include all those items that contribute to making the guest feel comfortable and homey.
  4. Create an attention-grabbing Airbnb listing: Create a house listing page that will get the attention of your future guests. Write an appealing yet detailed title and description of the tiny house you are renting out. Make sure to include all your offerings and choose those pictures that emphasise the most attractive features of this tiny house [4].

Should you buy a tiny house to rent out on Airbnb?

If you are planning to invest in an Airbnb rental business, buying a tiny house could be a good place to start since, in most cases, tiny houses are:

  • Cost-effective: These houses have it all to be profitable; they are affordable to buy yet offer a valuable place to rent.
  • Easy to maintain: The reduced space simplifies cleaning and maintaining work.
  • An attractive renting option: Tiny houses are a popular type of dwelling not only for the uniqueness of their nature but also guests do not have to share the space.
  • Moveable to a different location if needed: If the market or the regulations change affecting the business, the tiny house could be moved to a more profitable place.

References:

[1](2021, May) Airbnb Report on Travel & Living News Airbnb https://news.airbnb.com/wp-content/uploads/sites/4/2021/05/Airbnb-Report-on-Travel-Living.pdf
[2]Woodward, M. (2022, August 31) Airbnb Statistics [2022]: User & Market Growth Data Matthew Woodward https://www.matthewwoodward.co.uk/work/airbnb-statistics/
[3]Thiha Tun, Z. (2022, May 26) Top Cities Where Airbnb is legal or Illegal Investopedia https://www.investopedia.com/articles/investing/083115/top-cities-where-airbnb-legal-or-illegal.asp
[4](2020, November 18) How to set up a compelling listing page Airbnb Resource Center https://www.airbnb.com/resources/hosting-homes/a/how-to-set-up-a-compelling-listing-page-12

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