Tiny homes: A new opportunity for short-term rental hosts

Have you ever heard of tiny homes? If you’re thinking of getting into the world of short term rentals, these original, sustainable, and inexpensive accommodations might be for you. But that’s not all. Tiny homes can also be interesting for those who already manage one or more rentals and are looking for a way to differentiate themselves from the competition and increase their revenue.

In this article we will explain what a tiny home is. You will also find out how much it costs to build one, how to furnish it, and how to promote it online to grow your vacation rental business.

What is a tiny home?

Tiny homes (also known as “tiny houses”) generally measure a maximum area of about 37 square meters. They are not just an alternative to traditional housing, but an architectural and social movement that started in the United States around 1970. The basic concept of tiny houses is, “How much space does a person really need to happily live?”

But be careful: the term tiny house does not mean stuffy apartments within apartment buildings shared with dozens of other people. Tiny homes are usually whole houses, possibly self-sufficient and often surrounded by nature. Minimalism and sustainability go hand in hand to create homes where owners (and their guests) can enjoy life without the need for the superfluous. “Simple living” is the mantra of those who decide to join this movement.

Tiny homes for rental: a new business opportunity

How can tiny homes represent an opportunity for owners and managers of short-term rentals all around the world?

Over the years, the hospitality industry has changed to adapt to the needs of different types of guests. There is something for everyone: from traditional hotel stays, where guests are served and revered, to self check-in vacation rentals, where you barely know what your host looks like. Moving on to downtown apartments, farmhouses and cottages, cabins, farmhouses, luxury villas, glamping tents and even treehouses.

The high demand for different types of accommodations depends on three main factors:

1. Price: Clearly, different guests can afford different types of rentals. Students, for example, might prefer a cheaper option, such as a hostel, than travelers with a more stable income.
2. Needs: A family with children needs specific facilities for toddlers, an older tourist might prefer an easily accessible property, and a couple might be interested in a vacation home with some privacy and perhaps a hot tub.
3. Type of experience: Not all travelers want to have the same experience! While some are content to lie in the sun on some remote shoreline for the entire vacation, others prefer to walk around town all day, interacting with the locals.

Benefits of tiny houses for your vacation rental business

Based on these factors, some guests are more interested in a certain type of property than another. Tiny homes are perfect for those traveling alone or as a couple who want to be in touch with nature, having a sustainable, minimalist, and perhaps even digital detox experience.

Far from mass tourism, tiny homes allow guests to turn down the volume of daily life, de-stress, and find inner peace.

But the benefits also affect the owners! Tiny houses are generally quite inexpensive to build and maintain. This means that the investment you will have to make will be less than in other conventional properties.

That said, first you will need to decide what kind of tiny home you want to offer your guests.

Tiny house on wheels or stationary tiny house?

That’s right, because there are different types of tiny house designs: pointed-roofed like mountain chalets, futuristic-looking tiny homes, or even colorful structures that look like containers but offer all the comforts.

Legally, however, a distinction is made between tiny houses on wheels and stationary tiny houses.

Tiny house on wheels

Tiny homes on wheels are generally smaller than fixed houses, and water and electricity connections are mobile.

Perfect for digital nomadic living, they function in much the same way as caravans (trailers) or RVs. As such, they must have insurance and regular license plates. In most countries, they can weigh a maximum of 3,500 kilograms (3.5 tons), so they can be towed by a good-capacity car with the appropriate license.

In addition, tiny houses on wheels must be moved from the ground on which they were parked after a specified amount of time.

Stationary tiny house

If you plan to use these original accommodations as short-term rentals, you will probably opt for a stationary tiny house. Typically these tiny homes are larger than those on wheels, since portability is not the main goal. In addition, fixed connections for electricity and water will allow you to offer a few extra amenities and comforts.

Generally, because it is a full-fledged dwelling, you must build your tiny home on a building plot. You might need a building permit and will have to comply with relevant regional regulations.

How to build a tiny home for your short-term rental business?

Building your tiny house must be preceded by a number of considerations and reasoning. Here are the three main issues you may want to explore.

1. Decide on the location and study the local regulations

Do you have a building plot somewhere in the heart of nature where you can build one or more tiny houses? Does the area have something to offer?

For example, you could propose your guests unique hiking trails for the most sporty ones, absolute privacy from the rest of the world for those who want to unplug, or perhaps farms within walking or biking distance for food and wine tourism.

Once you have analyzed the location, consult your local regulations. Each country and region may have criteria regarding square footage, sanitation, housing accessibility, and more.

2. Analyze target groups

Since there will be little space, you will need to design your tiny home around the daily activities of your guests.

Analyze your main target groups and figure out how they will spend their time in your tiny houses. If the area is famous for its culinary tradition and is full of typical trattorias and restaurants, you might build a smaller kitchen. If you are hosting families with children or guests with pets, consider having an open area nearby with a water source where you can conveniently wash toys or the dog after a nice walk in the woods.

3. Choose the style of your tiny home

Tiny homes are often wooden structures that focus on sustainability and energy conservation. They can come in different shapes and colors. Examine your competitors and find a style that makes your tiny houses stand out from other vacation homes in the area.

How to furnish a tiny house?

The size and shape of your tiny house will be closely dependent on the interior environment. But what is the best way to furnish the interior of a tiny home?

Since space is limited, every detail matters. Every piece of furniture or architectural aspect must serve a dual purpose. For example, if you decide to build a raised shelf, use the space under the staircase as a closet.

Take advantage of clever solutions such as folding tables and sliding doors. Also, aim for simplicity and avoid the superfluous. Take a look at our guide on the most important equipment for a vacation rental and ask yourself: what could I leave out without compromising the comfort of my guests?

Finally, if you decide to build your tiny house, keep two things in mind: use sustainable materials and study the location of windows carefully. While a poorly placed window will make the tiny home look even smaller, a window in the right place can give your guests the feeling of being one with the surrounding nature!

How much do a tiny homes cost?

The price of a tiny home depends on many factors. For example, if you decide to buy a used one, a new one, or if you build it yourself. Also, the price of the equipment and materials used can vary.

As with any project in the tourism industry, try to calculate the return on investment with your accountant of choice. For example, if you want to install solar panels, you might spend more in the beginning but save on electricity later.

The average price of a tiny house in the US ranges from a minimum of $30,000 for a small house. and $60,000 for a bigger tiny home. Adding equipment and furniture, you will probably not exceed $100,000. In the UK building a professionally built tiny home can cost between £30,000 and £100,000 or more.

How to promote your tiny home?

Now that your tiny house is ready, it’s time to promote it. Here are the four main channels you should use:

• Online booking portal: Sites such as Booking.com and Airbnb allow you to reach a large audience of travelers from all over the world. On Airbnb there is a dedicated section called “tiny homes“.
• Direct booking website: Create your minicase website complete with professional photos, detailed description and presentation of the surrounding area.
• Social media: Social media accounts are essential for owners of tiny houses who want to use them as short-term rentals. Since this is a trend of the moment, you could make your rental”famous” and help fill your booking calendar.
• Local partnerships: Partnerships with local artisans and producers can help you get your name out there, especially at the beginning of your business.

Manage your tiny homes with Smoobu

Managing your tiny home is a breeze with Smoobu. Our channel manager automatically synchronizes your calendar to booking portals and your direct booking website. This will save you time and avoid double bookings. And if you don’t have a website yet, you can use our Website Builder and build one from scratch! If that’s not enough, our digital Guest Guide is the perfect tool to share your local partnerships and make your guests’ experience unforgettable.

To learn more, try our software for free for 14 days, with no commitment.

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