In the short-term rental riches will discuss investing in real estate with a specific focus on short term rentals quick actionable items to wire. Scale your portfolio I’m your host Tim Hubbard.

Welcome back to the short-term rental riches podcasts today we’re going to dive in a little deeper into the subject of tiny homes and container homes I think they both kind of fit in the same category I talked about them briefly in a prior episode comparing luxury Runnels with unique rentals which these would fit into and then your plain Jane normal urban rentals which is kind of like what I do but I want to dive a little deeper into this because I’m constantly learning to I don’t have decided to run almost myself but there is a gentleman on you tube that has a lot of them and he has a really great YouTube channel called Robel and he is talking about the downsides after having built them themselves so I just want to bring this to your guises attention I don’t want to discourage anyone from getting in the short term rental world because I think it’s fabulous and it’s here to stay but I just want to bring it to your attention that different types of properties have different risks are gonna talk about some of the downsides this week let’s get right into it well for one. A tiny house or a container home we’ll try to separate these 2 but a lot of this kind of blends together it’s tough to finance because lenders are not as familiar with these types of properties I guess we should compare this to a normal single family home in the suburbs you have way more financing options with that then you would a container home especially one that you’re trying to build when it comes to building to that is quite challenging with both of these depending on where you’re at in the US or in the world everywhere has different restrictions but it can be very difficult to get financing for these types of properties and if you’re paying all cash. Versus paying 20 percent down potentially maybe less on a typical property well then you got to factor that in your overall return you might not be doing as well as you think you are self financing can be difficult also because there’s probably not going to be a lot of appraisals right there’s not a lot of comments for these types of properties so if you’re trying to get a loan a lender is not going to have too much to go off most of the time your rates if you do get a loner probably gonna be a little a little higher and probably not as good of terms I know I have a friend in Joshua tree that has an RV park it’s fabulous I know she’s crushing that she’s doing a really good job but they financed it themselves I remember trying to find other resources to refinance and that hopefully she’s found that by now now that’s generating a lot of cash flow but that can be a lot trickier C. got to keep that in mind. Next segment of tiny homes hopefully this doesn’t come as a surprise to you but yes they are tiny they are tiny and a lot of things come along with a tiny property and that’s that you’ve got to have special furniture probably your over the counter furniture from ikea and stuff like that might not always work you’re probably gonna have more built ins and stuff like that. So yes tiny homes are tiny that also means you can’t fit as many people so if you’re putting a tiny home in a place where you think it’s going to be really well suited for vacation rentals for families might be going on we’re gonna need more tiny homes right because you’re not going to fit as many people so they’re a little harder to design the permitting can definitely be a lot trickier and from road builds videos he said that was one of the most challenging parts and this permitting and the design and all this leads into the fact that tiny homes might not be as cheap as you think they are in fact the tiny home that he built I think this is also in Joshua tree was $543 per square foot. That’s really really high that’s some of the most expensive real estate you can find and of course that’s because it’s very tiny but you’ve got to keep in mind that. You still have to put in a driveway that’s probably the same size you still have to get permanent for electrical and and the permit prices probably aren’t going to be that much different you still have to get water and electrical plumbing to your property so a lot of those things aren’t going to be less expensive just because your home’s tiny so you got to keep that in mind and I think the reality is a lot a lot of us want to get into tiny homes in these types of properties because we think that they’re they’re cheap to get into and they can be but only really if they’re off the grid if you’re not having to go through harsh city regulations and permitting processes and if you happen to be someone that’s super handy and you can do it by yourself off the grid well then yes you could very likely build one of these for less money I know I stayed in one in Colombia a couple years ago was awesome a friend recommended it to me I know that they probably maybe spent 20 to 30 grand on that property and they were charging almost $100 a night so that’s a really good returned but from the example from this YouTube video is 543 square foot tiny home customer around $165000. So it’s not that this can’t be a good investment I just want to bring this to your guises attention if you’re trying to do this in a place where the permitting process is difficult and there’s not a lot of contractors that are familiar with tiny homes or architects that’s another piece of it to just keep that in mind might not end up being as cheap as you think it could be. Hey just want to ask you guys real quick favor if you haven’t already left this review if you wouldn’t mind heading over to iTunes or Spotify wherever you’re listening to the podcast and just leave us a quick review we really really appreciate it and if you know someone that you think would find value in any of the episodes that you’ve listened to you could just take a screen shot send it over to that’ll help them but it’s also going to help us grow a little bit too and lastly we’re on YouTube so if you prefer you to you can head over to short term rental riches and you can find us there as well thanks for listening in and thanks for all your great feedback. Let’s jump back in. Next let’s move on to container homes which are kind of similar right container homes can be tiny although they can be very big as well and again broke bill has great video on this willing this and the resources I’m all for you guys just fine as much information as you can to make the best decisions possible and again I don’t want to discourage you from from getting into this but container homes I would say the kind of trendy they’re kind of trendy right just like tiny homes and so we’ve got to ask ourselves. Transfusion kind of fade I’m not saying that they’re going to and especially with people being able to live and work for virtually that adds a lot to this type of property but I still think they’re a little trendy and we can see that kind of in some of the pricing that’s going on to. So on the container homes the permitting it’s going to be very similar with these user these are different types of projects that people that work with the city or just not familiar with or ads familiar with depending on the city you’re in maybe this is never even seen when you call him up they’re not going to know how to handle the process because they just haven’t done one before so that could make it more difficult when you have to do your safety inspections is a safety inspector going to know how to inspect a steel container home probably not the probably not trained on those right so that that could really shake things up again architects are gonna have a little less experience and there’s also this chance that the containers. They have a history right much you’re buying a brand new container and the cost of containers have gone way up by the way remember when they used to be you know $2500 I was looking into this I kind of look in any type of real estate I can get my eyes on because I just love real estate and and I also like to diversify. So I remember when they were really cheap I was talking with my friend in Brazil yesterday actually who runs a mine down there they mined copper and he’s shipping large containers of copper all the time and he told me that the cost of containers for him has more than doubled so this is kind of worldwide thing especially after the pandemic supply chains have just gotten crossed and they’re having a hard time so prices are going up now to actually fabricate a container home there’s a little bit a misconception here right we’re not just going to live in this steel container cut windows out we’re gonna cut doors out and yes a solid container is very structural that’s either bill you can stack on top of each other but they’re not as structural when you start cutting pieces out of them so we’ve got to have a account for that and again this is if we’re not doing it off great if you’re doing enough grade will then you might be able to get away with some of these things but if you’re in a city where you’re going to have this permitted and safety inspector comes in and something’s not engineered correctly well maybe you have to get a structural engineer in their medals not cheap to fabricate so again I think a lot of us think that we can build these container homes and expensively but the reality is they can be very very pricey one of the other examples in the YouTube videos from someone that already built these and again this depends on where you’re at but they can easily be in the 6 figure range for a small container home so keep that in mind financing again a lot of these 2 categories have a lot of the same similarities financing is going to be hard you’re not going to see a lot of appraisals on these what’s going to happen when you try to resell it and you don’t have any cops to go off of it’s going to make things difficult to. So I just want to break down a few of these ideas get you thinking a little bit if you’re headed down this path not saying it can’t be really lucrative I know that it can I have friends are doing it very very well but let’s factor in our whole return here if we can’t get financing and we have to put all this up in cash that’s going to be hard to beat a property where you only have to put 20 percent down right and then in the long run the thing that I love about the types of properties I talk about on this channel the time that they have good backup options so does your tiny home or does your container on does it have good back up options can you put a long term tenant there if for whatever reason you need to and are you still going to have a good return there are you going to be able to get your financing just keep all these things in mind don’t want to discourage anyone I love the short term rental industry so I hope you jump in just want to present some new information that I am covered so until next time ponder that to give a little more side and have a wonderful day. There’s so much money to be made the short term rentals but it all starts by having the right property if you guys haven’t yet seen my free ebook on our website rest methods.com head over there and get a copy it’s going to break down what I look for in a property and some great short cuts so that you don’t have to spend hours and hours researching at over rest methods.com and you can grab your free copy there if you want a crash course in everything I’ve really learned to short term rentals in over 5 years managing over 15000 Gasol recorded on our last live event and I’m happy to say we broke it down really nicely into a bunch of different modules that you can watch at your own pace it takes you from start to finish finding a property we talk about analyzing the property but then also some of the more important pieces how to find your team and how to set up everything so that you can run your operation is passively as possible and free up your time you can find that it rests methods.com forward slash virtual.
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