My Tiny Home Experience as a Rental Property Owner on Airbnb

By: Bruce May
| Published 09/25/2019

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MONTGOMERY COUNTY, TX -- Retirement. It’s something we all think about, and sometimes it can feel like an overwhelming, unattainable future. In order to diversify my retirement savings, I did something out of the box - I purchased a tiny home with the intention of renting it out.

Tiny homes are a popular cultural lifestyle at the moment. It’s a movement based on the idea to live simply; the houses are constructed with substantially less square footage and every area of a tiny home is utilized by those who live in it. Not only do they put to rest the notion of living with too much stuff, they are also economic, costing residents thousands less than a traditional American home.

The results of purchasing a tiny home as a rental have been astounding, but I did a lot of things to maximize my return. While I don’t yet know how much my return on my investment will be for the year, after three months of renting, I can project that it will be between 15% and 25% before expenses. That beats any other investment I have ever made. I don’t recommend putting all your money in rental property, but if you can afford to spend about $100,000 or so on a tiny home and still keep most of your money in other investments, it is definitely something to consider, but this is a business and you need to learn how to run it right (see my list of best practices below).

Buying rental property can be expensive, but a tiny home provides a relatively low-cost option. Purchasing a tiny home within a resort setting was especially appealing because it came with so many amenities that make a rental property more attractive. When I found Waters Edge on Lake Conroe, I knew I had found the perfect place to make this work. Waters Edge is a RV resort that is being converted into a Tiny Home Community. It is a gated community with lake access, boat docks, a large pool and views of the lake from many of the lots. They kept the RV business model, which is unusual, because when you buy a tiny house here, you don’t own the property. Instead, you rent the property, just like an RV owner. Because you can’t move most of these houses (they are too large, despite being called tiny homes), I was a little concerned. Waters Edge calmed those fears by offering me a 99-year lease, making it the perfect solution. I only pay $545 per month for all my utilities, including water, sewer, garbage, electricity, Internet and cable TV; and because it is all rolled into one bill, I only have to make a single payment and I’ve got all my monthly expenses covered.

I actually bought two houses - one that I live in and the other one that I rent out on Airbnb. They are located next to each other with a large deck in between. I let my renters use the deck when they are here, which they absolutely love. Because I live next door, it’s easy to provide good customer service to my guests. However, you don’t have to live in Waters Edge like I do to make this work; the Airbnb app lets you manage your rental property from anywhere.

Because I teach marketing, sales and customer service, it was easy for me to quickly turn this into a success story but there was more to it than just having good business skills. Here are my tips for creating your own success story with a Tiny Home rental property on Airbnb.

• Find a great location. I already explained the amenities available in Waters Edge. It is one of the only gated communities on Lake Conroe that allows you to rent your house on Airbnb.

• Find a home with a view. Again, Waters Edge provides lots of lake views so that was easy to accomplish.

• Create an attractive and fun interior. I decided to create a beach house experience, even though we are located on a fresh-water lake. The tiny house has a wood stained cathedral ceiling, so it feels much bigger than it is. It is really an exciting space for a guest. I topped it off with blue colors to give it a beachy feeling and even added weathered wood headboards for all the beds. The house has a complete kitchen which is well stocked with everything they need to cook, including blue pots and blue dishes to keep with the beachy theme. I even added a wet bar to create a more party like environment.

• Create a great outdoor living space. This was important to me, because the interior is only 1,000 sq. ft. I also knew that my guests would want to enjoy cooking and eating outdoors, so I built a 1,000 sq. ft. deck, with an 8x16 covered porch to protect them from the sum. Of course, there is a gas grill for cooking, but I also added a gas fire pit table with circular outdoor seating and an outdoor dining table that seats six.


• Be accommodating for partying. Why have a rental house if you don’t want people partying? That doesn’t mean they will be making loud noise all night, but encouraging them to enjoy themselves is a big part of making them want to rent in the first place.

• Practice “Disney-like” customer service. People want to know that you care. My guests need very little attention, but when they do, I put on a big smile and do everything I can to make sure they have a great experience. If this comes natural to you, then you will be a great host. If not, maybe this is not for you. Personal satisfaction is nice, but being a great host pays off in other ways. Reviews are an important part of getting future bookings and if you have a high rating, Airbnb will make you a “super host” and your property can go up in the listings, meaning more people will see it and that means more bookings!

• Provide lists of local attractions. You can do this in the Airbnb app. People come from all over Texas to rent my house… and even from as far away as California. That means many of them are not familiar with the area. By creating lists of attractions, I can help them find the best places for dining and entertainment.

• Keep it clean. You can do this yourself, but hiring a professional cleaner is the smarter way to go, unless you are a real clean freak. That’s important because one bad experience with a dirty house and your ratings will drop.

• Communication is key. The Airbnb app lets you text with a prospective guest. Answer all their questions as completely as possible and try to be as friendly as possible. If you come across as mean or difficult in any way, they will never book with you. And when they do book, be sure and communicate with them right up to the minute they arrive. Any confusion about where to go or what to expect will create a disappointing experience and creating great experiences is what this is all about.

It may seem like a lot, but if you like people, most of these skills and practices will just be second nature to you. Owning rental property can be a good investment but think it through carefully. It is an expensive investment and if not done right, you will not achieve the kind of ROI that is possible for someone who loves creating a great user experience. I have been making over $2,000 per month since I listed my rental home on Airbnb. I don’t yet know if that will continue through the winter, but future bookings are looking pretty good right now. The potential to generate a good return is there for anyone, but be sure you have the right property and the right location before you try making this kind of investment. For the right person it can be a great experience, not just for your guests but for you as well.

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