Author Topic: What is the smallest thing you rent?  (Read 654 times)

joenorm

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What is the smallest thing you rent?
« on: January 09, 2021, 08:00:38 AM »
Hi All,

I am trying to think outside the box for getting one and maybe two rentals started on a nearby property.

Building traditional (1000+ SQFT) just isn't in the cards as I have just finished doing that and don't want to start right back up again, I need a break.

But I can't help but think about small space living. Think tiny houses but not on wheels, they'd be permitted and affixed to the ground. I have feeling they would rent quite easily(some of that is just "feeling" and some is based on what I see available in my area).

I have even seen plans for micro duplexes like this: https://www.green-building.com/plans/twoplex/

This would be a fun build as its pretty manageable in size. I don't think the numbers in the end would work out to 1% like people here want them to, but I would be OK with that as the income would pay my mortgage costs and more, and bring in lots of value to an otherwise empty property.

Anyone getting creative with small spaces?

SndcxxJ

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Re: What is the smallest thing you rent?
« Reply #1 on: January 09, 2021, 04:34:50 PM »
The smallest thing I have is a 450 sq ft studio, so not ultra small, but small enough that it isn't right for a lot of people.  However, that studio has always been easy enough to rent and I see average lengths of tenancies.  I would personally be hesitant to have a place that incorporates a ladder like in the link, but those linked units look nice.  Hopefully there is enough space on your property to build out a nice patio/yard/and parking, maybe even a storage shed, as those features would make up for square footage.

NonprofitER

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Re: What is the smallest thing you rent?
« Reply #2 on: January 10, 2021, 08:08:59 AM »
I see a lot of people considering these ideas on the Bigger Pockets Forums - so you might ask there too. It seems like several people a week ask about building tiny ADU's or container homes, etc.

I think the challenge with tiny spaces is that they don't appear, at face value, that much cheaper to build. I could be skewed based on what other builders charge to make them, but the price per square foot doesn't seem to scale down as much as one would hope. If you can reasonably build them yourself, that may not be a factor.

I think I'd be concerned about the spaces getting more wear/tear than a regular rental. Being smaller, they would get "lived in harder" - if that makes sense. I'm assuming turnover of tenants may be a little higher too - only a certain percentage of people can live tiny for longer than a year or two. I imagine as tenants decide to grow their families or relationships, they opt to move into a larger space, perhaps causing higher frequency of vacancy?  But that just speculation.

Long term, I think the concern would be that a (permanent-structure) tiny space may not appreciate at the rate of a larger space.

PMJL34

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Re: What is the smallest thing you rent?
« Reply #3 on: January 10, 2021, 01:22:00 PM »
I agree with NonprofitER. I don't think there is enough of a cost saving and the tenant pool is much smaller + higher turnover with tiny houses.

To answer your question OP, I would guesstimate the minimal, but still tolerable sizes (in my area) to be:

450 sqft for a studio
600 for 1 bed
700 2 bed

I think the studio and 1bed is pretty much singles or couples only (maybe a couple with a infant, but they wouldn't stay forever). 2 bedroom you have a much wider range of tenants. With that said, studio is going to give you the highest rent per sqft compared to the 1bed or  2bed in my area. Studio would be about 1500+, 1 bed 2000+ 2 bed 2500+ at the lowest end. So you could technically build two studios side by side (or above) and get more money than one 2 bedroom (approximately same footprint). My plan is to build a 2 story ADU (small duplex). I will aim for a 2bed over 2bed if possible, but willing to do a studio over studio as well (lots are in the 3500 range in my area).
 
But if you are building from scratch and have the space, I would make them roomier since the cost difference will be negligible (or even cheaper due to bulk pricing).

EDIT: if you are dead set on tiny houses. You are better off with airbnb/short term rental.

Best of luck!
« Last Edit: January 10, 2021, 01:32:37 PM by PMJL34 »

Dicey

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Re: What is the smallest thing you rent?
« Reply #4 on: January 11, 2021, 10:56:02 AM »
Wow, those micro duplexes are too damn small! The ladder arrangement doesn't look like it would pass code in my area either. I am a huge tiny house fan, but that one doesn't do it for me, alas. Examples: look at the "closet". Also, the refrigerator is pretty big, but there's no way to cook except a microwave, which is taking up valuable counter space.

I have a casita at one of my rentals that I designed. It's 12' x 18' (216 sf) and is way more efficient. I rent the house, but not the casita. I do lend it to friends occasionally ;-)