Running a Rental Business

Benefits of Listing a Tiny House on Airbnb

March 29, 2022

Tiny homes have grown in popularity over the years due to their sleek and stylish atmospheres provided at a cheaper price. Their increasing demand and lower startup costs make tiny homes a potentially profitable opportunity for Airbnb hosts. Learn the pros and cons of listing a tiny house vacation rental.

wooden tiny house in forest

What Is a Tiny House Airbnb?

A tiny house is simply what it sounds like: a home that is tiny.

These unique residences are typically smaller than 600 square feet, though, on average, they are closer to 300 square feet. They can be built on a cement foundation or a trailer.

Tiny houses differ from similar small living arrangements, such as large campers or RVs, due to their beautiful interiors that are reflective of a normal house. A tiny home will generally come with everything you need to live comfortably, including a kitchen, bathroom, and living and storage spaces.

Are Tiny Homes on Airbnb Profitable?

Tiny homes are a growing trend in America. Most popular in the Northwest and Northeast, over 50% of Americans would consider living in a tiny home, according to a 2020 survey. Additionally, 86% of non-homeowners would be willing to buy a tiny home as their first house, citing affordability, efficiency, eco-friendliness, and minimalist lifestyles as their driving factors.

A tiny house Airbnb can help you take advantage of the increasing demand for these smaller living spaces. 

Due to the small size and mobility of most tiny homes, they can be a great way to make use of extra space on your property to generate rental income. Further, they come with relatively low risk due to their cheap cost compared to a typical rental unit or apartment.

As with any Airbnb, however, it does take time and attention to make your tiny house Airbnb profitable.

According to Woodlands Online, some factors that will improve your chances of profitability are:

  • Hosting at or near a desired location
  • Keeping things clean
  • Creating an attractive aesthetic
  • Providing great customer service 

Like a normal Airbnb, the key to success is making staying at your tiny home rental a great experience from which people can come away happy and satisfied.

inside living room and kitchen of a tiny house

Pros and Cons of Hosting a Tiny House Airbnb

A tiny home can be a great Airbnb rental option under the right circumstances, but there are some pros and cons to consider before purchasing or building your own tiny house.

Pros of a Tiny House Vacation Rental

One of the biggest pros of investing in a tiny house as a rental property is the low cost to buy or build it. 

According to research from Porch.com, the average cost of a tiny house is $52,000, which is 87% cheaper than the national average of a typical home. This makes tiny homes a much more accessible option for people to use to generate rental income.

Another positive is that, unlike similar smaller-sized accommodations such as RVs, tiny homes are usually stationed in one place. This means that builders have more freedom to build out a more luxurious aesthetic and make it very homey.

Tiny homes can also be more enticing than renting a single room in an Airbnb because of the greater privacy. Pair this with the trending affinity towards tiny homes, they can be a popular option for renters looking for smaller and more affordable lodging.

Cons of a Tiny House Vacation Rental

One con to investing in a tiny house is that it does not appreciate in value as a typical house often will. This is due to the fact that a tiny house is often mobile and not connected to the land beneath it.

The land is what appreciates over time as demand in an area increases. This is in contrast to the house itself, which feels the effects of wear and tear and loses value as a result. In the case of a tiny house, since there is typically no land ownership associated with it, it is a depreciating asset like a car.

Additionally, despite it being a cheaper option than a traditional home, Airbnb tiny houses can be harder to finance. Many home loans will not accommodate tiny homes, as their cost is typically much less than a standard residence. Investors may have to turn to RV or personal loans, but these may not have as favorable loan conditions.

woman and dog on porch overlooking a mountain

Should I Start Hosting a Tiny House Airbnb?

A tiny house Airbnb can be a great way to get started earning rental income for a relatively cheap cost. Lower cost means less risk, so this can be a great place for beginners to start growing passive income.

If you are considering listing a tiny house on Airbnb, ensure that you will be able to have consistent bookings. Since a tiny home is a depreciating asset, it must be in use. Otherwise, it is costing you money.

To reiterate, the most important factor when gaining traction on Airbnb is to make staying at your location a great experience. From providing unique experiences at your property to keeping your Airbnb clean and presentable, the customer experience will be what determines your success or non-success.

TurnoverBnB is a great tool that can help you to automate your Airbnb cleanings and ensure that guests are always met with a pristine room and start their booking off on the right foot.

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By Cobalt Zucker