Guide offers details on building tiny houses as rental property

Tiny houses, detached living spaces typically less than a fourth the size of usual family homes, are a growing trend, according to Golley Houses, a Decatur-based company that sells kits for prefabricated tiny houses.

Golley Houses points out possible uses, including suites for retired parents or returning adult children, guest retreats, and workshops or studios on the same property as the main house. Another possible application—tiny houses as investment rental property—is the focus of the company’s recently published downloadable Golley House Tiny House Rental Property Guide.

“Ever since I founded Golley Houses I have been questioned about the possibility of using the tiny house as a short-term rental or rental unit,” said Frank Golley, founder of Golley Houses. “The idea of using the extra space to generate some income is very appealing to a lot of people. Most people then ask about the process of managing a rental, what the costs are, how to advertise, what the rules might be, how much money can be made, etc. The rental guide was created to help answer some of these questions and serve as a tool for interested parties.”

Tiny houses have been a growing trend for more than a decade, he continued, especially since the pandemic, with more and more people interested in using them as rental houses. “It’s a great idea because the houses are simple and relatively inexpensive to build, set up, and maintain and really appeal to many vacationers who prefer the privacy a single home can offer,” Golley said.

Typically, tiny homes are between 100 and 400 square feet, according the www.realtor.com, which adds, “While there isn’t a set standard, a tiny house rarely exceeds 500 square feet….You could fit 144 tiny houses on a football field.”

“Tiny homes offer a great second income for people wanting to invest in a rental property,” according to the guide. “Cabins and tiny homes have become even more popular vacation destinations in the wake of the COVID 19 pandemic. Some creative and popular tiny house rentals include lake houses that capitalize on nature’s amenities with a small dock and canoe. Or picture a tiny house on a working farm with an outdoor community firepit, where renters are invited to tour the farm. Tiny houses work great as cabins in the mountains or bungalows near the beach. They also work well in the city, offering a unique, affordable alternative to hotels.”

Golley said investors can build a single tiny house or a community of houses with common amenities such as a park or cookout area.
Published in November, the guide takes would-be investors through aspects of building and operating a tiny house rental property or community, including choosing locations, gaining permits, navigating zoning laws, estimating costs, choosing décor, and stocking the unit for rental.

Golley cited a recent survey on tiny house living conducted by IPX 1031, a national real estate investment firm, which identified numerous trends in preferences and interests in tiny homes for living space or rental opportunities. The survey, conducted in November 2020, polled 2,006 Americans, and reported that “With a low cost to build and maintain, tiny homes could bring big profits for property investors.” According to respondents, 72 percent would consider buying a tiny home to serve as an investment property. Among those, 63 percent say they would rent out their tiny home as a long-term rental while 37 percent say they would rent their tiny home as a short-term rental.

“When designing your tiny house, consider both your immediate needs and how you may use the space in the future,” Golley advised “What may be a rental property now may turn into a space for an aging relative down the road. Some basic living requirements are a bathroom, a living space, and a small kitchen. Design your tiny house to be multi-functional. You can either have one open space or add a loft to double the available floor space.”

The houses Golley offers are 16 by 10 feet, creating 160 square feet of space, or 260 square feet if a loft area is added, placing them well within the 400-square-foot limits of Decatur’s specifications for a tiny house.

“The cost to build a tiny house varies greatly depending on the materials used and whether the investor builds the structure himself or hires a contractor,” Golley said, noting the cost can range from $25,000 for a simple structure to $150,000 for a luxury one. “Prices do fluctuate due to market conditions,” he pointed out. He listed among the tiny house costs to consider: the tiny house building kit, lot permitting fees, materials, installation of utilities, HVAC, plumbing and electrical work, solar insulation, and maintenance costs.