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Home » Investment property » Your Guide To Renting Out Your Tiny Home

Is there a tiny house that’s vacant in your backyard? Or maybe you want to build a tiny home to turn it into a real estate investment? Whatever your reasons are, it can be exciting to own a tiny house, let alone rent it out. But are tiny homes as profitable as TV shows make them out to be? Let’s find out.

Is a Tiny House a Profitable Investment?

If you’re thinking about building a tiny house, that’s probably because you have extra space on your property. But before you build a tiny house, ask yourself if it’s worth it – specifically, if it’s profitable at all. Will your tiny house be rented out on Airbnb year-round, or will you have to deal with vacancies?

Fortunately, it’s easy to tell if a tiny house is worth it. All you have to do is to determine the return on investment (ROI). This can be calculated by following the formula:

Return on Investment (ROI) = Net Profit/Cost of Investment

The cost of investment is the amount of money that you put into the property. It’s worth mentioning that this isn’t limited to the cost of materials – you should also account for the costs to finance the property, costs to purchase an insurance policy, and so on.

However, if you already own a tiny house (let’s say that it’s in your backyard), then it would be safe to say that it’s a worthwhile investment. It would be better to rent it out as a vacation rental than to have it sit vacantly. In that case, your cost of investment would be repair and maintenance costs.

The ROI should give you a general idea of whether or not it’s a worthwhile investment. However, do note that you should seek the services of a real estate professional in South Florida to know for sure if it’s worth the risk. Factors such as the property’s location, population, etc. can impact its potential returns.

How Much Should You Budget to Build a Tiny House?

Be prepared to spend anywhere between $30,000 and $60,000 to build a tiny house. This, however, is not a fixed amount. The cost of your tiny house depends on the kind of amenities that you add to it – for instance, if you deck out the bathroom, of course its cost is going to be significantly greater.

If you want to know how much you’ll spend to build a tiny home in South Florida, it would be better to speak with an investment adviser.

Tips For Renting Out Your Tiny Home

Tips For Renting Out Your Tiny Home

Want to ensure that your tiny house yields your desired returns? Here are a couple of tips from our professional property managers to guarantee that it succeeds:

#1 Make Sure It’s Legal

Your tiny house is not a shed. With that said, you should be careful about the laws that govern its construction. In certain areas, temporary structures such as tiny homes can’t be placed on your property. And even if it’s allowed, you may not be allowed to rent it out even as a short-term rental. Hence, it is critical to review the local laws, as well as the homeowners association (HOA) rules, to be absolutely sure that you can rent your real estate investment.

What Should You Do If It’s Not Allowed?

Do not go against the law. If you find out that you can’t build a tiny home, or you can’t rent your current tiny home, do not try to do any of these. As an alternative, you can contact homeowners in areas where it is allowed to run a short-term tiny home rental. If they allow you to build a tiny home on their lot, you’ll probably have to split the profits, which is only reasonable. You’ll probably have to cover the costs to build a driveway, too.

If you plan to build a tiny house on someone else’s property, be sure to draft a fool-proof contract that states each party’s contributions. A South Florida property management firm can help you prepare this contract.

#2 Ensure Your Tiny House Is Up to Code

It’s not uncommon for tiny homeowners to DIY their tiny homes. If you’ve decided to DIY yours, we’re not saying that it’s uninhabitable, but it’s best to be sure it’s safe. If a tenant rents your tiny house and suffers from a slip-and-fall, and you’re found to be liable for it, you will be in trouble. Remember, it would be against the law to rent out a tiny home that does not align with the building code.

Partner with a property management firm if you’re worried that your tiny home isn’t up to code, or if you DIYed any part of it at some point. As a rule of thumb, if the tiny home wasn’t entirely built by a professional, there’s a chance that it’s not up to code.

#3 Consider Touristy Areas

Consider Touristy Areas

If you plan to build a tiny home, it would be best to consider touristy communities. Bear in mind that your tiny home will likely attract short-term tenants or vacationers who want to know what it’s like to live in a tiny home. With that said, if you still need to purchase a lot, set your sights on those in touristy areas such as Miami Beach and Palm Beach. Partner with a property management firm to identify the real estate markets that are ideal for short-term tiny home rentals.

#4 List Your Property on Short-Term Rental Sites

Your tiny home isn’t a “typical” rental property. Hence, you should list it on sites that cater specifically to short-term tenants, such as Airbnb and Vrbo. Find out where your potential tenants look for short-term rentals – do they look them up on websites like Airbnb, or do they use social media as a search tool? Again, a property management agent can determine the ideal channels to list your tiny house.


A tiny home can be a profitable investment, but be sure to calculate its ROI first. However, even if it has the potential to be profitable, it should be managed properly. To do that, partner with an experienced property management company such as Luxury Property Care. We provide round-the-clock property management services for South Florida rental property owners and investors. Contact us at (561) 944 – 2992 or complete our contact form for more information.

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