Open House Austin Real Estate and House Hacking

View Original

This $89K Pre-Built Tiny Home Covers My Entire Mortgage

Steph, here! I’m excited to share one of my latest investment adventures: purchasing and rolling a pre-built tiny home onto my property.

See this content in the original post

Let’s start with the pros and cons of this project:

Cons:

ADUs vary in size, and they can only be built so small. You’ll need a large enough lot to place one on - as well as an alley or runway that can handle the width.

This just won’t work for every property. That’s one of the main reasons why I created The Tiny House Guide. You can always use my plan to build one on your land!

Generally speaking, this could not suit your style. You won’t get to choose everything that goes into it. Hello, agreeable gray and builder-grade fixtures! Though, you could go back in after the fact and mod it to your heart’s content for a more custom feel.

Pros:

It’s completely turnkey! If you’ve got the space and funds, but lack time - this is truly the best option to quickly earn rental income or grow your property’s square footage. Reminder that my tiny house construction project took 4 months. It was a high-effort project as I researched materials, managed contractors, and constructed part of the home myself.

Big benefit here! I can take this home with me if I ever decide to move. Or, use the home and its proven rental potential to increase the value of the property when selling.

Here Are The Tiny House Specs:

  • 399 Square Feet

  • 1 Bedroom

  • 1 Bathroom

  • Loft

  • Side Kitchen w/ Eat-In Island

  • 15' Wide Model

  • 10’ Front Porch

See this content in the original post

It’s a Tumbleweed model from Creative Living Solutions. And, it came with everything - cabinetry as well as appliances! 

I really do like the layout, which has an open kitchen and living area. We also added a larger deck in the front. It cost us about $5K, but renters adore it. It’ll be great to have coffee out there on fall mornings.

Buying The House & Setting It Up

We drove to Bastrop, TX and picked out what we wanted. They could’ve delivered it as soon as the next day. It’s that quick! They’ve realized the demand, so there’s plenty of inventory to choose from now. 

We got a permit to hook it up to the primary home (simple job completed by plumber and electrician).

Earnings Breakdown & ROI

Did you know that this purchase can be financed?!

My ADU cost $89K. We put 20% down, or $18K at 7% interest - half of what I spent building my other tiny house. That price included delivery and tie down.

Our payments come out to $750 a month. We plan to pay off this loan in lump sums! We earn $3,500 a month (gross) from short-term renting the home. This covers the existing mortgage on the front house as well as the tiny house itself.

See this content in the original post

Another Option

We’ve also done this recently by going onto Facebook Marketplace and buying someone else’s tiny home for $50K. We were able to get a loan for this as well. What’s great about this ADU is that it’s very narrow - ideal for a side yard or navigating through an alleyway.

See this content in the original post

Bottom line: I love this tiny home, and the lasting income that I envision it’ll bring.

If this project got your wheels turning (pun intended), let’s work together! You can chat with one of our Austin, TX agents here. Or, we’ll connect you with a like-minded realtor in your area - just fill out this form.

Follow us on Instagram and TikTok for ongoing real estate market updates and all the home buying + selling tips.