In 2019, I bought a three-bedroom, 1,400-square-feet house in Atlanta, Georgia for $196,000. I figured I could earn extra income by renting out the spare rooms on Airbnb, especially since I traveled a lot for work and was rarely home.
Unfortunately, the bookings dried up in 2020. No one wanted to share a house with a stranger in the early days of the pandemic. My work travels also stopped, so I was living alone in a house that felt too big.
But that May, as I stared out the kitchen window into my huge backyard, something clicked: I could use that space to build a tiny home to live in, and fully rent out the main house.
How I built my luxury tiny home
Before getting started, I had to submit building, electrical and plumbing permits to the city planning office.
Then I purchased a shed from Liberty Storage Solutions and hired a local contracting team to pour a concrete slab foundation. They got to work in October 2020.
Overall, it cost me around $35,000 to build the home, which includes the prefabricated shed structure, labor and material costs.
Instead of taking out a bank loan, I cashed out $8,500 in stocks and put about $20,000 on my credit cards to pay for everything. I was able to pay off this debt last year.
While the house was being built, I rented out my primary home and rented a room from my neighbor for $300 a month.
After we finished building the 296-square-foot tiny home in March 2021, I immediately rented it out on Airbnb for a few months to recoup costs.
By charging between $89 and $129 per night and $1,300 for monthly leases, I was able to bring in almost $32,000 in gross rental income. And this January, I moved into the tiny home to save on living expenses.
Here are the monthly associated costs for both homes:
- Mortgage and property taxes: $1,200
- Electricity: $190
- Water: $110
- Internet: $80
Total: $1,580
All of this is covered by the $2,725 I make from renting out the main house, which means I’m able to live in my tiny home for free.
A look inside my loft-style…
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