How to profit from the 'backyard office' and 'tiny home' movements as a side hustle...🏡
Recap of the My First Million podcast episode 122 startup idea (there was really only one this time)
Hey guys, welcome to another edition of Everyday Startup, a newsletter all about startup ideas aimed at solopreneurs, DYI experts and other one-person internet based businesses. We bring together ideas and strategies from all over the internet including My First Million podcast.
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This week’s Everyday Startup spotlight:
🎙 The ‘improbable podcasting expert’ who rakes in 6-figures as a self-made expert on podcasting. The dude started his newsletter in 2014 not ever having created a podcast himself. He basically just wrote about his hobby after his day job because he loves podcasts. The newsletter gradually gained popularity and is now widely read in the podcasting industry including by executives and producers of major podcasting companies.
📈 After George Gammon sold his live conference business he decided to pursue his passion of contrarian investing. In only about a year he grew his Youtube channel Rebel Capitalist to 200,000 subscribers and started a paid-only online community of like-minded folks. He charges from $57 to $97 per month and has 781 current subscribers at last check…that comes out to be $44,517 to $75,000 per month! He teaches macro, investing, and real estate. It’s amazing how he built such a large, PAYING audience in only about a years time! I think his secret was ‘niching’ down to “macro” investing.
⛵️ In last week’s letter I mentioned Sailing La Vagabonde, a couple (and their toddler) who sail around the globe on their catamaran sailboat. They document everything on video and upload them to Youtube and have garnered 1.5 million subscribers. Here’s the kicker: They get from $400,000 to $1,000,000 in yearly donations (my best estimation) using the platform Patreon. There are many, many more successful sailboat channels on Youtube. Is this the golden age of creators?!
The tiny home movement is here to stay…
There’s a growing movement among younger generations towards owning less and experiencing more.
The parents of these younger generations are all about how BIG their houses are and how many toys they own. The millennial and younger generations, however, tend to shake-off the clutter from their lives so they are unencumbered to travel and experience the world.
But for those of us who have spare space in our backyard, why not turn a liability (your home) into an asset (income producing business)?
On My First Million podcast episode 122, Sam and Shaan discussed the growing tiny home movement.
According to iPropertyManagement there are over 10,000 tiny homes in the US. The average cost of a custom built tiny home is $60,000. 68% of tiny home owners have no mortgage on their homes.
Abodu is a company that builds “backyard homes”. They’ve raised a few million bucks according to Sam. These high end tiny homes will set you back around $200,000.
Dwellito is an online platform that allows you to browse and buy a modular home. similar idea but have a more affordable price tag of around $80,000.
So what opportunities exist to serve the ‘tiny home’ and ‘backyard office’ movements?’’
The first is to buy a tiny home and rent it out like on Getaway or Airbnb.
The second is creating a marketplace where people can list or rent out “backyard offices”. You could also turn this into a co-working space. The AirBnB of WeWork, anyone?
While the latter idea will likely require the development of a tech platform and become more of a Silicon Valley type of a startup, the first idea is more up my alley. By renting out your own tiny home/office from your backyard you don’t have to put much effort into it and can easily handle it as a side hustle.
So what kind of profit could you expect renting out your tiny homes or offices in your backyard?
We are talking 102%+ returns for a side hustle…
Doing some back of the envelope calculations, let’s say you purchase a tiny home or office for your backyard at the average cost of $60,000 and make a mortgage payment of about $3,000 per year (3% rate) and a down payment of 10% (6,000). [This is based on Airbnb listings like this one in Austin, Texas.]
Now let’s say you list it on Airbnb for $50/night average and book it for 50% of the year (pretty conservative). That comes out to be around $9,125 of gross profit (not including insurance, maintenance, or repair expenses).
That’s a 102% cash-on-cash return less any additional expenses. You also get the benefit of generous tax deductions and depreciation. Not bad for a side hustle.
If you build the tiny home yourself you could easily save around 50% on costs and boost your returns even higher.
That’s it for this week’s letter, guys. Hope you enjoyed it!