In 2019, I bought a three bedroom, 1,400 square foot house in Atlanta, Georgia for $196,000. I feel like I can earn extra income by renting out a spare room on Airbnb, especially since I travel a lot for work and rarely come home.
Unfortunately, bookings dried up in 2020. No one wants to share their home with a stranger at the start of a pandemic. My work trips also stopped, so I was living alone in a house that felt too big.
But in May, when I looked out the kitchen window to my large backyard, something clicked: I could use the space to build a small house to live in, and rent out the main house.
How I built a small luxury house
Before I start, I need to submit the building, electrical and plumbing permits to the city planning office.
Then I bought a warehouse from Liberty Storage Solutions and hired a local contracting team to pour the concrete slab foundation. He should be working in October 2020.
Overall, it cost me about $35,000 to build the house, which includes the prefabricated shed structure, labor and material costs.
Instead of taking a bank loan, I cashed out $8,500 in stocks and put about $20,000 on a credit card to pay everything. I was able to pay off this debt last year.
When the house was built, I rented the main house and rented a room from my neighbor for $300 a month.
This precious little home sits in the back corner of a 7,280 sq. ft. backyard.
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After I finished building a small house measuring 296 square feet in March 2021, I immediately rented it out on Airbnb for a few months to recoup the cost.
By charging between $89 and $129 per night and $1,300 in monthly rent, I was able to generate nearly $32,000 in gross rental income. And this January, I moved to a small house to save on living expenses.
Here are the monthly costs for both houses:
- Mortgage and property taxes: $1,200
- Electric: $190
- water: $110
- Internet: $80
Total: $1,580
All this is guaranteed by the $ 2,725 I got from renting the main house, which means I can live in a small house for free.
Take a look at my loft-style backyard
To give the place a bright and airy feel, I painted the walls a shade of coastal blue and added some rustic touches like a wooden ladder leading to the queen bed of the balcony.
Underneath the sleeping loft is a small desk, which I use to check email and work.
Jeffrey Beard for CNBC Create
In addition to the daybed that doubles as a seat on the main floor, there is a full bathroom, kitchen and breakfast nook.
Rustic barn sliding doors provide easy privacy.
Jeffrey Beard for CNBC Create
The bathroom is equipped with a shelf for extra storage and a glass shower door, which makes the room feel larger.
Jeffrey Beard for CNBC Create
My favorite area is the kitchen. Most people are surprised that it has a full size refrigerator and an extra large sink.
The kitchen has an induction stove and a small breakfast nook.
Jeffrey Beard for CNBC Create
Eight separate windows, wall mirrors and glass shower doors all make the space feel larger. Sometimes I forget that I live in a shack.
Small details like this mirror make the space bigger and more comfortable. “Sometimes I forget I live in a warehouse,” Precious said.
Jeffrey Beard for CNBC Create
The “tiny house” lifestyle.
I had to downsize my closet and shoe collection. But instead of getting rid of the clothes I still wanted to keep, I kept some at a friend’s house. Every few weeks, we do a wardrobe swap.
Their precious dog Sachia also lives in the small house with them. They plan to entertain friends in the backyard when the weather gets warmer.
Jeffrey Beard for CNBC Create
I don’t have friends over very often, but when the weather gets warmer, I plan to use the fire pit as a hosting area.
Owning this home has given me many real estate options, including rental income and a backup home for myself or an aging family member.
I believe that tiny houses will play an important role in balancing the global housing crisis. Last year, I gave a TEDx Talk on how we can help create a sustainable sharing economy for the land.
If it’s nice outside, the spacious terrace is a great place to enjoy the fresh air with a coffee.
Jeffrey Beard for CNBC Create
In 2021, after realizing the effect of vacation rentals on the real estate market in Atlanta, I stopped listing properties for short-term rentals on sites like Airbnb. Renting out more and more places for the holidays means less space for people who need long-term housing.
I started reducing my portfolio and hiring local students and low income workers. My plan is to add a guest suite attached to the main house and provide a more stable home.
His favorite part of his house is the balcony area, where there is no place to sleep.
Jeffrey Beard for CNBC Create
This year, I’m excited to experience the tiny house lifestyle myself. It’s amazing what you can do with a little background space.
The price is expensive is a TEDx speaker, marketing strategist and social entrepreneur. In 2021, he founded LAND RIFTING, a digital real estate marketplace, is in the midst of a conversation about the impact of short-term rentals on housing affordability and availability. He has a master’s degree in management information systems from Indiana University. Follow him Instagram, Twitter and Youtube.
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