Building a vacation rental home in a popular tourist location and renting it out by the night is an increasingly popular way to gain a home away from home and is also an attractive way to gain a year-round income. Yet despite this rising trend, one unique form of construction is poignantly missing—shipping container homes!
Shipping container homes are growing increasingly popular for people looking to live a minimalist lifestyle, but they also have great appeal to anyone hoping to find a unique weekend getaway. Trends show increasing numbers of vacationers only have the resources for short-term vacations, and the more unique the experience, the better.
So how much money can you actually make by renting out a container home? A survey by short-term rental marketplace, HomeAway found the average owner who rents out a second home collects more than $33,000 a year in rental revenue. At rival company Airbnb, a common figure for renting out a single room or portion of a home, consistently reached $11,000 a year.
“With the strength of the housing market where it is today, I do believe vacation rentals are a good investment,” says Nick Winikoff, co-founder of Vuepeer, a search engine for vacation rentals. Many people use vacation rental platforms to at least break even on their investment in their first year while waiting for the home itself to appreciate.
Airbnb provides an online tool that enables users to calculate average daily rental rates, occupancy rates and revenue. Using these projections, you then can subtract items like principal, interest, taxes, insurance, maintenance expenses and management fees to come up with a cash-flow forecast.
Keep in mind that its best to begin small, starting with a 20-foot unit. This can be rented out or sold quickly. Container homes maintain a very high resale value (100 percent and up) and being able to load them on a truck and deliver them anywhere makes them very attractive.
Regardless of your financial situation, one key factor that will affect how much income you can produce from a vacation rental, is its location.
Is your home located near a popular destination, such as a beach community or a ski resort? If so, then you’ll likely generate a generous income from rentals. Christian Bryant, president of IRC Enterprises, says he knows of investors who’ve made two to five times more on a well-located property that’s a short-term rental versus a traditional long-term rental.
On the converse side, you won’t make a lot of money if your location has just three months of sun and only happens to attract tourists during the summer months. Bottom line: A vacation rental requires more market research than a typical real estate investment does.
Aside from the investment value of a vacation rental, there is, of course, the lifestyle value – a value that’s priceless to many owners of vacation homes. Plus, it’s a value that you’ll never gain from stocks and bonds or even long-term rentals.
Simply put, you can extract that priceless value from a place you can call your second home – at the beach, in the mountains or anywhere else you love – when its not being rented out. Most owners can’t afford a vacation rental without generating some income from the property, so offering short-term rentals enables you to enjoy your dream of owning a vacation home.
Vacation rental spaces are just one of the many ways you can use a shipping container to turn a profit. Next week we’ll discuss more investment opportunities for shipping containers. What about you? We’d love to hear your ideas as well as tips for success in the comments section below.