The Truth About This “Magic” Sales Phrase

A tiny home rental business sounds like a great idea, right? Buy a few units, rent them out, and start making passive income. But is it really that simple?

In this reaction, Matt breaks down the real costs and challenges of this business model. Buying the homes is just step one—you also need land, permits, utilities, landscaping, maintenance, marketing, and a solid rental strategy. Plus, location is everything!

Before jumping in, you’ll want to run the numbers, factor in Airbnb fees, financing costs, and demand, and make sure the investment actually makes sense. Tiny home rentals can be a great business, but only if you plan ahead.

There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!

Video Transcript: 

Business Advice Video:

Here’s a business idea for 2025. So what we’re going to do is we’re going to buy one, two, three, four, five tiny houses from Zipca Homes that are fully finished. Each unit is 470 square feet so you can rent them out every single night. come here, take a look inside of what comes inside this unit. So you’ve got a pull-out bed right there, kitchen right there, TV that will go right there. Come this way, you’ve got this awesome loft area where you can sleep even more people every single night. So come back this way, full-size bathroom to share. that’ll go right there. You come around, more shelving, TV, heat and cooled by the mini split area. This unit is 470 square feet again and costs $120,000. To learn more, go to Zipciahomes.com or check them out on our website. 

Matt’s Review: 

Yeah, I mean, seems lie a good idea. All you need to do is have the land to put them on and then the money to fill in the homes and you know notice in the video, right, there’s no landscaping or anything. People wanna, you know I guess if you reduce the price enough, they’re happy to live on a lot that’s all dirt, but ideally, you’d wanna put in some landscaping and some finishing touches for that spot. But yes, I mean, this is just real estate development, right? You find a location, you put the structures in place, and then you either sell it or rent it and make a nice return on your investment. And I think there are kits you can buy that are sort of similar to what they’ve got there for tiny homes from Amazon. I seem to remember those being $30,000, $20,000, $30,000. So there’s lots of different ways to do this. If I was thinking about doing it, what I might try to find instead of just a random dirt lot is something, I don’t know, with some, either near something, a park or a wilderness area where people would come to go hiking, fishing, camping, whatever. But you then put the tiny home for the people who don’t want to spend the night in a tent or an RV. Or put it up on a hillside or something where there’s some nice views or whatever, where you don’t mind being in a smaller place because you have these big vistas to look out at. But I mean, however, you do it, you just kind of sit down with a spreadsheet and do the math and figure out how much do you have to rent them for and how many times a year do you have to rent them or whatever to recover your costs from borrowing and installation and land and whatever else it costs you. Advertising. Airbnb fees if you’re doing it that way. And then you figure out if this place is appealing enough, you can charge enough, you can get enough interest for people renting it to make it make money or not. And then if you when you find the right spot, then go for it. It can definitely be a very good business. It just takes some planning and some forethought, like almost anything else you want to be successful with. Better to go in and know what you’re doing and have at least a game plan than rely on luck and hope as you plan. And sometimes that works, but a lot of times it doesn’t. So I like the home rentals. If you’ve got the money and resources to do it, go for it. You can probably do very well with it.