We Make $1.8M/Year Renting Tiny Homes To Travelers
Hello! Who are you and what business did you start?
Hi! My name is Jeff and I am one of the three co-founders of Tiny Away (a Big Tiny hospitality management subsidiary, which is also co-founded by us). The Tiny Away network includes a range of comfy eco-friendly ‘tiny houses’ for travelers seeking alternative and unique accommodation experiences. Having already grown to over 75 private locations across New South Wales, Victoria, South Australia & Queensland, Tiny Away offers adventurous road-trippers and weekenders the chance to immerse themselves in Australia’s, without compromising on comfort.
A step up from glamping, each tiny house offers hot showers, air conditioning, a cozy queen bed, and a kitchenette. Boasting a range of stunning designs and state-of-the-art features both inside and outside, these impressively self-sufficient “compact homes on wheels” are in their element in some of Australia’s most spectacular rural settings.
On average, we are taking in about $156,000 monthly in terms of rental revenue, not including the other streams of income, as Tiny Away is a subsidiary of Big Tiny which owns the entire tiny house ecosystem from designing to manufacturing, shipping, assembly, deployment, management, and after-sales service.
What's your backstory and how did you come up with the idea?
It all started in 2017 when my partner Adrian was on vacation at the picturesque Great Ocean Road. He loved the beautiful coastal scenery and felt that this was exactly what city dwellers would need to re-energize themselves. He then partnered with Dave and me to build tiny houses and place them on land with beautiful scenery. Thus Tiny Away was born. It was born out of a desire to offer city dwellers a comfortable place to escape from the city and recharge in nature during a time when experiential accommodation was trending. The trend is further accelerated by the recent pandemic where post-pandemic travelers are now looking for accommodation that is not high in human density, close to nature and has large open spaces.
There is no perfect time, perfect business model, nor perfect product. The single most important factor is to get it started. Otherwise, the idea would always remain an idea. Period.
This business is wildly different from all other business ideas we had because none of us had any expertise in the tiny house arena but decided it is worth a shot because it would solve 3 key issues we saw - city dwellers want to escape from their hectic, digital lifestyle, rural landowners are not putting their land to good use and investors are looking for holiday homes with decent financial returns.
Despite having a financially stable, high-paying job then, we decided to go all-in when our seed-round, which was also our ‘litmus test’ and reality check, was oversubscribed and we managed to raise $200,000 for 10% of our equity.
Take us through the process of designing, prototyping, and manufacturing your first product.
Tiny houses, for the uninitiated, are generally defined as dwellings that are under 400 square feet in size. Regulated as caravans in Australia, these tiny houses should not exceed 4.3 meters in height and 2.5 meters in width to ensure the safety of other road users when it’s on the move.
The very first tiny house on wheels that we built was assembled using 6 pieces of prefabricated panels. Then, we found this method of production and assembly to be relatively quick and hassle-free, but we were not satisfied with the fact that each panel was heavy and required the use of a crane to lift the panels onto the trailer base. And with the usage of heavy machinery, meant that we would need a bigger space to ensure that it could maneuver around the trailer base efficiently and that eventually translates to higher operating costs in terms of rental, not to mention the comparatively higher risk for our workers.
It was of course our very first tiny house ‘prototype’ and so we ran with it, but at the same time, dived deeper into the design and building aspect of tiny houses in our bid to continuously improve on the quality and build. It was also at this juncture where we hired staff who were trained in spatial design to look into maximizing the ‘tiny’ interior spaces that we had in our houses.
Version 2 came shortly after, where each panel weighed significantly less and could be handled by 3 to 4 people and it was designed in such a way that each panel could be joined to one another with relative ease, further cutting down on the assembly time and space required. And this is the version which we decided to put into production when we expanded in Australia.
The next step would then be the transportation of our panels. With the help of our spatial designer, further thoughts were put into how we should be flat-packing these into shipping containers so as to utilize the space efficiently and the final result - the panels required to build up 4 tiny houses can be packed into a single 40-footer container!
Fast forward to a couple of years later, Tiny Away has experimented with a total of 8 different tiny house models, with our tiniest being a 4.8-meter tiny house with a loft and a fireplace and our biggest and most luxurious model at 7.2 meters long, complete with a rain shower!
We also held our very first large-scale tiny house festival in Sydney, just before the COVID outbreak, and had the honor of having John and Zack from the popular Netflix series, “Tiny House Nation” and Bryce Langston, a famous tiny house expert YouTuber from “Living Big in a Tiny House” fly in to share their vast experiences in the world of tiny houses.
This event also saw us exhibiting 4 of our tiny house models to a crowd of more than 9,000 festival-goers over 2 days.
After tracking various aspects of our tiny house business over the past 3+ years, we concluded that in terms of cost efficiency and returns, the two (pictured above) of our 6-meter models fared the best in terms of the cost to build, versus rental yield ratio, and hence pushed forth to scale further, utilizing these tiny houses.
Describe the process of launching the business.
The tiny house movement was a trend that started in the US quite some time back. It initially started because some could not afford the hefty monthly mortgages associated with traditional real estate. But as time went by, the movement evolved beyond financial considerations and moved more into becoming an eco-conscious way of living. And it was this trend that is sweeping across the globe right now.
This movement, however, is a relatively new concept to most, especially when our business added another facet to it by combining it with eco-tourism, and hence getting our launch strategy right was of utmost importance.
Because it is human nature to avoid things that are unfamiliar to them, we decided that credibility building and increasing our reach and exposure was the way to go to make sure people understood our business.
We then put a portion of our bootstrapped funds into holding a press launch, inviting press from established media and social media influencers to our launch, where we shared the inspiration behind our business, showcased our very first tiny house, and took any questions that were thrown at us from the guests, which by the way is an amazing indicator of the kind of FAQs we would be getting from the general public.
The response from the reporters was amazing, which I think is partial because the business or industry that we are in is pretty niche, and yet at the same time, because of how the buzzword these days is sustainability, we were able to capture the eyeballs (or interest) of many. And soon after the articles were published across various media titles and channels, we began receiving lots of interest in our business.
Since launch, what has worked to attract and retain customers?
I think the fundamentals of the business need to be solid before everything else will fall into place nicely. In our case, since we are in the experiential tiny house eco-tourism space, the primary objective for us would be to create that perfect experience for our tiny house guests that they cannot get anywhere else.
We hit the sweet spot when we used photographs for our listings that were taken by guests themselves or social media influencers because those shots are what ‘flicked the switch’ for our guests
And to do that, we curated the land sites on which we would be placing our tiny houses, which can range from anything to the tunes of an animal farm, a fruit orchard, a vineyard, or just places with exceptional scenery. The land site either had to have activities for our guests to partake in, e.g. learning how to ride a horse, hot air ballooning, feeding alpacas, harvesting nectarines, wine tasting, or on the other extreme, be amidst a wide-open field where guests can kick back, take in the views and indulge in a digital detox, away from the hustle and bustle of city life.
Once that was in place, we looked at:
1) Leverage booking platforms. Leveraging brand exposure from well-known accommodation, of course in addition to having our own. Airbnb was driving the most number of bookings for us. Coming from the marketing perspective, the ROI of this channel is higher than placing ads as it is in a way performance-based. We only pay when bookings are made whereas, for ads, a click-through might not eventually end up with a booking.
2) SEO. Concurrently, we ran SEO campaigns to increase our brand visibility and drive traffic our way
3) Convert traffic into paying customers. Now, with all the traffic coming in, the next step would be how to convert them into paying customers and the quickest way to draw them in would be attractive visuals of our tiny houses on the land sites that they sit on which led to the creation of our Instagram account, where the majority of our target audience ‘lives.’
4) Asking for reviews. Consumers nowadays are really tech-savvy and most, if not all, would do their own research before committing to purchase so we also spent time reaching out to guests who have stayed over at our tiny houses to review their experience or leave testimonials.
5) Social media influencers. This user-generated content strategy was further bolstered by working with social media influencers in the travel space where we invite them to stay over, take beautiful pictures and videos of our tiny houses, and also share their itinerary of activities during their stay with us.
6) Collaborations with brands. We also did brand collaborations with other local brands whose vision is aligned with ours or are complementary via cross-marketing so that it becomes a win-win for both brands and in the process, do giveaways or have promotions exclusive to the other brand so that even more people get to try out our getaways.
7) PR. And last but not least, we continued using the power of PR to establish our credibility in Australia, which has seen us appearing in various established media channels and titles like Channel 7 News, Channel 9 News, Sunday Telegraph, Sydney Herald, Time Out, etc.
Ultimately, regardless of which channel or strategy you use to attract or retain customers, the key is to be on your toes and monitor the results, analyze them, and continuously fine-tune the strategies to ensure they are relevant and timely to maximize your marketing dollars and ROI.
How are you doing today and what does the future look like?
We are really lucky in that sense that all our efforts and hard work since the beginning have paid off and are profitable since our first year of operation. Today we are managing more than 70 tiny houses that are spread throughout NSW and VIC and most recently, we also expanded into QLD and SA.
The ongoing pandemic accelerated the experiential accommodation trend and travelers are now looking more at stays or getaways that are amidst Nature, with large open spaces and lower human traffic and this seems to be the trend moving forward.
With that in mind, we are looking at curating even more land sites and improving on the experiences for our guests, and also expanding into more states within Australia. We are entering the New Zealand market later this year and thereafter Japan.
Through starting the business, have you learned anything particularly helpful or advantageous?
When we first started the business, though, we conducted market feasibility studies, poured over countless amounts of data, and drew up countless business plans and proposals, nothing came close to getting your hands dirty and just getting it started. Because what I have come to realize is that, the way moving forward only gets clearer when you start putting your ‘perfectly thought-out’ plans into action.
Problems and obstacles will come your way, but if you can find the right solutions and solve the root cause of the issues at hand, the business emerges stronger and better than before.
And when it comes to things that were not in our area of expertise (Adrian studied Real Estate in university and hence was the strategy guy. Dave has a Master's in Environmental Engineering and was put in charge of the building and eco aspects of the business plus operations because of his military background. And I had been in advertising and possessing the gift of the gab as well, was put in charge of the marketing and sales of the company), it might make more sense to pay for experts in that field to save both time and effort, but of course along the way, learning from them the hows and whys of their particular skill sets as well.
Take for example the first few tiny houses that we built. Yes, they were functional, where there was a queen-sized bed in our tiny house that ticked the box for sleeping, a fully equipped kitchen that enabled our guests to do some simple cooking, and a toilet with a hot water system that solved the sanitation needs, BUT our tiny houses looked spartan. They lacked the coziness that our guests would come to expect of a well-designed abode.
Also, the pictures of our tiny houses were taken using camera phones at the start which we felt looked okay but paled so much in comparison to other listings on the accommodation booking platforms.
We paid professional photographers thereafter to improve the quality of our photographs. They looked much better but to me, the previous ones looked a little too cold, or too corporate, akin to someone taking a photograph for their passports.
We hit the sweet spot when we used photographs for our listings that were taken by guests themselves or social media influencers because those shots are what ‘flicked the switch’ for our guests - the exact demographics of people we as a business we're trying to attract. And hence taught us the lesson of “what we think is good might not be the same for our target audience.
What platform/tools do you use for your business?
Guesty For the management of all our guest bookings as it allows us to sync up all the bookings from various accommodation booking platforms.
Zendesk For management of inquiries or feedback from our guests. Great for assigning tasks out to relevant experts in the team and also tracking to see if every single query is being handled correctly and in a timely manner.
Facebook Business Suite Easy to use scheduling tool for social media posts on both Facebook and Instagram and even has recommended date and time for posting that is based on when our page subscribers are most active.
Canva Really user-friendly online designing platform. Loves that it has all the preset dimensions for commonly used media, e.g. Facebook cover page, Profile Pic, etc., and amazing templates to level up the usual old presentation decks.
Pexels My go-to website for high-quality stock photographs to be used for my social media campaigns.
Mailchimp A must-have in your arsenal of tools especially if you have accumulated a database over the course of running your business. Has an easy to use an editor that allows you to beautify your eDMs, newsletters, etc that is so so important in keeping your customers, prospects up to date on what’s happening in the company.
The Right Fit Influencer + Talents database that we use quite often for our influencer collaborations. I really like this as it shows all the important details that brands usually look out for and the process is really fuss-free and simple to use.
What have been the most influential books, podcasts, or other resources?
Coaching for Performance by John Whitmore. Ultimately although we are the ones who started the business, the company would not have come this far without the passion and support of the entire team and it is only right and deserving that on top of running the business, we should look at grooming and growing everyone in the team so that they can one day, take over our roles and bring the company forward even more.
Advice for other entrepreneurs who want to get started or are just starting out?
There is no perfect time, perfect business model, nor perfect product. The single most important factor is to get it started. Otherwise, the idea would always remain an idea. Period.
Thereafter, always put in your best efforts in all that you do. You will always have the chance to finetune everything along the way.
And don’t forget to listen, especially to the feedback from your target audience because what you may think is the best product or service offering, might not be the same for them, who are the ones ultimately paying for it.
Marketing, as with all other functions, is important so do not neglect branding and marketing efforts. If you have the best and most innovative product or service in the world, but nobody knows about it, you would not be able to sell or scale up.
Are you looking to hire for certain positions right now?
No vacancies at the moment, but if you have an amazing personality, think you have what it takes to join our vibrant team and value-add, do feel free to drop us your resume and a short but awesome introduction about yourself that will leave a deep impression at [email protected].
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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