Case Study: Adding a Tiny Home for Cashflow

by Kara Niles on Aug 20, 2024
Article appears under: Case Studies, Rotorua

When we invested in Holden’s Bay, Rotorua in 2015 the driving force was that it was cash flow positive as an AirBnB. The bonus was that the property was on a 1,200 m2 section. If you have worked with me as a client you will have heard me say over and over that one of the things I love about investing in Rotorua is the potential to develop. We still have many sections over 800m2 that are quite affordable. 

But what about when build costs are high and leveraging is tight? My advice is to do what you can when you can and this time I put my money where my mouth is. 

We just added a cabin to the back of our section. This is stage 1. Stage 2 will be to add a duplex. That will happen when it happens.

Here are how the numbers work:

• Total cost of project: $150,000 (cabin, demo of asbestos garage, geo-tech reports, consents)
• Rental- $450pw
• Gross Yield on the added home: 15%

On to the next deal :-)