People are putting tiny houses in their backyards to make extra money. Here's how 4 homeowners making up to $3,000 a month set up this side hustle.

The exterior of the tiny house Precious Price built in her backyard.

Precious Price

• Americans are turning to tiny houses to reduce their living costs and combat housing shortages.
• Homeowners are buying these $35,000 homes and putting them in their backyards as rentals.
• 4 people share how they started their tiny-house rental side hustles. 

Tiny houses, small dwellings that are on average 150 square feet, have become an emerging trend as Americans want to reduce their living costs. Home Depot now sells a prefabricated tiny house for $44,000.

Housing shortages are fueling the boom in tiny living. New York City is holding a competition to give select residents up to $395,000 each to build a tiny home in their backyards, garages or attics.

More entrepreneurial Americans see these tiny houses as an opportunity to make money from empty space and pay down their mortgages or even as a main income.

Four "house hackers" who've put tiny houses in their backyards shared how they did it and make up to $30,000 a year from renting them out.

Ansel Troy bought 2 tiny houses to put in his backyard – now Airbnb is his main income

A tiny house in Troy's backyard in Oakland, California.

Courtesy of Ansel Troy

Troy had already converted the garage of his house in Oakland, California, into a studio and was renting long-term when he bought his first tiny house.

Troy bought a tiny house on wheels for $33,000 and parked it in his backyard. He started renting it on Airbnb to test the short-term rental market in his area. He said he knew short-term rentals could generate more money.

The listing was so successful that he bought a second 18-foot-long tiny house to fit snugly next door.

Troy told Business Insider in April that Airbnb had been his primary source of income since July 2021. He said he decorates and styles his tiny short-term rentals for style over comfort and owes his success to the Airbnb algorithm.

Read more: I bought 2 Airbnb tiny houses and put them in my yard. It started as an easy way to make extra cash — now it's my primary source of income.

A savvy millennial real-estate investor added a tiny home in her backyard to help pay her mortgage

Douglass added a large porch to the tiny house.

Steph Douglass

Former teacher Steph Douglass bought her first house in Austin in 2013. She rented her second room out for extra income. Even after buying a second home, she continued to rent her first home and a room in her new house.

Douglass told BI grew tired of having to share her space and invested in a tiny house in her backyard. She used savings to put a 20% deposit down on a fully-furnished tiny house that cost $89,000.

The tiny house was rented to be rented out within 10 days of completing the purchase, Douglass said. She rents it out on Airbnb and makes on average $3,500 a month – enough to cover the short-term rental management fees, the tiny house mortgage and her mortgage.

She told BI not having to worry about a big mortgage payment made her feel "really awesome and powerful."

Read more: I bought a pre-built tiny house for my yard that brings in passive income. Here's how I set it up.

A single woman built her backyard tiny house from the ground up – and now lives in it while renting out her main property

The exterior of the tiny house Precious Price built in her backyard.

Precious Price

Precious Price bought her first house in Atlanta, Georgia, after completing her Master's degree in 2019. The marketing consultant immediately began brainstorming ways to offset her living costs.

As a single woman, it was easy for Price to downsize and live in a tiny home in her backyard while renting out the main house. She rents out the larger property to students to help pay off her 30-year mortgage and utilities bills.

During the pandemic, Price designed the tiny house and secured planning permission – which took longer than expected. She spent $10,000 on the shed, $19,161 on labor, and $6,675 on materials.

Now, she loves sharing her space with students and living as part of a "small community." She told BI they have cookouts and help with maintenance.

Read more: I built a $35K tiny house in my backyard and live in it. I now rent out my main home and use the money to pay off my mortgage.

This man was able to quit his job thanks to the income from the 2 tiny houses in his backyard

Sabrina Hartley

Will Sutherland built an Airbnb tiny-house treehouse on his four-acre property in Virginia where he lives with his wife. Sutherland had already been renting out a converted school bus on his land on Airbnb for years.

He told BI it took six and a half months to build the treehouse from scratch, including cedar siding he milled himself with a sawmill. It has a queen bed and a lofted roof that adds square footage. The treehouse and converted bus share a bathhouse with a shower and toilet.

Sutherland said the income from both of them meant he was able to quit his full-time job. The treehouse alone brought in $30,000 in its first year.

Read more: I built an Airbnb treehouse in my yard. I charge up to $250 a night — and I've already made enough money to quit my job.

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