Many Airbnb guests are looking for a chance to unplug and truly get away from the madness of modern life. David Fraser has developed a low-risk Airbnb model that capitalizes on this by building log cabins on his property, and he is keen to share his best practices with the Get Paid for Your Pad audience.
David happened into the idea accidentally because his family had no place to sleep when they visited his country home outside Toronto. His mother sent him an ad for a cabin on Kijiji, and David began to wonder if such a rustic experience would do well on Airbnb when his family wasn’t staying there. He did a little market research by creating a listing, using stock photos of the cabin and pictures of the view from his backyard, and to his surprise, there was significant interest. David accepted his first booking and built the cabin from a kit—two days before the guests arrived!
Nearly three years later, David has expanded his enterprise to three cabins and a shared bathroom facility. All the units have paid for themselves, and he is able to generate $4,000 CAD/month in cashflow. Today he explains how he developed the concept, from choosing a cabin to furnishings to maintenance. Listen to understand how David handles the seasonality of bookings and the potential for regulations down the road. If you are in the right situation, the log cabin model might work for you!
How David developed the log cabin concept
How much the cabins cost
How David furnishes the cabins
The process of building the cabins
How David approaches maintenance
The seasonality of bookings
The legality of Airbnb in David’s municipality
The primary market for David’s cabins
The benefits of the log cabin concept
David’s best tips for implementing the log cabin concept
This episode is sponsored by Hostfully.com where you can create a custom digital guidebook for your guests!
Complete Transcript for Get Paid for Your Pad Episode 185
Jasper: Welcome to Get Paid for Your Pad, a definitive show on Air Bnb hosting, featuring the best advice on how to maximize profits from your Air Bnb listing as well as real life experiences from Air Bnb hosts all over the world. Welcome.
AD: This episode is brought to you by Hostfully, a company that helps you make beautiful guidebooks for your listing. Especially for Get Paid for Your Pad listeners, get two free months of their premium version for free. Check out Hostfully.com/Pad
Jasper: Welcome to another episode of Get Paid for Your Pad. This is going to be a really interesting episode because I’m interviewing someone who has carved out a really profitable niche for himself near Toronto in Canada. His name is David Fraser and he’s renting out log cabins in his backyard. David, welcome to the show.
David Fraser: Thanks Jasper, thanks for having me.
Jasper: It’s a pleasure. I’m interested to hear your story. It’s going to be new for me as well. You’re renting out log cabins in your backyard. I haven’t spoken to anyone else before who is doing something like that. I’m super curious. Thanks for being on the show. Let’s hear it.
David: Basically, for me, it started when my wife wanted to live in the country so we moved to the middle of nowhere. I had student rentals when I was in University, but I never tried the Air Bnb thing before. My parents would come to visit and have to sleep on the floor. My mom started sending me these pictures of little cabins on Craigslist – at first, I was very dismissive of this idea. I resisted it. I decided, it might not be a bad idea. Before I bought this log cabin, I threw it up on Air Bnb and started market testing it with some stock photos and scenic view. I put up the pictures of the log cabin stock photo and the backyard photos. I started to see what kind of interest I’d get, so I took a booking. I built the log cabin two days before the guest showed up. I started refining the process and adding amenities. It got to the point where it was so booked up and successful that my parents couldn’t stay in them. This past spring, I built three more. I built two more cabins and a central bathroom, so there’s a shared bathroom. The Air Bnb community is great. I had 99.9 percent great guests and no problems. It’s been financially really successful and a lot of fun as well.
Jasper: So, how much do these log cabins cost?
David: So, what I’ve done is in the process, I’ve learned about the company that sells them. The first one was 4400 dollars Canadian delivered. I negotiated a deal with the company, so I have a wholesale price. They range in price from a low-end to 3500-8000. I always pick models around 105 sq. feet. I want to avoid ticking off the local zoning people. In my area, if you build anything under 10 sq. meters, you don’t need a building permit. It would complicate the thing. People want the get away from the city, live the country life, and then go back home. That’s my target market, that’s my most profitable market.
Jasper: So, 106 square feet, that’s pretty small. So like, a double bed and a closet? That’s about it, right
David: It’s a queen size bed, they’re all queen size beds. There’s a couple dressers and writer’s tables. People want to get away and explore their Ernest Hemmingway. One of my premium ones has a loft in it. You climb us this ladder and there’s another 2 people who could sleep up there. There’s air conditioning in that one. There’s a deep in the woods one, on the cheaper side, and the premium one has a loft, then there’s a deck one with a great view.
Jasper: That’s amazing, man. I love this concept. You keep it small so you don’t need a building permit. You order these things. They’re easy to build.
David: The first one we built – my wife and my father-in-law built it in two days. Really, one day to be honest. The second day was just putting the floor in and staining the floor. If you hustle, you can get the thing up in a day. The company I buy from has a complete kit. It comes with all the floor and roof boards, a door with a lock, the windows open and swivel, they also tilt. The only thing you need to add are screens. The roof material you can do shingles. A metal roof. That’s an addition to the kit. It’s a big Lego kit you put together
Jasper: You don’t need to build a foundation, do you?
David: You want to make sure you have a level area. So, I have this huge hill. Probably 50 percent of this work was leveling off the area. People pour cement pads, you can do that. I put down 6×6 pressure treated lumber down and leveled it off. Then built the structure on top of that. That will last forever. It’s less hassle. You have to make sure it’s really level. That was a struggle for me. I thought I could do this with a shovel.
Jasper: These things only cost between 3-5000 dollars?
David: The nicer ones are around 6 or 7. You could spend up to 10 if you want to go hard. I furnished it with used stuff and stuff from garage sales. My wife did this also, I shouldn’t say me. They all look cozy and nice, but we didn’t spend thousands of dollars on the furniture
Jasper: You’re renting these things out for like 40 or 50 dollars. If you do 20 days per month, you’re getting close to 1,000 monthly.
David: I found it’s even better. Can I share the numbers?
David: I built the first in January 2015. In the first year, it made 6 or 7-grand. So, it 100 percent paid for itself, something like 107 percent ROI. So, I track all my cabins individually. This year it will make 200 percent. Probably around 8,000. Year over year. The new cabins I built in the spring, I’ve already paid them off. They’re not huge numbers like, a huge Air Bnb in the city. Last month I made 4,000 Canadian profit considering I didn’t have to invest a ton of money.
Jasper: What about maintenance?
David: The locks aren’t fantastic. I replaced them with pad locks. The changeover is easy. I sweep the floor, change the sheets and that’s it. I recommend taking the time to stain the floor really well. The extra coating makes it durable. I had a few guests that wreck sheets, but it’s like $30 to replace. There’s no bathroom, no shower. I don’t have a lot of extra things. There’s so many more things that could be broken with that. With a cabin, I have a lamp, a heater, an electric blanket. There’s a lower point of failure.
Jasper: you’ve got a lot of reviews. You’ve hosted quite a lot of people. Is there seasonality in Toronto? It must get cold, no?
David: It gets frickin cold in the winter. Originally, last year, 2016, we went to Florida. We tried to get out of the winter. We usually leave for February and January if we can. But this past year, we didn’t get away because we had a baby, so I kept it open, and thought no one would book it. I still made like almost $2,000. I put a couple really heavy-duty heaters, the cabins are well-insulated, with a few good heaters, it works really well. I think I’ll put pellet stones in the cabin this winter. I anticipate it slows down in the winter, but I think it will be profitable at that point. Maybe it will be like $1,000 a month.
Jasper: That’s a pretty good investment for the winter considering you’re only spending about 5-7k on these things.
David: It’s the best investment I’ve ever made. I realize the demand for this is way more than I anticipated. I had all three going in June, so I want to build more on property. I’m thinking about buying the land around me and doing more. I think other people could benefit from this, too, which is why I’m talking to you.
Jasper: A lot of listeners are based in bigger cities, but if you live in Toronto and want to do this, you could literally buy a house, build those cabins, and even if you don’t want ot live there, use the money coming in to pay for the mortgage. Stay there when you have free time or rent out the house as well. A lot of the Air Bnb houses in the bigger cities are struggling with regulations, but I imagine in the middle of nowhere, no one really cares.
David: I can’t speak on anyone’s specific municipality, but where I’m from, they haven’t ruled on Air Bnb. I’m one of two hosts in my area. I mean, it’s inevitable that the big, stupid hammer of government is going to bash everyone eventually. I have a strategy where I’m building up a clientele of returning customers who can come out, they can text me and say “hey, is it free this weekend?” or they can look on the website. Then, we do a deal on the side. Eventually, I’m not optimistic about the governments deal to let two people transact frequently. I think in the city the government will come in. In the country, it’s slower but it’s going to happen. I’ve created a strategy to not put all my eggs in one basket.
Jasper: Very smart. The website is bunkeelife.com, I love how you branded it by the way. I think that’s smart as well. To have your brand and create an email list of all your former guests.
David: Sometimes people from states are passing through, I’ve had people from south Korea, too. But mostly it’s people from the city. The GTA is a big market for me. I’m looking for property all over Ontario. I’m considering property in the states, though, I think that would be more complicated because I’m from Canada. I think it could work anywhere. I have a big population base not too far away, but let’s say you did it in the middle of Idaho. It would still be profitable, but you might only make fifty percent. Which is still a good investment
Jasper: ONLY 50 percent.
David: Other than bitcoin, it’s the best investment I’ve found at least. The risk is really mitigated. Let’s say you build the cabin, put 5-grand in it. But you only get $100 a month so it takes forever to pay off. It’s still a lower risk.
Jasper: I think it’s incredible.
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Jasper: Now that you’ve sort of successfully built this business, you want to help other people do the same?
David: I’ve been trying to perfect it. There’s a learning curve. But a lot of people could benefit from it, and I think you learn more when you teach. I’ve been doing it in a rural sense, I don’t know why it couldn’t work in a suburban backyard, but it might be different. I’m trying to profitably help other people. I would be happy to skype or talk, obviously I’ve negotiated with people who sell these things, so I can get people a good price and make a small margin on that. All the little tricks you know, they’re a little different in my situation, but there are ways to get all the reviews positive so you’re not spending a ton of time responding. I’ve gotten consistently five-star reviews. I could share that, and learn, too.
Jasper: Do you want to share some of the insights you’ve learned? The differences between renting our log cabins versus a condo in the big city?
David: Sure, I’ve never done a condo in a big city. I’ve done the traditional buy a house and rent it out to students or rent it out to families, but I’ve never done the Air Bnb outside. Well, that’s not true. I helped my mom get her listing going. I used a lot of things I’ve heard on your show and it’s gotten her going. I haven’t done a full on buy a condo and rent it out on Air Bnb thing. But what I can say is I’ve targeted people who want to get away for a couple days. I avoid people who want to stay for long periods of time. Some people think the no shower is a problem, but that’s an advantage because people won’t stay a long time. There’s lots of turn over. I charge a $7 cleaning fee, that’s consistent. The reviews get built up fast because people are coming in and out fast. That’s an advantage. Before people come, I send them a video of where to park, where to walk, how to find your cabin, how to get to the bathroom, how to turn on the heater, etc. it’s helped streamline a lot of those questions. I find people never read those descriptions and it’s a good question. People see it and it tends to fit a bit better. Where everyone parks and everything is all taken care of. When I go to change over the cabin, I’ll text them and tell them to expect a five-star review. That incentivizes them. I have guest books in all the cabins. I only review the people who have positive things to say in the guest book. They’re seeing that I review them.
Jasper: That makes sense. That’s an interesting strategy, leaving a guest book. Awesome, dude. I think it’s incredible. For those people who are thinking about doing some other thing, what would your advice be?
David: I’ll build a sub-page on the site, reach out to me, I’ll have a time you can book, we can skype or chat on the phone. The cabins I found are the best deal, l but there might be something in your local area that’s better. I picked these on purpose, their cost is good but they’re high value. Take a hard look at your situation, your backyard, and see if it’s something that’s going to tick off your neighbors. I’ve got no neighbors, which is awesome. I told my neighbors if you want to stay in them, it’s free for them and their family to get that neighborly sense of comradery. I don’t think I’ve broken any laws. MY strategy with government is stay away from them, I would say that’s a good strategy for this. It’s not illegal, but there’s been no ruling for or against Air Bnb, so it’s unlegislated and wild, wild west. As you know, from Amsterdam, the government wants to get their piece of the pie. I’m still paying income tax, and doing everything above board. I just want to fly under the radar as much as possible. Most complaints are going to be neighbor-driven, so think, “do I have an angry old lady who is going to report me?”
Jasper: I think you’re definitely doing this in a smart way. Do you meet your guests?
David: I do, I try to. If they come during the day I’m usually there. I try to schmooze them or my 3-year-old will pick flowers for them, but because it’s easy to self-check in, there’s 50-60 guests who left positive reviews but I never got to meet them.
Jasper: Do you need to lock these?
David: I always tell people that I don’t lock my doors – I shouldn’t say that. I do lock my doors. It’s safe out here. They want to kind of camp, so they’re generally pretty easy-going people.
Jasper: All right, well, for the listeners out there who are interested in making money with log cabins, if you have a yard or are planning to buy a place with a yard, check out bunkielife.com, as david has said, he’s more than happy to help you out. If you want to go ahead, he can get you a good deal on a log cabin.
David: You’re kind of getting the word out Jasper, if you say you came through Get Paid for Your Pad, I’d be happy to give a discount. Even so, I know I can learn a lot and improve my process, so don’t feel like you have to buy from me. I do think we have the best deal, but if you end up doing the idea, get in touch. I want to see how we can help each other.
Jasper: Thanks so much for sharing your story. Everybody else thanks for listening. We’ll see you guys on Friday for your news episode.