Investment and Development stats/calculations

 

Placing DROP Structures on properties and rented out via digital platforms such as; AirBnB or VRBO show great potential amidst a growing desire for glamping, tiny homes, small spaces and technological advancements.

 

AirBnB and VRBO are amongst a growing number of companies competing for their share in short term property rentals. With massive investments in technology, the ease and power of these tools to rent out your properties is staggering. In 2017 AirBnB had a company valuation of $31 billion dollars (http://www.vizlly.com/blog-airbnb-infographic/), most of which is going back into marketing and product design. Through the course of the last 8 years use of short term properties went from 200,000 uses per year to 100 million rentals per year. AirBnB has 3 million current listings on the books, which is more rooms combined than any hotel chain in the world. The next company not to be overlooked is VRBO, with another 1 million listings and a market valuation of $4 billion+.(http://fortune.com/2014/03/12/growing-quietly-in-airbnbs-shadow/)

 

‘Glamping’ is a newer term and concept but is also showing a positive trend. A recent study shows 37% (https://aytm.com/blog/market-pulse-research/glamping-survey/) of traveler’s showing interest towards glamping in the future and 22% saying they are planning on booking in the next two years. Among those people who already enjoy camping the number jumps to 46%.

 

Millennials at a collection of 15% say they would definitely live in a tiny home. (http://restoringsimple.com/tiny-house-statistics/)  This number helps push the case that people see value in using smaller spaces, more so than have been previously considered.

 

ROI calculations*

*caveats: There are many variables in the calculation making every situation unique; location, competition, cleaning fees, climate, proximity to major centres, building cost, rental opportunities, market costs, vacancy and length of rental seasons. We are illustrating a few different situations for the purpose of calculations and we would be happy to investigate your specific project.

 

Example 1: Banff region (Alberta, Canada) - (4) Mono’s w/glass walls, front & back.

  • Approximate cost of Mono’s :$150,600.00 CAD

  • Standard 100 day per year rental

  • $300 per night for 1 bedroom studios in the area (according to AirBnB)

  • Host service fee is 3% or $9.00

  • Cleaning fee’s are charged in addition to the nightly rate

 

Total Investment in (4) - DROP Structures $150,600.00 CAD

Total yearly earnings $120,000.00 CAD

Service fee $3600.00

Net earnings $116,400.00 CAD

Total time to pay off structures: 1.29 years*

*this does not include the cost of: land, power, services or wash facilities

 

Example 2: Vancouver Island, BC - (10) Base Mono’s

  • Approximate cost of Mono’s: $289,000.00 CAD

  • Standard 100 day per year rental

  • $100 per night for 1 bedroom studios in the area (according to AirBnB)

  • Host service fee is 3% or $3.00

  • Cleaning fee’s are charged in addition to the nightly rate

 

Total Investment in (10) - DROP Structures $289,000.00 CAD

Total Yearly earnings $100,000.00 CAD

Service Fee $3000.00

Net Earnings $97,000.00 CAD

Total time to pay off structures: 2.97 years