Renting Land or Boondocking?

[ebach00]

Hello, first post here, but long time reader! You guys really know whats up! I have a question for you…

I have several “micro-cabins” that fit on a custom trailer (similar to http://www.tumbleweedhouses.com). We were thinking about trying to “rent” a piece of private land from someone to put several of these portable homes on. It would be great if we could just go on BLM or National Forest Land, but I’m pretty sure you have to move after 14 days. We would like this to be semi permanent (keeping it on a piece of land for 6 months to 1.5 years for say). We also are considering the option of renting them out on Airbnb (not sure how this adds to the legalities of everything).

What would your suggestions be? Thanks ahead of time!!

[bigdogger]

ebach00 wrote:

bigdogger wrote:

ebach00 wrote:

mlts22 wrote:
In any case, if you want to go forward with that, I'd highly recommend checking about an umbrella insurance policy. It is about a C-note or two a year on top of your existing insurance, and provides coverage for virtually anything that you might get sued for.

That's a great suggestion. I'm looking into it now. One of my main concerns is that I want to be able to protect the land owner as much as I can. For example, If I am renting out a portion of the landowners property, I put up a couple cabins and a guest gets hurt, how can I make sure that the actual the actual landowner (not talking about me here) won't be liable?

As a practical matter, you cannot, especially since it appears you are going to be running an off the record business. It seems to me your idea has limited upside and almost unlimited downside. The landowner can become responsible for everything (liability for injuries, environmental damage, land use violations, tax issues and on and on) if they knowingly allow an unlawful business to operate. If the landowner rents you the property for a business, that can cost them lots of special exemptions. For example, in California, property valuation for property tax purposes is fixed to the original purchase price. Should someone who bought a property 30 years ago lease the land to you and it legally changes the property usage from residential to commercial, the taxes on the property could increase 50 fold. If the property was in Texas, that rancher could lose their Ag exemptions or their homestead exemptions. Your plan has the potential to open a really ugly can of worms most people never contemplate until it is too late.

You bring up some really good points and it definitely seems like this will be an uphill battle. One thing I might be able to do is partner with an existing resort and use their commercial property to run the micro-cabins. I'm not sure how this would work out exactly, but I would think since the property they own is for commercial use, it may be possible to form some type of partnership in which we can work together to run a legit micro-cabin side business. Any thoughts on this?

Any lodging business will have to abide by increasingly strict environmental regulations, which means sewage. I cannot imagine those microcabins would pass muster with health authorities. It would also be a serious leap of faith for those resorts to risk their reputations and ratings they have earned over many years by letting an unproven operator put an unproven product under their resort's umbrella. Can you imagine reading a review about a Four Seasons Resort that stated the cabins didn't have flush toilets or reliable electricity?

[ebach00]

bigdogger wrote:

ebach00 wrote:

mlts22 wrote:
In any case, if you want to go forward with that, I'd highly recommend checking about an umbrella insurance policy. It is about a C-note or two a year on top of your existing insurance, and provides coverage for virtually anything that you might get sued for.

That's a great suggestion. I'm looking into it now. One of my main concerns is that I want to be able to protect the land owner as much as I can. For example, If I am renting out a portion of the landowners property, I put up a couple cabins and a guest gets hurt, how can I make sure that the actual the actual landowner (not talking about me here) won't be liable?

As a practical matter, you cannot, especially since it appears you are going to be running an off the record business. It seems to me your idea has limited upside and almost unlimited downside. The landowner can become responsible for everything (liability for injuries, environmental damage, land use violations, tax issues and on and on) if they knowingly allow an unlawful business to operate. If the landowner rents you the property for a business, that can cost them lots of special exemptions. For example, in California, property valuation for property tax purposes is fixed to the original purchase price. Should someone who bought a property 30 years ago lease the land to you and it legally changes the property usage from residential to commercial, the taxes on the property could increase 50 fold. If the property was in Texas, that rancher could lose their Ag exemptions or their homestead exemptions. Your plan has the potential to open a really ugly can of worms most people never contemplate until it is too late.

You bring up some really good points and it definitely seems like this will be an uphill battle. One thing I might be able to do is partner with an existing resort and use their commercial property to run the micro-cabins. I'm not sure how this would work out exactly, but I would think since the property they own is for commercial use, it may be possible to form some type of partnership in which we can work together to run a legit micro-cabin side business. Any thoughts on this?

[bigdogger]

ebach00 wrote:

mlts22 wrote:
In any case, if you want to go forward with that, I'd highly recommend checking about an umbrella insurance policy. It is about a C-note or two a year on top of your existing insurance, and provides coverage for virtually anything that you might get sued for.

That's a great suggestion. I'm looking into it now. One of my main concerns is that I want to be able to protect the land owner as much as I can. For example, If I am renting out a portion of the landowners property, I put up a couple cabins and a guest gets hurt, how can I make sure that the actual the actual landowner (not talking about me here) won't be liable?

As a practical matter, you cannot, especially since it appears you are going to be running an off the record business. It seems to me your idea has limited upside and almost unlimited downside. The landowner can become responsible for everything (liability for injuries, environmental damage, land use violations, tax issues and on and on) if they knowingly allow an unlawful business to operate. If the landowner rents you the property for a business, that can cost them lots of special exemptions. For example, in California, property valuation for property tax purposes is fixed to the original purchase price. Should someone who bought a property 30 years ago lease the land to you and it legally changes the property usage from residential to commercial, the taxes on the property could increase 50 fold. If the property was in Texas, that rancher could lose their Ag exemptions or their homestead exemptions. Your plan has the potential to open a really ugly can of worms most people never contemplate until it is too late.

[ebach00]

mlts22 wrote:
In any case, if you want to go forward with that, I'd highly recommend checking about an umbrella insurance policy. It is about a C-note or two a year on top of your existing insurance, and provides coverage for virtually anything that you might get sued for.

That's a great suggestion. I'm looking into it now. One of my main concerns is that I want to be able to protect the land owner as much as I can. For example, If I am renting out a portion of the landowners property, I put up a couple cabins and a guest gets hurt, how can I make sure that the actual the actual landowner (not talking about me here) won't be liable?

[mlts22]

In any case, if you want to go forward with that, I'd highly recommend checking about an umbrella insurance policy. It is about a C-note or two a year on top of your existing insurance, and provides coverage for virtually anything that you might get sued for.

[ebach00]

bigdogger wrote:
Good luck screening daily and weekly renters. What are you planning on doing, running background checks on everyone who wants to rent a place for three days? Or are you going with the "cross your heart and hope to die" pledge that what they are telling you is true?
Good luck finding that subset of daily and weekly renters that want (and can actually properly maintain and use) rental properties that are off the grid. Your average renter will have no experience or appreciation for a composting toilet, a generator or solar for power and having limited water.
Good luck finding someone who just wants a place in the middle of a field. When most people think of boondocking, they think of great places that are otherwise inaccessible. Not the middle of a corn field. Great boondocking locations have more going for them than just isolation. Like another poster implied, total isolation for the sake of isolation mainly appeals to meth cookers, escaped convicts, pedophiles and the Unabomber, none of whom are a great demographic to target for a lodging business.

While Airbnb is not perfect, it does allow you to screen the individuals whom will be staying at your property (you rate them and they rate you). You may be right about your average renter not appreciating the "off the grid" amenities, however in the area surrounding San Francisco, I believe that people are fairly informed on these eco-responsible attributes.

Also, I wouldn't rent a piece of property that was just a "corn field", I would keep looking until I found the perfect patch of land, that was in a location which could access trails, swimming holes, etc. I'm not tied down to one location, so as long as I can figure out the zoning laws, then I can take my time looking for the right property.

[ebach00]

N7SJN wrote:
What do you do with the grey water? I don't know of a composting toilet that can handle the grey water produced by daily living.

You would get an "incinerating toilet" (like this one: http://incinolet.com/) which would incinerate most of your waste. I would also hire someone to clean the cabins on a regular basis. They would also be responsible for disposing of any waste, re-stocking water, etc.

[mlts22]

On the risk of getting the thread locked, I'd recommend that the OP consults a legal professional who can give you advice that is 100% relevant to your state, city, district, and county. Stuff like codes, rental laws, real estate, and so on. It may be expensive, but it is a heck of a lot cheaper than hiring the same attorneys to defend you should someone sue... or go bankrupt while on the property, demand a free year of rent, then trash things.

Here in Austin, places like Airbnb irk neighbors, especially around a busy weekend. Local neighborhoods end up encountering the added traffic (it isn't unheard of for visitors to pack those rentals like sardines with 10+ people sleeping on the floor), strange people in and out, accusations of illegal drug use and sales, and even zoning violations (since Airbnb falls into running a hotel, there are city and state bed taxes.) Not to mention damage done to a place. The de facto hotels are becoming so common that both the city and local neighborhood organizations are actively cracking down on these.

If I were setting up a rural property so others can visit, the most I would do is have a water faucet, a couple 30A receptacles, and a couple sewage clean-outs (note, they are not called "dump stations".) I'd also carry an umbrella insurance policy in addition to homeowner's on the property. That way, if someone parked on top of your septic tank, their vehicle fell in, and they sued you, you would be covered. Or, if two people visiting got into a fight with one another, and both decided to sue the property owner. I'd also make sure not to charge so the local county can't say that there is a commercial RV park there.

[kgarrett9999]

Contact the manager of the public land where you want to place them. BLM, etc do have various agreements with individuals regarding the use of the land for outfitters, etc. They may be able to accommodate you for a fee or percentage of the fees that you collect.

[bigdogger]

Good luck screening daily and weekly renters. What are you planning on doing, running background checks on everyone who wants to rent a place for three days? Or are you going with the "cross your heart and hope to die" pledge that what they are telling you is true?
Good luck finding that subset of daily and weekly renters that want (and can actually properly maintain and use) rental properties that are off the grid. Your average renter will have no experience or appreciation for a composting toilet, a generator or solar for power and having limited water.
Good luck finding someone who just wants a place in the middle of a field. When most people think of boondocking, they think of great places that are otherwise inaccessible. Not the middle of a corn field. Great boondocking locations have more going for them than just isolation. Like another poster implied, total isolation for the sake of isolation mainly appeals to meth cookers, escaped convicts, pedophiles and the Unabomber, none of whom are a great demographic to target for a lodging business.

[JaxDad]

I suspect the biggest challenge will likely be with local government.

I've not seen too many areas where you're allowed to park a single RV, let alone several without the appropriate zoning.

A single park model connected to services is usually considered a residence, a TT that isn't connected to permanent services isn't.

[Bumpyroad]

so you are buying these units from Airbnb in the hopes of making this a successful venture. sounds almost like a pyramid scheme to me.
bumpy

[loulou57]

N7SJN wrote:
What do you do with the grey water? I don't know of a composting toilet that can handle the grey water produced by daily living.

That was another thought.

When you rent out a residence, over the years I have rented houses out, there is a lot more than just finding the right person and picking up a cheque every month.

I really think it would take a lot of these units to make your idea profitable.

[N7SJN]

What do you do with the grey water? I don't know of a composting toilet that can handle the grey water produced by daily living.