🏠 "Backyard Homes" or Overpriced Trailers?

This is The Level Ups. Modern business news for the future business leader (in plain-Jane English).

Today:

• A small home in your backyard.

• Why pre-made real estate is the future.

• What’s next?

Let’s get into it.

Estimated Reading Time:

Backyard Homes Changing The Game:

The Co-Founder of Airbnb, Joe Gebbia, recently started Samara, an innovation in modular design.

They look good and start at $289k. Some people say they're overpriced trailers. Judge for yourself.

This one-bedroom unit is 550sq/ft.

They use solar panels, connect to your existing water supplies, and remember, this is in San Fransisco.

So while it might seem like a lot of money, you have to consider that the average home in SF is USD 1.3M.

Doesn’t seem so expensive in comparison. Especially since buyers can rent it out for market rent (around $2900/month for a unit of this size). Suddenly looks like a no-brainer.

You can use their website to configure your unit like you’re purchasing a Tesla. It ships to your house from there, and they drop it and install everything in your backyard. It’s amazing.

This is the configurator (you should try it out):

To put all this in perspective, a 500sq/ft apartment in Vancouver (so 50sq/ft less) currently goes for $689k in this *down market.* To be fair, the modular home in California is USD, so it’s more like 400k Canadian.

Expect many more of these in the future. Sure, city regulations may slow them down, but it’ll become common in other cities eventually.

Genius In The Process:

Building homes gets expensive (shocker), but it’s not just because of materials. A big part of it is the way it's done.

Materials are brought to the site, they may get damaged, workers show up, and builders pay for that labour. It adds up fast.

Samara’s backyard homes, their introductory product, are different. They are built off-site using machinery.

Instead of having tradespeople on site with potential injuries and overtime, machines do all the work. It’s more of an assembly line in a car factory.

They’re shipped to the site pre-made. Saves money, time, and headaches. Those cost savings are reflected in the price tag.

This is often called “pre-fabrication” or “pre-fab,” but I’m not one to get stuck on technical terms. That’s a good one to know, though.

The Future:

Looking ahead, it’s not just about building homes. It’s about building in space.

Think about it: there’s no way humanity will be using labourers in space to slap sheet metal together. Definitely not.

Everything will be pre-made here on earth, shipped to space, and connected among the stars. Our future homes will all be built this way. Why aren’t they already?

Even if it’s a smart business, sometimes we don't need to overcomplicate things.

Besides, real estate is already a highly lucrative old industry. People running that game don’t have many reasons to change things, especially if they don’t enjoy innovating. Seems to be the case.

But space, that’s the next game. This is only part of the equation.

Thanks for reading!

See you tomorrow.