This 26-year-old pays $0 to live in a 'luxury tiny home' she built for $35,000 in her backyard—take a look inside
In 2019, I bought a three-bedroom, 1,400-square-feet house in Atlanta, Georgia for $196,000. I figured I could earn extra income by renting out the spare rooms on Airbnb, especially since I traveled a lot for work and was rarely home. Unfortunately, the bookings dried up in 2020. No one wanted to share a house with a stranger in the early days of the pandemic. My work travels also stopped, so I was living alone in a house that felt too big. But that May, as I stared out the kitchen window into my huge backyard, something clicked: I could use that space to build a tiny home to live in, and fully rent out the main house.

How I built my luxury tiny home

Before getting started, I had to submit building, electrical and plumbing permits to the city planning office. Then I purchased a shed from Liberty Storage Solutions and hired a local contracting team to pour a concrete slab foundation. They got to work in October 2020. Overall, it cost me around $35,000 to build the home, which includes the prefabricated shed structure, labor and material costs. Instead of taking out a bank loan, I cashed out $8,500 in stocks and put about $20,000 on my credit cards to pay for everything. I was able to pay off this debt last year. While the house was being built, I rented out my primary home and rented a room from my neighbor for $300 a month.

Precious' tiny home sits in the back corner of her 7,280-square-foot backyard. Photo: Jeffrey Beard for CNBC Make It

After we finished building the 296-square-foot tiny home in March 2021, I immediately rented it out on Airbnb for a few months to recoup costs. By charging between $89 and $129 per night and $1,300 for monthly leases, I was able to bring in almost $32,000 in gross rental income. And this January, I moved into the tiny home to save on living expenses. Here are the monthly associated costs for both homes: Mortgage and property taxes: $1,200

$1,200 Electricity: $190

$190 Water: $110

$110 Internet: $80 Total: $1,580 All of this is covered by the $2,725 I make from renting out the main house, which means I'm able to live in my tiny home for free.

A look inside my loft-style backyard home

To give the place a light and airy feel, I painted the walls a coastal blue shade and added some rustic touches like a wooden ladder leading to the loft's queen-sized mattress.

Nestled under the sleeping loft is a small desk, which Precious uses to check emails and catch up on work. Photo: Jeffrey Beard for CNBC Make It

In addition to the daybed that doubles as a couch on the main floor, there's a full bathroom, kitchen and breakfast nook.

The rustic barn sliding doors provide easy privacy. Photo: Jeffrey Beard for CNBC Make It

The bathroom features a shelf for extra storage and a glass shower door, which makes the room feel bigger. Jeffrey Beard for CNBC Make It

My favorite area is the kitchen. Most people are surprised to see that it has a full-sized fridge and extra large sink.

The kitchen has an induction cooktop and a small breakfast nook. Jeffrey Beard for CNBC Make It

The eight separate windows, wall mirrors and glass shower door all make the space feel bigger. I sometimes forget I'm living in a shed.

Small details like this mirror make the space feel larger and more homey. "I sometimes forget I'm living in a shed," says Precious. Jeffrey Beard for CNBC Make It

The "tiny house" lifestyle

I've had to downsize my wardrobe and shoe collection. But rather than getting rid of clothes I still want to keep, I store some at a friend's house. Every few weeks, we do a wardrobe swap.

Precious' dog Sachia also lives in the tiny home with her. She plans to entertain friends in the backyard when the weather gets warmer. Photo: Jeffrey Beard for CNBC Make It

I don't have friends over very often, but once the weather gets warmer, I plan to use the fire pit as a hosting area. Having this home has given me a ton of real estate options, including rental income and backup housing for myself or aging family members. I believe that tiny homes will play an important role in offsetting the global housing crisis. Last year, I gave a TEDx Talk about how they can help create a sustainable sharing economy for land.

When it's nice outside, the spacious porch is a great place to enjoy the fresh air with some coffee. Jeffrey Beard for CNBC Make It

In 2021, after realizing effects of vacation rentals on the real estate market in Atlanta, I stopped listing my properties for short-term rental on sites like Airbnb. Renting out more and more space for vacations means less space for folks who need long-term homes. I've since decreased my portfolio and am renting to local students and low-income workers. My plan is to add an attached guest suite to the main home and provide even more stable housing.

Precious' least favorite part of her home is the loft area, which doesn't have much clearance for anything but sleeping. Jeffrey Beard for CNBC Make It