If there were an ideal scenario for a passive income on a lifestyle block, it would probably look a little like this: you do a very small amount of work, and money appears in your account on a regular basis.

It sounds nice, but unfortunately this scenario is something of a pipedream for many rural properties. Most arrangements that allow you to make passive income from your land – such as Airbnb – often require a significant capital investment and setup costs, while the traditional enterprises of farming, market gardening, timber or orchards all demand a considerable amount of time and energy in order to make a living.

But these days, rural properties are cherished for their scenic values just as much as their production output, and a new type of business is aiming to capitalise on that appeal. Off-grid eco-cabin providers have been gradually gaining a foothold in the New Zealand accommodation market, by providing rural property owners with ready-made dwellings to host paying guests on their land.

In these models, the business takes care of almost everything: the construction and delivery of the cabin, the administration and booking of guests, even the supply of the coffee, tea, soap and cleaning products that guests use. It’s the nearest thing possible to a passive income – the landowners get a share of the accommodation revenue, and all they do is provide a suitable site on their land, and prepare the cabin in between guests.

“We provide them with the cabin – we have it all fully set up,” says Charlie Chrisp of Unyoked – an Australian-based business that now has six cabins set up on properties throughout NZ.

“It’s got tanks for collecting rainwater, it has solar power, and a composting toilet. It’s also on wheels, so it’s not defined as a building, so we get around a lot of the council issues.”

Founded in 2017, Unyoked’s market strategy is to facilitate a mutually beneficial arrangement between rural property owners looking to diversify their income, and city dwellers desperate for some country air and respite from the rat race. For the landowners – some of whom are farmers – it’s a way to utilise areas of land that aren’t suitable for traditional activities such as farming and growing, and offset any disruptions to other income streams. So if something like drought strikes, hampering the productivity of a sheep farm, the farmer has another trickle of money coming in.

“If you look at it from the landowners perspective, it’s a really good source of sustainable passive revenue in conjunction with other revenue streams on their property,” says Charlie.

Unyoked features

Although Unyoked’s cabins are constructed in Australia, many materials, products and amenities are NZ-made in an effort to promote local products.
This includes:

  • Bar fridge
  • Gas stove, powered by LPG
  • Crockery, pots and pans
  • Bench and sink
  • Queen bed Sleepyhead Zero mattresses
  • Linen and blankets
  • Composting toilet by Green Loo
  • Shower
  • Water provided by rainwater or farmwater supply
  • Gas heater
  • Sulis outdoor cedar wood-fire hot tub (select cabins only)
  • Raglan Roast Coffee
  • McLeod’s craft beer
  • Co-branded JMR & Co x Unyoked Cocktails
  • Webster’s organic tea
  • Cast iron fire cooking equipment from Ironclad Co
  • Sunnup recycled plastic outdoor matts

“We form a partnership with them for three years. We do all of the promotional material, all of the PR, the marketing, optimization, and we fill the cabin for them. And in return, they essentially do the cabin management, and then receive a decent percentage of every booking fee.”

But the biggest – and sometimes most appealing – difference from the regular Airbnb model is that the hosts don’t have any engagement with the guests.

“We manage that whole entire process for them. They don’t see the customer. They don’t hear the customer. They don’t deal with bookings, they don’t deal with cancellations. And we train them as to exactly how to use everything in the cabin, and how to manage it effectively in the most efficient way possible.”

With cabins across the UK, Australia and NZ, the company pitches itself towards urban millennials – busy people that haven’t spent much time outdoors and for whom the idea of being disconnected from their screens, the internet and their hectic lives is a refreshing and much-needed novelty. Its mission is to provide a space for guests to “feel free in nature” and attain a sense of presence and mindfulness that they wouldn’t normally feel in their daily lives.

And while that might be more relevant in Australia and the UK than NZ – an outdoor-mad country that enjoys an abundance of accessible camping sites and tramping huts – it doesn’t lessen the delightful experience of staying in one of these cabins.

Custom-built in Australia to provide a rustic yet rudimentary feel, the solar-powered cabins are equipped with mostly the basics to allow guests to more easily attain the presence that comes from a distraction-free experience. Linen and bedding is provided, along with a shower, composting toilet, a gas cooker, and a mini fridge. Some of them have other features such as gas heaters or outdoor wood-fire hot tubs.

Knowing that its target clientele are millennials who might struggle to be relieved of their usual comforts, Unyoked also stocks the cabins with boutique coffee beans, an arsenal of coffee-making paraphernalia, craft beer and canned cocktails.

“Our cabins are designed with a huge amount of intentionality to slow down and only have what you need to have a really good experience in the bush. Sure there’s a few creature comforts but it’s not a chocolate on the pillow kind or Instagram photo with a cheese board type of thing. It’s more minimal than that, but it’s extremely comfortable.”

To guarantee guests a restorative, disconnected experience, Unyoked vets properties to ensure they are the right fit for a cabin. A property must have sufficient scenic features or vistas and

be large enough so that the guests can enjoy privacy without encountering the landowners or other people. When a landowner contacts Unyoked, Charlie will head out to meet them and have a look at the property. If it goes ahead, all the landowner has to do is ensure access, and potentially level out a small platform for the cabin’s trailer.

The cabins must also be within two hour’s drive of a large city to allow urban customers to access without too much car travel. But it’s not all comfort and convenience – guests can’t drive directly to the cabin, instead having to park elsewhere on the property and walk 10 minutes or so the rest of the way, carting their gear with supplied wheelbarrows. As Charlie says, it all fits in with Unyoked’s mission to get people outdoors, off-grid and thriving in nature.

“The idea is to replicate that feeling that you get after coming back from travel. So there’s a big mental health element to it, and there’s an environmental aspect as well. There’s huge amounts of research indicating the benefit of nature to reduce stress and improve cognitive function. And when you’re facing a big wide landscape, you have this feeling of awe. And so we’re all about accessing that feeling for when you need it the most.”

For Chris Vella, who hosts three cabins on his property two hours outside of Sydney, Unyoked’s marketing strategy is paying substantial dividends. Looking for ways to make a sustainable passive income from his property, he first considered selling timber from pine trees, or else planting something that could yield a profitable harvest. None of those options felt right, but then he came across the idea of cabin accommodation and Unyoked’s model. He met the founders, the cabins went on the land, and the customers – and the money – appeared almost straight away.

“I was extremely surprised at how full they were from day one until now. We went through months of 100% occupancy – not one day available. We’re at about 95% most of the time.”

“If I wanted to, I could rely only on the income from those cabins to support our family. It would be enough.”

Earning enough from the cabins, Chris is able to hire cleaners to prepare each one after each guest. All he has to do is change the gas bottles, and clean the firepit out and some cobwebs off the cabin, which takes less than an hour in total each Sunday.

Smaller players

While Unyoked brings with it an established business model honed on overseas properties, there is a smaller NZ player that is using lifestyle blocks here as its testing grounds. Run by two  brothers, Taranaki-based company Repose has three cabins at various locations across NZ. Like Unyoked, the cabins are delivered ready-made and fully set up for hosting. The brothers, Jack and Max Anderson, build the cabins themselves in NZ, take care of all the marketing and bookings through Airbnb, along with the structural and technical maintenance of the buildings.

The key difference between the two companies is their target market. While Unyoked has tailored its strategy around a deliberate theme of unwinding through nature, Repose has more of a rugged feel, and is less intentional with its marketing.

“I think we market our cabins more like private DOC hut,” says Max. “We put a huge amount of emphasis on a uniquely Kiwi experience, I guess.”

The other big difference between the two is Max and Jack don’t have a set criteria for properties that want to host a cabin, considering smaller blocks of land further away from larger cities. Two of their cabins are in rural Taranaki, and tend to be popular with trampers walking the Pouakai Crossing. When someone applies, they’ll head out to the land to meet the owner and inspect the property for suitable sites.

“It’s very much a case by case basis,” says Jack. “We’ve often found that a host might not know that they have such a special spot on their land, but when we come to visit we find three or four good spots with great views. We don’t want to put anyone off from the outset, we prefer to meet with the people and I guess view the land for ourselves and discuss options. The big thing is meeting the right people. There’s lots of nice places out there, but it’s about finding the right host as it’s more of a partnership than a business arrangement.”

Running a small, relatively new business, Max and Jack are also open to different financial models with landowners. For example, someone can opt to simply provide a spot on their land for a proportion of accommodation revenue, or they can help fund the cabin’s construction, therefore owning a stake and receiving a larger share of the earnings. Knowing that hosts have other jobs, Jack and Max are open to negotiating about the maximum number of reservations or bookings the cabins will see in a given week.

For Tim Paul, this flexibility and ease was what prompted him to host a Repose cabin on his 5.5 acre lifestyle block in Taranaki.

“It was so easy!” he says. “We looked at doing a cabin ourselves, but we’re still developing the property and haven’t got a lot in the way of time. Then one day a (Repose) pamphlet turned up in the mail and my wife and I talked about it and thought well, that’s actually a good little idea.”

Max and Jack came for a visit, scouted out a spot down the bottom of the property, and the cabin turned up within a few weeks.

“The timing was impeccable. Max just worked his backside off getting everything ready. They’re really good young fellows. They just work so hard and they take care of literally everything, except the cleaning of the cabin.”

“Access to the cabin is pretty raw, but I think that’s part of the charm. The only thing we had to do was something we were going to do anyway, and that’s get water down there. So I run a 32mm pipe from a stock tank up the top and just gravity feed it down to the cabin.”

Because Tim doesn’t own the cabin, he knows that he’s getting a smaller portion of the accommodation revenue than if he owned it outright. Then there’s the cleaning of the cabin, which increases in proportion with the bookings. However, the fact that the set-up, administration and marketing of the cabin is out of his hands makes the arrangement a “no-brainer”.

“Once it was set-up, my wife and I thought ‘why the hell didn’t the pamphlet end up in our mailbox two years ago! It’s been pretty good man.”

Repose features

Like Unyoked, Repose stocks its cabins with NZ-made products to support local businesses.
This includes:

  • Bar fridge
  • Gas stove, powered by LPG
  • Crockery, pots and pans
  • Bench and sink
  • Breakfast bar and stools
  • Queen bed
  • Linen and blankets
  • Incinerating toilet by Cinderella
  • Shower
  • Water provided by rainwater or farmwater supply
  • Ironclad cookware
  • Roaring Meg fireplace

“It really comes down to being able to get along with people that are presenting themselves to you. These two young fellas are particularly professional, super courteous, can work together as a team so it’s quite cool.”

Knowing that there are multiple players now operating in this niche, Max and Jack say they’re set on growing the business and expanding their fleet of cabins to the South Island. However, they’re aware of the risks of expanding too quickly and having too much of their own capital tied up in idle cabins. For this reason, they make the cabins to order once they find a host.

“I think we can build a cabin in eight to 10 weeks. We don’t want to be stuck with three or four cabins without a home so we want to grow with the market I guess. If the right host is there with the right bit of land. We’d be very happy to go into partnership with them.”

How much do hosts make?

A key consideration for landowners is how much they’ll make from each booking. While some commercial arrangements differ or are unable to be disclosed, we’ve attempted to provide a rough snapshot of potential from each business.

UNYOKED

  • Advertised cost per night: $269 weeknights, $299 weekends.
  • Estimated host earnings per night: $150-160 night – roughly 50% or the booking revenue.
  • Host earnings per year considering five night per week occupancy: $38,750. Unyoked aims for hosts to earn a minimum of $35,000 per cabin, and most overseas hosts have two to three cabins

REPOSE