Business Profiles

New Business takes flight – Those Cabins

Mike and Steph Russell have come up with the perfect add-on to their residential rental property business, that not only offers a solution to their own portfolio, but also other property owners and those needing an additional bedroom or office.

The couple have been property investors since 2008, purchasing ‘do ups’ in Hastings and Flaxmere and doing the hard yards themselves to make their rental homes warm and tidy for their tenants.

As their portfolio grew providing houses to both the private rental market as well as via a partnership with Te Taiwhenua o Heretaunga to provide Transitional Housing for families, they identified that potential tenants needed an additional bedroom.

“We purchased run down properties that required renovations, which we completed ourselves in the evenings and weekends, creating a portfolio that we’re very proud of and that are all Healthy Homes compliant.

“In recent years we have started to get enquiries from some of our current tenants or prospective, needing an extra bedroom, so we started looking for solutions.

The Russell’s had two options – building an additional room on to existing houses or looking for a less permanent alternative.

Building a room was restrictive and a slower process – potentially requiring a resource consent, then a building consent and in recent times there’s been a shortage of building materials and labour shortages.

As well as creating a passive income stream through a housing portfolio, Mike has been a commercial pilot for Air New Zealand and Jet Star, while Steph works in the technical and quality space within the pipfruit industry. Mike was made redundant as a pilot when Jet Star closed its Hawke’s Bay service and has transitioned from planes to trucks, using his skills in the air to on the ground as a truck driver over recent COVID-19 times.

The couple, who enjoy a challenge and working together for solutions, saw cabins as a viable alternative. A cabin could easily be moved on to a property and be up and running very quickly. If the existing tenants moved out, and the new tenants didn’t need the extra room, it could easily be moved to another property.

“We started doing some research and we came across a cabin builder and hire business in Hamilton and he wasn’t interested in the Hawke’s Bay market, so we decided to partner with him.

“We didn’t want a cheap product that wouldn’t last and we were really impressed by the wood paneling, the insulation is amazing as is the double glazing.”

The Russell’s purchased a trailer from their cabin supplier and then their initial order of twelve 4.2m by 2.4m cabins.

They have a target of having a fleet of around 40 cabins. Any surplus cabins can easily be stored at their Bridge Pa property.

“We are very confident that the cabins will be popular as an ‘at home office’ or as the extra bedroom on a rental property or within the horticulture sector for worker accommodation.

“The key for us is to make sure that property owners are happy for an additional building on their properties, so we will ensure that the correct processes are done. It’s certainly a benefit that we are rental property owners ourselves, so we can provide good information and share our experiences.”

Steph says that finding a quality cabin build partner was the easy part, now it was time to create an identity for the cabins and market them to other property owners, investors and accommodation providers.

“How hard could it be … what we didn’t know too much about was building awareness of our new business via social media and advertising.

The biggest challenge so far has been coming up with a memorable brand name.

“We were struggling and every name we thought of we would check the website domain address and they were all gone.

Our IT provider Bruce from Herbert, Harrison and Associates came up with the observation that when people are referring to a destination they say ‘those houses down the road’ and he said why not name the business ‘those cabins’.

“It’s clever and it has worked really well.”