I thought you’d like to tour Karen’s 265 sq. ft. backyard cottage in Berkeley, CA.

Karen originally intended to use her backyard tiny house for her own personal use but she soon realized renting it out would be a great way to earn extra income.

As you walk onto the front porch and through the french doors to go inside you are greeted by the living area, kitchen and bathroom. And when you go upstairs you have the sleeping loft with storage cabinets.

Karen had New Avenue Homes build this tiny cottage for her right in her backyard. Below you can take a full video tour of the backyard cottage filmed by our friends at Fair Companies.

Tiny Backyard Cottage for Extra Income and Asset-Building


Images © New Avenue Homes





















Images © New Avenue Homes

 Video: Tour Karen’s Backyard Cottage

Video By: Fair Companies

Would you live in or rent out a tiny backyard cottage like this one on your property?

Let us know your thoughts in the comments below.


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Andrea has lived simply in small spaces for more than 7 years and enjoys sharing her space saving (and space multiplying) tips from experience.

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  • Debbi Cobern August 7, 2014, 1:16 pm

    This is it! Best design ive seen except for the stairs. Senior citizen with RA. For young healthy folks I bet this will be a winner!

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  • Brian August 7, 2014, 2:24 pm

    Nice home beautifully finished. Thankyou for sharing. Cheers from Aus.

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  • Linda August 7, 2014, 4:19 pm

    Great idea! Except that I’d live in the tiny house and rent out the big house… much more income and pay off the mortgage faster!

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  • Dominick Bundy August 7, 2014, 5:58 pm

    Totally adorable little house. California must have more lenient zoning laws. In upstate New york no way would we be able to build such a adorable dwelling under 400 sq. ft. kudos to California..

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  • Joe August 7, 2014, 9:23 pm

    Saw this house a couple of years ago on HGTV – think it was on ‘This New House’.

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  • Eroca Brawne August 8, 2014, 3:33 am

    Beautiful home, great layout.

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  • gino schafer August 8, 2014, 7:48 am

    You cannot build a second home on a lot where I live, especially in the city. The reasons for this are that the more buildings you have on a lot, especially in close proximity, the higher the fire danger.

    I found it funny that she said she had “no idea what to do with such a large backyard” so she built a house in it. I would consider her yard small. Before she built a house in it.

    I would have put in a garden.

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  • Pat O'Connor August 8, 2014, 1:24 pm

    I would definitely live in such a house and would like to build one. What has me confused is that she built this for $17K. Prices I’ve seen for the same size range from about 10K to 99K for the same size. What’s the real cost for building a tiny house?

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    • Alex August 10, 2014, 10:19 am

      The real cost is relative. Depends on what you want! :)

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  • Rue August 8, 2014, 4:40 pm

    This one has all the things a truly tiny home usually skimps on…full bath with tub, space for a real couch and not just those storage-bench seats, full fridge….the only thing I’d still like to have would be stairs, but the ship’s ladder is a workable alternative.

    The desk tucked next to the kitchen is a nice addition; could be used for workstation or dining. And I bet that closet hides a washer/dryer.

    I also like that there are railings on the loft. The lofts that just open into space make me a bit nervous (I’m not fond of heights).

    Plus the fit and finish are very nice. All around, very inviting and livable looking.

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  • Dawn August 29, 2014, 5:28 pm

    I adore this house! This is exactly what I’ve been dreaming of for my retirement. I would make some very minor changes based on taste and personal needs but still, I love house. Now I have 8 years to figure out how and where. I hope by then more tiny communities have sprouted up.

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  • Yvonne November 23, 2014, 11:33 am

    I skimmed over this one yesterday, and am glad I took a closer look today. Is there room for a w/d? If not, I would do a walk-in shower only, and a stackable w/d set rather than the tub. I may never get to build and live in a tiny house, but I’m having fun dreaming.

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