Maximizing ROI with Capsule Houses: A Case Study on Short-Term Rentals

Introduction

Investing in capsule houses has emerged as a cost-effective way to generate income through short-term rentals. With a low acquisition cost and high occupancy potential, these compact living units can yield impressive returns. In this article, we will break down the financials, including initial investment, revenue potential, operational costs, and ROI, to determine how profitable this venture can be.

1. Initial Investment

• Purchase price per unit: 15,000€
• Installation & setup (optional): 2,000€ (foundation, utilities, minimal furnishing)
• Total Initial Investment: 17,000€ per unit

(For the sake of simplicity, we assume land is already available or rented separately.)

2. Revenue Projection

Short-Term Rental Model

• Nightly rate: 50€
• Occupancy rate: Assuming a conservative 70% occupancy (≈ 21 nights/month)

Monthly Revenue:
$50€ \times 21$ nights = 1,050€/month

Annual Revenue:
$1,050€ \times 12$ = 12,600€/year

3. Operating Costs

While capsule houses have low maintenance costs, short-term rentals require some ongoing expenses:

Expense	Monthly Cost (€)	Annual Cost (€)
Cleaning (after each stay)	150€ (7.50€ x 20 cleanings)	1,800€
Utilities (electricity, water, WiFi)	100€	1,200€
Booking platform fees (10%)	105€	1,260€
Maintenance & Repairs	50€	600€
Insurance	30€	360€
Miscellaneous	50€	600€
Total Operating Costs	485€	5,820€

Net Profit Calculation

Net Monthly Profit = Revenue - Operating Costs
= 1,050€ - 485€ = 565€/month

Net Annual Profit = 12,600€ - 5,820€ = 6,780€/year

4. ROI Calculation

Payback Period (Break-Even Point)

$$\frac{\text{Initial Investment (17,000€)}}{\text{Annual Net Profit (6,780€)}} \approx 2.5 \text{ years}$$

This means you recover your initial investment in 2 years and 6 months.

Annual ROI Calculation

$$\frac{\text{Annual Net Profit (6,780€)}}{\text{Initial Investment (17,000€)}} \times 100 = 39.9\%$$

This translates to a 39.9% annual return, significantly higher than traditional real estate investments.

5. Scaling the Business

If you were to invest in multiple capsule houses, the model scales efficiently:

• 5 capsule houses generate 5,250€/month in net profit.
• 10 capsule houses generate 10,500€/month, creating a solid semi-passive income stream.

Additionally, strategies like increasing the nightly rate, optimizing occupancy through marketing, or cutting costs (e.g., self-cleaning) can further boost profitability.

Conclusion

Capsule houses present a high-ROI investment opportunity, particularly in markets with strong demand for budget accommodations, digital nomads, and eco-tourism. With a break-even period of 2.5 years and an annual ROI near 40%, this model outperforms traditional rental properties. Investors seeking fast capital recovery and high-yield real estate investments should strongly consider this approach.