Creating an inviting and functional space on a limited budget is a common challenge for short-term rental owners. Small spaces require thoughtful planning, but with the right strategies, you can transform even the tiniest areas into stylish and comfortable accommodations that guests will love. This comprehensive guide offers practical, cost-effective solutions to maximise the potential of your compact rental property.
Understand the Psychology of Small Spaces
Before diving into specific design elements, it’s important to understand how guests perceive space:
Light colours create the illusion of spaciousness
Clutter makes spaces feel significantly smaller
Strategic lighting draws the eye and can make rooms feel larger
Vertical space is often under-utilised but essential in small accommodations
Multi-Functional Furniture
Investing in quality multi-functional furniture is perhaps the most important budget decision you’ll make:
Sofa Beds and Sleeper Solutions
Quality sofa beds provide seating during the day and sleeping accommodations at night. Look for:
Pull-out designs with proper mattresses rather than thin fold-out options
Compact futons with storage underneath
Murphy beds that fold into walls (more expensive initially but save tremendous space)
Budget tip: Check charity shops, Facebook Marketplace, and end-of-season clearance sales at furniture retailers. Many quality pieces can be acquired for 50-70% off retail price.
Extendable Tables
A table that expands only when needed preserves valuable floor space:
Drop-leaf tables that fold flat against walls
Nesting coffee tables that separate for extra surface area
Folding dining tables that accommodate 2-4 people
Budget tip: Upcycle an old table by sanding it down and painting it with durable furniture paint. Add new handles or legs for a modern refresh at a fraction of the cost.
Smart Storage Solutions
Storage is crucial in small rentals:
Ottoman storage benches provide seating and hide blankets or pillows
Under-bed storage containers for extra linens and supplies
Wall-mounted desks that fold away when not in use
Budget tip: IKEA’s Kallax shelving units are affordable and extremely versatile—they can function as room dividers, TV stands, or nightstands while providing ample storage.
Maximise Vertical Space
The walls and ceiling represent valuable real estate in small accommodations:
Wall-Mounted Solutions
Floating shelves rather than bulky bookcases
Wall-mounted reading lights instead of table lamps
Hanging planters rather than floor pots
Pegboard systems for kitchens or entryways
Budget tip: Brackets and wood from hardware stores can create custom floating shelves for a fraction of the cost of pre-made options.
Door and Behind-Door Storage
Over-the-door hanging organisers for bathrooms
Behind-door hooks for coats and bags
Slim rolling carts that fit between furniture and walls
Budget tip: Command hooks and other removable hanging solutions are renter-friendly and inexpensive.
Create Visual Space
Strategic Paint Choices
Light, cool colours like soft blues, greens, and greys make walls recede
Painting the ceiling the same colour as the walls (or slightly lighter) creates a seamless look
Consider painting a single accent wall in a darker shade to add depth
Budget tip: Quality paint is worth the investment—you’ll use fewer coats and achieve better coverage. Look for paint+primer combinations to save time and money.
Mirror Placement
Mirrors are a designer’s secret weapon in small spaces:
Position mirrors opposite windows to reflect natural light
Full-length mirrors create the illusion of doubled space
Mirrored furniture adds function while visually expanding the room
Budget tip: Check charity shops and car boot sales for mirrors with dated frames—a coat of spray paint can transform them into modern statement pieces.
Lighting Layers
Proper lighting makes small spaces feel larger and more inviting:
Ceiling fixtures that spread light evenly
Task lighting for reading and cooking areas
Accent lighting to highlight architectural features
Floor and table lamps to create pools of light in dark corners
Budget tip: Update existing fixtures with new shades rather than replacing entire lamps. LED bulbs cost more initially but save money over time while providing better light quality.
Smart Textile Choices
Fabrics and soft furnishings dramatically impact how a space feels:
Window Treatments
Hang curtain rods close to the ceiling and extend beyond window frames to create height
Choose light, sheer fabrics that allow natural light to filter through
Consider roller blinds that disappear when fully raised
Budget tip: Ready-made curtains are much more affordable than custom options. Add iron-on hem tape to adjust the length without sewing.
Rugs and Flooring
Use a single large rug rather than multiple small rugs to unify the space
Select light colours or subtle patterns that don’t overwhelm
Consider the same flooring throughout small spaces to create flow
Budget tip: Vinyl plank flooring has come a long way in quality and can be installed as a DIY project over existing floors.
Declutter and Minimise
One of the most budget-friendly design strategies is simply reducing what’s in the space:
Essential Furnishings Only
Every item should serve a purpose—ideally multiple purposes
Leave breathing room between furniture pieces
Avoid filling every wall with art or shelving
Budget tip: Creating a minimalist space often costs nothing—it’s about careful curation rather than accumulation.
Smart Accessorising
Choose a cohesive colour palette for accessories
Limit decorative items to those that serve a purpose or have significant visual impact
Use plants strategically—they add life without creating visual clutter
Budget tip: Rotate seasonal decor items rather than displaying everything at once. This refreshes the space regularly without requiring additional purchases.
DIY Projects with High Impact
Upcycled Furniture
Paint tired wooden furniture in modern colours
Replace handles and knobs on existing pieces
Add wallpaper to the backs of bookcases or inside cupboards
Budget tip: Chalk paint doesn’t require sanding or priming, making furniture makeovers quick and easy.
Removable Wallpaper and Decals
Transform bathroom tiles with waterproof vinyl stickers
Create a feature wall with removable wallpaper
Use decals to add interest to plain walls
Budget tip: Contact paper comes in various designs and can be used to upgrade countertops, tabletops, and even appliances temporarily.
Tech Solutions for Small Spaces
Smart Home Features
Voice-controlled lighting reduces the need for table lamps and switches
Wireless speakers eliminate bulky sound systems
Digital photo frames replace multiple framed photos
Budget tip: Entry-level smart bulbs and plugs have become quite affordable and add value to the guest experience.
Space-Saving Electronics
Wall-mounted TVs free up surface space
Compact appliances designed for small kitchens
Multi-port charging stations reduce cord clutter
Budget tip: Refurbished electronics often come with warranties but cost significantly less than new models.
The Power of Styling
Create Zones
Even in a studio apartment, define areas for different activities:
Use rugs to delineate “rooms” within an open plan
Position furniture to create natural divisions
Consider a decorative screen or open bookshelf as a room divider
Budget tip: Rearranging existing furniture costs nothing but can completely transform how a space functions.
Strategic Emptiness
Create moments of “negative space” where the eye can rest
Don’t fill every shelf and surface
Leave some walls blank to balance busier areas
Budget tip: This strategy literally costs nothing but makes your existing pieces look more intentional and high-end.
Summing Up
Creating an inviting small space on a budget is about making strategic choices rather than compromising on style. By focusing on multi-functionality, vertical space, and thoughtful curation, you can design accommodations that feel spacious and comfortable for your guests without breaking the bank. Remember that less is often more in small spaces—choose quality over quantity, and let each piece earn its place in your rental property.
The most successful small-space rentals feel intentional rather than cramped. With these design strategies, your compact property can compete with larger accommodations by offering a thoughtfully curated experience that meets all your guests’ needs while delighting them with clever, stylish solutions.
If you’re creating vacation rentals on a tight budget, rather than compromise on your website, consider using our Start Up Plan, this helps you spread the cost but still gives you the advantages of a direct booking website, afterall the sooner you start to own your guest data, the quicker you will reach that ideal of reducing reliance on OTAs and safeguarding your future business. Complete the form below to be sent a copy of our brochure direct to your inbox.
Photo by Devanshi Kulshrestha on Unsplash – green planter
Photo by Hutomo Abrianto on Unsplash – white design
Photo by Rebecque on Unsplash interior photo with cat on a sofa