In the booming world of vacation rentals, size isn’t everything. While luxury villas and spacious estates may command attention, it’s often the smaller, well-designed spaces that drive the highest return on investment. These cozy cottages, studio apartments, and tiny homes come with lower maintenance costs, reduced utility bills, and higher occupancy potential—especially when located in desirable destinations. But the key to unlocking their full earning power lies in strategic interior design.
At Joseph Ellen Designs, we specialize in designing high-performing vacation rentals that don’t just look good—they work hard. And when it comes to small spaces, great design is what separates a mediocre rental from a five-star guest experience.
Designing for tight quarters is less about compromise and more about creativity. It’s about maximizing function, flow, and visual impact without sacrificing comfort. Every square inch must be purposeful, stylish, and intuitive. When done right, the results speak for themselves in repeat bookings, glowing reviews, and increased nightly rates.
One of the most powerful tools in a designer’s toolkit is spatial planning. This goes far beyond just where to place the couch or bed. It means carefully evaluating how guests will move through a space, what activities they’ll engage in, and what they expect from a rental in terms of convenience and experience. A small studio with a murphy bed, a compact dining nook, and a cleverly integrated workspace can outshine a larger but poorly organized unit every time.
Open floor plans, while popular in large homes, are equally effective in small rentals. They help eliminate the feeling of confinement and make the space feel more generous. Removing unnecessary visual barriers—like bulky room dividers or oversized furniture—can allow a small space to breathe. However, it’s still important to define functional zones. This can be done subtly through the use of rugs, lighting, wall treatments, and changes in material or texture.
One of the biggest design mistakes we see in small vacation rentals is the use of furniture that overwhelms the room. Oversized sofas, large coffee tables, and traditional dining sets may look luxurious in showrooms, but in small settings, they consume valuable real estate and disrupt the flow. Instead, we opt for compact, streamlined furnishings that deliver comfort without the bulk. Sectionals with low profiles, nesting tables, and armless chairs help maintain openness while still providing seating and utility.
Multifunctional furniture is a must. A couch that turns into a sleeper, a dining table that extends for dinner but folds away when not in use, or an ottoman that doubles as storage can dramatically increase the usability of a space. These thoughtful additions allow one room to serve multiple purposes: sleeping, lounging, working, and entertaining.
Storage is another critical element in vacation rentals, especially those under 800 square feet. Guests want to feel like they can settle in, even if their stay is short. Cluttered countertops, lack of closet space, or nowhere to store luggage can quickly sour an experience. Built-in storage solutions—like platform beds with drawers, window benches that lift up, or wall-mounted shelving—allow for seamless organization without taking up precious floor space.
Vertical space is a frequently underutilized asset in smaller rentals. Think tall bookshelves, floor-to-ceiling cabinetry, pegboard storage in kitchens, or ladder shelves in living areas. These solutions draw the eye upward, creating the illusion of height while adding function. They also prevent surfaces from becoming overrun with miscellaneous items, which can make a space feel crowded.
Color plays an equally powerful role in how a space is perceived. Light, neutral tones—such as soft whites, warm grays, sandy beiges, and muted greens—make spaces feel airy and calm. In contrast, overly dark or heavily saturated colors can shrink a space visually. That said, strategic pops of color in artwork, pillows, or accent furniture can add personality and vibrancy without overwhelming the room.
Mirrors are one of the simplest and most cost-effective ways to make a room feel larger. Placed across from windows or in narrow hallways, they reflect light and extend sightlines, adding depth and dimension. In bathrooms or entryways, oversized mirrors serve both aesthetic and functional purposes.
Lighting is another often-overlooked design element that becomes especially important in small vacation rentals. Overhead lighting alone creates harsh shadows and limits ambiance. Instead, we layer different types of lighting—ambient, task, and accent—through ceiling fixtures, sconces, under-cabinet lights, and table lamps. Not only does this improve visibility, but it also allows guests to adjust lighting to suit different moods and times of day.
Textures and finishes also influence how spacious and cohesive a room feels. Glossy surfaces, glass, and metallic accents help bounce light and add sophistication, while too many competing patterns or materials can make the space feel chaotic. We recommend sticking to a cohesive palette of two to three main finishes (such as matte black, natural wood, and brass) throughout the unit to unify the design.
Kitchens and bathrooms often represent the highest expectations for guests—even in small rentals. While you may not have the footprint for a full-sized kitchen, compact appliances, open shelving, and thoughtful layouts can still deliver convenience and style. In bathrooms, features like wall-mounted vanities, corner sinks, and sliding shower doors save space while keeping things visually open. Add in elevated design details—such as modern fixtures, luxurious towels, and stylish backsplashes—and even a small bathroom can feel like a spa.
Another consideration is the increasing demand for work-from-anywhere amenities. Small doesn’t mean you can skip this. A simple, well-lit desk with an ergonomic chair and nearby outlets can attract digital nomads and professionals. This small investment can significantly expand your rental’s audience and occupancy potential.
Curb appeal still matters—even in compact properties. The exterior is the first thing your guest sees whether on the listing or in person. A fresh coat of paint, clean landscaping, and tasteful outdoor furniture can instantly elevate the perception of your rental. For small patios or balconies, choose bistro tables, vertical planters, and warm string lights to create an intimate outdoor experience.
Technology integration adds another layer of appeal. Keyless entry, smart thermostats, and intuitive lighting controls are now expected in many modern rentals, even small ones. These not only increase convenience for guests but also provide remote management benefits for owners.
Ultimately, the goal is to design a space that lives larger than its square footage. A small space, when thoughtfully planned and beautifully styled, can offer everything a guest needs—comfort, functionality, ambiance, and delight. These are the ingredients of a memorable stay, and memorable stays are the foundation of high-performing vacation rentals.
Curated Decor: Small Touches, Big Impact
In smaller rentals, every decor choice stands out. That’s why curating thoughtful, cohesive accessories is essential. Rather than overcrowding the space with trendy pieces or generic art, focus on intentional styling that aligns with your rental’s vibe and local setting.
For example, a coastal studio might feature natural textures like rattan, linen, and driftwood-toned furniture, while a city loft can lean into matte metals and minimalism. Keep tabletops clean, but include layered elements like books, plants, or candles to create a sense of warmth and depth.
Plants, especially, are low-cost, high-reward items. Whether real or faux, greenery helps soften hard corners and adds a natural energy that photographs beautifully—essential for attracting attention on listing platforms.
The Revenue Connection: Why Design Pays Off
Ultimately, optimizing small spaces is about return on design investment. Well-designed small rentals often outperform larger, less thoughtful spaces because:
- They photograph better in listings
- They feel more welcoming and livable
- They encourage guests to leave positive reviews
- They minimize maintenance and maximize efficiency
These advantages directly influence your revenue. A beautifully styled 400-square-foot apartment with clever storage and curated finishes can command higher nightly rates than a poorly furnished 600-square-foot space.
Design also influences guest behavior. When guests feel relaxed, inspired, and “at home,” they’re more likely to extend stays, recommend your rental, or return for future trips—leading to a stronger bottom line with less marketing effort.
At Joseph Ellen Designs, we understand that good design is not about luxury—it’s about intention. It’s about recognizing the value of each square foot and shaping it to serve your goals, whether those goals are higher occupancy, stronger reviews, or longer stays. We help our clients unlock the full potential of their properties through space planning, furniture curation, lighting strategy, and custom styling—ensuring that even the smallest rentals deliver big results.
So, if you’re working with a compact vacation rental and wondering how to elevate it, we encourage you to look beyond square footage. Focus on quality, flow, and multi-functional beauty. Your investment—and your guests—will thank you.
Ready to turn your small rental into a powerhouse performer?
Connect with Joseph Ellen Designs for a design consultation tailored to your space and goals. Let’s create something remarkable—no matter the size.
Visit josephellendesigns.com to get started.