Should You Invest In A Tiny House?

In recent years, tiny houses have attracted so much attention to themselves.

Though many believed it to be merely a quirky project when it first started, tiny house movement is fast developing into a serious housing style, primarily as it represents a socioeconomic trend for minimalistic living.

However, as popular as they have become, the number of people willing to explore this option remains somewhat low.

Investors, real estate agents, home buyers, and property managers are skeptical about the financial sustainability of the tiny home trend.

In the opinion of 30 per cent of Fixr’s respondents, first time home buyers are the ones likely to opt for tiny houses. This is because many of them view tiny homes as a way of entering the property market without gaining a substantial mortgage.

Some real estate professionals also speculate that tiny houses are part of a niche market, and this makes them difficult to resell.

But perhaps there are more ways to make money in the tiny housing trend market or enjoy living in one than you think. Here, we have provided the benefits and downsides of investing in a tiny home, as well as some considerations that should influence your tiny house investment decisions. Read on.

How tiny is a Tiny Home?

First things first, how little does a home have to be for it to be considered a tiny home?

Tiny houses have an average size of between 100 and 400 square feet.

At most, a tiny home shouldn’t exceed 500 square feet.

They usually have a lofted bedroom as well as a single bath.

When constructing this kind of home, builders use hyper-efficient design, double-duty furniture, open floor plans, high ceilings, and micro-appliances so that they can create the illusion of space. You can either construct this home yourself or buy it.

There are two types: tiny house on wheels and tiny house on foundation.

Small homes on the wheel can be put on trailers and moved anywhere. On the other hand, tiny homes on a foundation are unmovable because they have foundations and usually involve a lot of legal intricacies to build. Many of the people that choose small homes do it to enjoy a simpler and free life. Of course, money is a factor too.

How much do tiny houses cost?

In terms of buying cost, tiny homes are significantly lower than in traditional houses. However, the price does depend on the size of the home, location, upgrades, and design.

You can purchase a tiny home that is as low as $4,490 from Amazon.

According to research, tiny homes in the United States cost between $10,000 and $40,000, especially if you’re buying from a tiny house building company. However, tiny luxury homes are worth a lot more. They go up as high as $150,000,

Advantages of Investing in a Tiny House

• Affordable cost

Because tiny homes have smaller square footage than traditional homes, it is only natural that they’re less expensive and more accessible.

Tiny home kits can cost as low as $10,000. And it is much easier to construct a tiny home yourself. It saves money.

This is opposed to big homes where the median price of construction is up to $292,000, and let’s not forget the taxes, maintenance, and utilities.

Because the tiny house is more affordable, it is a better investment choice for beginner investors who can’t afford the coat of popular investment properties. Homeowners too can easily opt for it when they don’t have enough budget for a big home.

• Easier to Manage

Large spaces require more maintenance and management than small ones. As a realtor or homeowner cleaning, and renovating wouldn’t be a big problem at all if your own a tiny home. There are things you wouldn’t have to worry about like electricity and heating bills, pool maintenance, damaged roof, and others. Tiny house projects are generally much easier to tackle.

• Portability

One significant advantage that little homes have over big ones is its portability and movability. Because tiny buildings can be moved as a single unit, investors can transport the properties to locations where they are demanded more. It also affords homeowners who love adventure the opportunity to take their home with them wherever they go. Fixr’s respondents believed that 30 per cent of buyers tend to invest in a tiny house so they can spend more on travel and other areas of their lives.

A tiny home offers the necessities of housing without the maintenance commitment of a traditional single-family house.

• Alternate Source of Rental Income

Tiny homes have a stable rental appeal. There’s a big chance that you’ll be able to gain more units and a higher investment return if you rent out your tiny home. You can consider turning a part of your land into a tiny house rental lot. Apart from being in demand, tiny homes are cheap, manageable and are thus perfect for creating a profitable investment portfolio. If you rent out multiple tiny houses at a time, you could make more money over a short period.

Disadvantages of investing in a tiny home

• Cost of Extra Property

Perhaps the biggest issue with building or buying a tiny home is finding land on which to put it. Whether you decide to buy or rent a plot, the cost is quite alarming. At least purchasing property will cost nothing less than $ 200,000. This is a significant barrier to many home buyers.

• Meeting Legal Requirements

It is quite a money consuming to purchase land for your tiny home. However, a much bigger problem is locating an area or town in which tiny homes are accepted.

Most municipalities do not support houses that are smaller than 1000 square feet. While this is partly for the sake of safety, it also has something to do with preserving property values.

As such, many tiny house dwellers who are bent on their minimalistic lifestyle have to device a means to evade this regulation.

• Expansion Problems

Though a tiny home may appear to be sufficient for a family at present, what do they do when the family expands?

In tiny house construction, there is hardly any opportunity to remodel the house or enlarge it. Even if you could extend it a little, it wouldn’t be healthy for children because living in a crowded space can affect them negatively. Besides, what if you need to buy more personal property like clothes and gadgets?

The home will only keep getting smaller and smaller the longer you live in it. With tiny houses, you can’t completely take away the issue of limited space.

The Future of the Tiny House Trend

It is true that tiny houses still have a lot of catching up to do, especially if they will attain widespread acceptance in a world where people believe that big is always better. However, there is a really strong belief that the demand for smaller houses will rise. Some vast developments that reflect this trend is being effected.

Regions such as Portland, Seattle, and Austin are undertaking a ‘tiny houses for the homeless’ projects, and are recommending the trend as the way to providing housing to its homeless residents. In Kansas City, a tiny-home village has been built to house homeless veterans.

In the end, the choice of whether or not to invest in this real estate fad is in your hands. Factors like your financial capability aims and personal taste will guide you.

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