While most adults have been chasing after the American dream of having a larger home for the past several decades now, there’s a new trend that’s starting to take shape in the housing market.
Have you ever heard the saying, “less is more?”
Surprisingly, several home buyers are seeking tinier places to live that don’t even amount to 500 square feet! One of the most obvious benefits of owning a smaller home is that you could be spending tens of thousands of dollars less on one than you would on a traditional home.
So are you wondering if a tiny house would work for your current situation? Here are several of the pros and cons of owning a tiny home that can help you make a decision as to whether owning one is right for you.
Tiny House Living: Pros and Cons
What are the disadvantages of a tiny house?
Before we get into talking about the advantages of owning a tiny house, let’s take a look at what some of the cons may be. This can help you determine whether owning a tiny house is right for you.
Financing Difficulty
If you thought that getting a loan for a larger home was difficult, think again. It’s very unlikely that most banks will work with you to provide you with a standard mortgage loan on a tiny home, mainly because there simply isn’t enough collateral involved.
So what can you do?
There are still a few ways around this problem. Some tiny homeowners are able to borrow money from family and friends. But even if that is a laughable suggestion due to your current situation, you can also consider taking out a personal loan from companies like SoFi. Lastly, a home equity line of credit is another option. Once you’ve paid off your current home’s line of credit, you’ll be able to move into your tiny house.
Not Enough Storage Space
As its name suggests, a tiny house does not come with much storage space. This means that if you’re a family with a bunch of possessions, you’ll have to downsize significantly to make things work. And if you have children, you’ll still have to deal with tripping over toys that are cluttered on the ground everywhere. It also wouldn’t be a good home-buying decision if you deal with claustrophobia.
Limited Entertainment Space
One of the most obvious disadvantages of owning a tiny home is that there isn’t a lot of room for entertaining family and friends. It wouldn’t be a good idea on your part to suggest having a holiday dinner at your place or for any guests to stay the night. There simply isn’t enough room in a tiny house to accommodate everybody.
Zoning Laws
While it certainly doesn’t take a lot of land to build a tiny house on it, some cities make it difficult to do so. That’s because zoning laws can come into effect, and a 200 square foot dwelling doesn’t often meet the minimum square foot requirements. But tiny homeowners still find ways around this.
Some are able to find the right-sized lot for their tiny home in a trailer park. Others go as far as building a home on a lot that they will eventually put up for rent while placing their tiny home in the backyard labeled under “vehicles” or “outbuildings.”
What are the positive features of a tiny house?
While there are a number of key factors why a tiny home isn’t right for everyone, there are a few reasons why owning one might make sense for you. These are some of the biggest ones.
Fewer Expenses
On average, tiny houses cost about a tenth of what a full-sized house does. Which comes to about $23,000 versus the national average of 272,000 for a home. That’s a huge difference! This allows tiny homeowners to put money towards other expenses and more into their retirement savings instead of so much into their homes.
No Mortgage
Wouldn’t it be amazing to not owe a dime on your house each month? Reports have shown that as much as 68% of tiny homeowners own their home outright, compared to 29% of regular homeowners. And if you were to owe money on your tiny home, it wouldn’t take near as long to get it paid off.
Easier to Take Care of
Not only is it easier to keep a smaller place clean, but there’s also less you have to repair as well. Without having to worry about so many household chores throughout the week, this provides you with more time for relationships, hobbies, and work.
How long does the average person live in a tiny house?
Tiny home living has only recently become a popular way of life for certain individuals so there’s not a lot of information on the subject. But with the brief research, we do have, most of the people that own a tiny home do so for about 3 to 5 years.
Why such a short period of time, you ask? Well, a lot can happen in that small span of time. Some people decide that it's time to get married and have children, and a tiny house is no longer a functional space that makes a whole lot of sense to meet their needs. Others feel that they’ve been able to go out and see the world like they wanted to, so it’s time to move on to another phase in life.
Are Tiny Homes a Bad Investment?
Unfortunately, tiny homes do not hold on to their value well, so they’re not exactly a smart buy if you’re looking for a long-term investment. That’s because they are considered personal property instead of real estate. This is especially the case for tiny homes that are built on wheels. You can expect these homes to depreciate at about the same pace as a truck or an RV. That’s probably not what you wanted to hear, but if you’re planning on living in a tiny home for a long period of time, it might still be worth it.
Do tiny homes appreciate in value?
Regardless of whether your tiny home is built on a solid foundation or not, it will still depreciate over time. Because of this, tiny homes can be much harder to sell and you can almost guarantee that you won’t make a profit from it. That doesn’t mean that it’s impossible to sell one, just be aware that you may find it difficult to sell when you’re ready to part ways with it.
Do tiny homes last?
The answer to this question mainly depends on the building materials that were used in its construction and how well the home was put together. Whether it’s built on wheels or has a solid foundation also plays a role in the longevity of the home. If the homeowner is willing to keep up on the regular maintenance of it, a tiny home could last up to 20 years without having to deal with any major issues.
However, the overall lifespan of a tiny home is generally between 30 and 50 years. If you’re planning on living in a tiny house for a long duration, make sure that durability and a strong foundation are higher up on your list of expectations when making your decision.
Owning a tiny home is not for everybody, especially for families with two or more children. The lack of space and bumping into one another would become too much. But if you’re just one or two adults that love the simplicity of tiny house living, this lifestyle might make sense for you.
Do you think owning a tiny home is right for you?
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