Financial Advice

Is a "Tiny Home" the Answer?

Is a "Tiny Home" the Answer?

Some individuals have altered their way of life with the tiny house movement. They have adjusted to fewer belongings and smaller spaces and are looking to save money and focus on better experiences and relationships. But, is a tiny home right for you? 

What is a Tiny Home?

A tiny home is characterized as a single-family home that is around 400 square feet or less. 

Tiny houses come in various styles. You can have either a modular, manufactured home or traditional stick-built home, both constructed on a permanent foundation. These are at the higher end. There is also a method that uses a mobile trailer as the foundation, but conventional materials for construction. Some people have even converted their storage container or shed into a tiny home. 

Advantages of Tiny Homes

As with any important financial decision, you should consider both the advantages and disadvantages of tiny homes before committing to investing in one.

Some advantages of investing in a tiny home are:

  1. You Get All the Modern Conveniences with Tiny Homes

    You do not have to sacrifice modern living conveniences just because your house is tiny. Tiny homes can still have air conditioning, a washer and dryer; even a private sleeping area on a second floor. You have nearly the same options of customization with a tiny home as you do with a standard home.
  2. It is Easier to Live Mortgage-Free in a Tiny Home

    Tiny homes typically cost a fraction of the price of a traditional home. You can often build a tiny home for the amount you would have to use for a down payment on a typical home, or use the cash-out proceeds from the sale of your existing home to fund your tiny home purchase.
  3. There is Less to Clean Since there is Less Space

    Less space typically means less to clean. You could probably take 30 minutes out of your day and:
    • Fold and put the laundry away
    • Organize
    • Do dishes
    • Sweep

    Now, compare that to the often couple of hours it takes to complete the same chores in a bigger, standard home.

  4. You Save Money For Other Things

    In the U.S., the average sales price of new houses in May 2017 was $406,400, according to the U.S. Census Bureau. Tiny homes, on the other hand, can cost as low as $8,000.

Because tiny homes create "a minimalist lifestyle", this means you enjoy decreased maintenance and expenses which frees money and time to live your life. 

Disadvantages of Tiny Homes

Of course, there are some disadvantages to consider with tiny homes, including:

  1. Tiny Homes May Have Questionable Legal Status in Certain Communities

    Some neighborhoods or communities may have certain building codes dictating the minimum size of a house. In the case of a tiny home, it might not receive approval for construction. Tiny homes might be subject to zoning requirements as well, with restrictions on the number of stories, width, height, and more. If you live in a tiny portable home, some jurisdictions will classify your home like an RV, rather than an actual house. Therefore, when you decide to embrace this lifestyle, be sure to review all the administrative requests and zoning codes to ensure you stay compliant.
  2. Storage Space is Minimal

    Tiny homes don't provide a whole lot of storage space, which can make it hard for you to do certain things. For instance, while you may save time when it comes to cleaning your home, meal prep is a different story. It can be more difficult to prepare your meals in advance since you have limited storage space. That means you cannot buy in bulk, so you will make more trips to the supermarket, spend more and will be forced to prepare meals and cook every day.

  4. You Have Limited Privacy

    If you share your tiny home with another person, privacy could become an issue. While you can have a lock on the bathroom door or a second-floor bedroom, it is always going to be a little cramped when living with another person.

Tiny homes aren't for everybody. But, they can be your next step if you have already embraced a minimalist lifestyle. And, if you like to travel all over or be free of mortgage payments, a tiny low-cost home may be just the answer. But, even with a tiny home, you still have a big decision to make to ensure it is the right match for your needs.

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