Should You Invest In a Tiny Home?

Hello World! Welcome Friends! Perhaps you’ve begun planning for your golden years or want to downsize to less stuff to make more room for experiences. Either way, you’re considering investing in a tiny home. Is this lifestyle right for you? What should you consider before taking the plunge?

Many roadblocks to tiny living are human-created, but they can create considerable hiccups on the pathway to your dream. It pays to be aware of the downsides and benefits to avoid costly disappointments. Should you invest in a tiny home like Moncasa? It can be a dream come true, but here’s what you should know first.

The Many Benefits of Tiny Homes

Why explore tiny living? There are scores of reasons, but here are three of the biggest draws many people cite for switching to the tiny home lifestyle.

1. Lower Energy Use

Fossil fuel prices continue to rise. Worse, the emissions created by their use contribute to climate change. You might be interested in saving money, the planet or both, and you can accomplish these objectives in a tiny home.

Consider these impressive statistics when debating whether to invest in a tiny home:

Tiny homes use only 7% of the power of traditional homes to keep the lights running.
Heating the average tiny home generates only 558 pounds of carbon dioxide (CO2), compared to around 8,000 for a traditional home.
Cooling the average tiny home creates only 286 pounds of CO2, compared to about 4,000 pounds for a traditional home.

It gets better. Because tiny homes don’t require ductwork, you can use mini-split heat pump technology for whole-home climate control. Seek an energy-efficient model using a refrigerant that doesn’t deplete ozone to maximize your energy savings and minimize your carbon footprint.

2. Ease of Maintenance

Another reason for the rising popularity tiny homes enjoy is their ease of maintenance. When your home has fewer components, there’s less to break.

Furthermore, many people who invest in tiny homes build theirs from the ground up. Even if you use professional contractors for help, observing and assisting with the process gives you the know-how to diagnose anything that goes wrong and fix it with minimal fuss.

If you establish your tiny home as an accessory dwelling unit (ADU), you might free yourself from lawn work. Let the kids handle the mowing while you enjoy retirement in your granny pad. Of course, the less square footage your home takes, the more room you have for a garden. If this sounds like an ideal lifestyle for you, try looking at tiny houses for sale and see if any fits your needs!

3. Opens Up Options

Perhaps the best reason for investing in tiny homes is that they are versatile for multiple purposes. Consider the many uses, such as:

ADUs: Do you want to move your aging parents “in” without having them share your home? You can buy backyard granny suites online these days.

Adult children: If rental rates in your area are exceptionally high, you can give your adult children a headstart on saving for a home by sparing them rent — while still getting them out of the house.

Short-term rental: Are you seeking passive income? Investing in a tiny home for your backyard can help you rake in sweet short-term rental cash.

Tiny communities: Are you loaded and looking for a killer investment opportunity? Communities for tiny homes offer residents greater freedom, flexibility and outdoor living space. Most critically, such communities could represent the future as humans continue fighting climate change. Few cities provide them, opening doors for investors with deep pockets.

Passive income: Do you have acreage and know someone with a tiny house? Let them lease some of your land for their home. Renting land is cheaper than an apartment, saving them money while providing you with passive income.

Common Roadblocks to Tiny Homes

Tiny homes sound like incredible investments. Why aren’t they everywhere? You should know the common roadblocks that prevent many people from pursuing the lifestyle.

1. Finding Land or Parking

Finding land to place your tiny home can be problematic if you don’t already own acreage. Many communities have building and zoning regulations for safety and to protect surrounding property values. These building codes often specify minimum square footage requirements. Even a tiny home on wheels (THOW) is no failsafe, as many locations restrict RV parking on residential streets, and HOAs ban them from driveways and backyards.

2. Locating Contractors

If you’re handy, you can build a tiny home from the ground up by yourself. However, most people need some help. The problem is builders want to turn a profit. They make much more money from constructing a larger project than a smaller one, and finding licensed individuals with sufficient time to take on a little gig can be tricky.

Pros and Cons of Tiny Home Resale Values

Another factor to consider when deciding if you should invest in a tiny home is the resale value. The concept is so new that there isn’t much data to analyze. However, two factors may influence your decision.

1. High Demand

Demand for tiny homes has grown recently. A survey by HomeAdvisor found that 86% of people would live in a tiny house, and 78% would consider installing one on their property. You’ll likely have no trouble finding a buyer if you decide to move.

2. Lack of Financing

If you think getting a traditional mortgage is tough, financing a tiny home is even more complicated. You may need a personal or RV loan if you can’t secure a builder loan. These have stricter qualifications, limiting your buyer pool.