An Overview on Tiny Housing

With housing prices rising, environmental impact concerns growing, and an increasing resistance towards consumerism, many people have becoming interested in tiny housing. So called tiny houses do not have a universally agreed upon definition, but generally refer to any form of housing that’s around 100 to 500 square feet. For some perspective, that could be the size of a large shed, a studio apartment, or a shipping container.

Below we address a number of the issues that someone thinking about buying a tiny home should keep in mind. While there are definite advantages and the lifestyle may speak to you as an individual, there are numerous other considerations deserving of your attention.

Overview

Naturally, building a smaller space will cost less. However, because of economies of scale, the prices per square foot of a tiny home, which is around $300, is about double that of a traditional home. Broadly speaking, the average cost of a tiny house can range from $30,000 - $60,000. Obviously, the price can vary dramatically based upon the actual size and amenities, with some costing under $10,000 and others over $150,000.

There are two main types of tiny homes: one is constructed on a trailer, while the other is built upon a foundation. Those built on wheels tend to be less expensive, though you’ll still have to factor in the cost of the trailer or foundation depending on which option you go with. A trailer for example, could cost $4500 - $9000.

If you end up with a tiny house with wheels, you shouldn’t be subject to property taxes as it would be considered “personal property” (like a car). If your tiny house has a foundation however, this is would be treated as “real property” and subject to property taxes just like any other house.

While we often think of traditional homes as lasting for decades if not longer, tiny homes may only last up to ten years, depending of course on the craftsmanship, materials used, and how well it’s maintained. As a result, while a traditional home generally appreciates in value over time, a tiny home may actually depreciate, or decrease in value.

Hidden Costs

In addition to taxes and a trailer or foundation, there are additional costs to consider aside from the price of the actual tiny house. For example, you may need to purchase new furnishings if your existing furniture and possessions don’t fit in your new home. This could mean giving up your bed or couch, trading in a desktop for a laptop, smaller kitchen appliances, and cleaning supplies like mops and brooms.

For the items that you simply can’t give up, some people will end up renting a storage unit. Though this may seem counterintuitive to some, it’s a way for some people to ease into a more simplified lifestyle.

When you purchase the house itself, you may also be charged for permits, just like you would when building or adding on to an existing traditional home. You’ll also need to buy or rent land to put your new tiny house on, unless you plan on living in the backyard of a friend or relative.

Finally, you’ll need to consider utilities such as power and water. This could cost you as little as $250 to connect to existing electrical lines or in excess of $5000 in a more rural area. If you decided to live off the grid, you’ll still probably want to set up off-system services such as solar panels and a septic system.

While the price of the house may be less, not everyone can afford to buy a tiny house with the money they have sitting in a savings account. That said, it can be more difficult to get a mortgage loan because banks may not feel that your tiny house has enough value in it to cover the loan in the event that they needed to foreclose and sell your house to recoup their losses. As stated earlier, most tiny homes actually depreciate in value over time.

When it comes to insurance policies there are generally two types depending on how your tiny house was constructed. Mobile home insurance can cover a house built upon a permanent foundation, while RV insurance would cover one built on wheels.

Practical Living

Living in a tiny home is not for everyone. By necessity, tiny homeowners can only hold on to the bare essentials. Some people will welcome this as an opportunity to downsize. Others will struggle being forced to give up amenities and luxuries they’ve become accustomed to.

With less space, you’ll have to go food shopping more often as the storage space will be limited. It also means that you won’t be able to buy in bulk. Some people see this is a positive and an opportunity to buy more fresh food, while for others it means a higher cost per unit when shopping.

Along with a smaller space, comes energy efficiency. Whether you’re heating or cooling your place, you should be able to do so more quickly and at a lower cost. When it comes to cleaning, you’ll also have less space to clean and be able to finish sooner. Still, some tiny homeowners have stated that they need to clean more frequently because with less space, even a tiny bit of clutter makes a big impact.

If you’re single or a couple without children in the home, a tiny home may be enough space for you. However, if you have children, a large family, or simply like to have guests over, your place will fill up quickly. You’ll have to accept the fact for instance, that you may not be able to host Thanksgiving.

Many people will make up for the lack of indoor space by simply visiting with their guests outside. This can work to an extent, but obviously climate and current weather conditions must be considered.

Location and Zoning

One of the most important questions you’ll have to address early on is where you’ll put your new tiny house. This will depend on where you live, as zoning regulations will vary from place to place.

One family living the tiny home lifestyle explained that having a home built on a trailer is great because it allows them to move to a new city whenever they want, just like someone living in an RV. Yes, they need to rent a truck to move the house, but the fact that it’s on wheels makes moving their house much more practical.

However, while they have the freedom to move at will, finding a place to move to isn’t easy. It requires planning ahead and learning about the zoning regulations in the city you plan to relocate to. In one place, your home may be considered an RV, which means that you can rent land in an RV park. In other municipalities, you may need to stay in a trailer park. In still other towns and cities, they may have yet to have decided how to classify a tiny home. In this case, even the town itself may not know where you can legally stay.

In some cases, a tiny house may be classified as an accessory dwelling unit, allowing them to be placed on the property of another homeowner. Think of a cottage in someone’s backyard that they use as a guest house.

In addition to where you’re allowed to legally place a tiny house, building codes will vary from place to place, which means that a legal house in one town may not be legal in the next. For example, in San Francisco, no house can include a room smaller than 70 square feet.

Other examples include a requirement that the ceiling be at least seven feet and six inches high or that at least one room be greater than 120 square feet. There will also be requirements when it comes to ventilation, plumbing, electricity, lighting, emergency egress, smoke and carbon dioxide detectors, etc.

Summary

Tiny houses are an interesting idea, especially for individuals interested in a simpler lifestyle. Still, there a lot of legal issues that need to be worked out and a number of unforeseen expenses that must be considered before a person decides to take the plunge. Still, the potential is there for saving money, being more energy efficient, and having the freedom to move to another city while literally staying in your own home.