Reality TV shows like “Tiny House, Big Living” and “Tiny House Nation” have popularized the notion of stripping down one’s lifestyle to pay off debt and save money. Depending on which definition you use, a tiny home is one that’s less than 400 square feet to 600 square feet, but some tiny homes can be as little as 160 square feet to 200 square feet.
All the hype surrounding tiny homes might pique the interest of individuals looking for a financially and environmentally sustainable lifestyle. But what looks good on reality TV can be much less appealing in real life — especially if you have children. Before making a huge mistake, you should do your research and learn the true cost of getting a tiny house.
Last updated: Jan. 20, 2020
Types of Tiny Homes
Tiny homes come in several varieties. At the higher end are traditional stick-built or modular homes constructed on permanent foundations. A more common style is built on a mobile trailer using conventional construction materials. It’s also possible to convert a shed or storage container into a tiny house by using the structure as the home’s shell.
But no matter how you construct your tiny home, you might encounter the same problems with it — so, keep reading to see why you should think twice before springing for that purchase.
1. Tiny Homes Are a Fad, Not a Trend
The difference between a trend and a fad is staying power. Trends endure and evolve, whereas fads are met with wild enthusiasm for a short time, but then they fizzle.
The tiny-home movement might’ve sprung from the trend toward minimalism and experiential lifestyles, but many proponents dive in without considering the significant challenges inherent in living in a tiny space — suggesting that tiny homes are a fad, not a trend.
2. Tiny Homes Are Expensive
The small size of tiny homes doesn’t make them much cheaper to build — in fact, the typical tiny house costs more per square foot than larger houses do, in part because larger construction jobs make for more efficient use of resources.
The average 2,000-square-foot home costs about $150 per square foot to build, according to HomeAdvisor, whereas tiny homes constructed by Tumbleweed Tiny House Company — one of the best-known tiny-house builders in America — typically cost over $300 per square foot.
3. It Might Be a Home, but It’s Probably Not a House
Many tiny homes are built on trailers, which makes them recreational vehicles. In fact, the Tumbleweed Tiny House Company calls its products “tiny house RVs” and builds its homes according to the Recreational Vehicle Industry Association certification standards. By Tumbleweed Tiny House Company’s own definition, its products are licensed RVs, not houses.
4. Houses — Even Tiny Ones — Must Be Built to Code
Tiny homes built on foundations typically must meet the same code requirements as any other house, but the cost might be disproportionate — and even prohibitive — if you’re working with a bare-bones budget. You might have to prepare the land for construction, pull permits, order inspections and pay to bring utility service to the site.
5. Many Tiny-Home Owners Aren’t Tiny-Home Dwellers
Owners of tiny homes don’t necessarily live in their houses full time. Often, these owners use their homes as vacation getaways or trade up for larger homes. The challenges that come with living in a tiny home aren’t so challenging if you’re only there for a few nights per year.
6. Millennials Are More Likely To Regret Their Home Purchase
Of the 42% of homeowners who have regrets about the size of their home, 33% wish they had bought a larger one, and just 9% wish they had gone smaller, according to a 2017 Trulia survey. Homeowners ages 18 to 34 are the most likely to regret not choosing a larger home, at 29% of millennials versus 17% of overall respondents.
7. There’s No Space To Expand Your Family
A tiny home that works for individuals might not work for couples. And, what works for a couple might not accommodate a baby and the supplies that come along with having one. Even bringing a pet into the mix can overcrowd your tiny space.
8. Tiny Homes Limit Where You Can Live
While some cities have loosened zoning restrictions to accommodate tiny homes, most cities don’t allow tiny homes on wheels to be parked in residential yards or used as permanent residences without the appropriate permits. You’ll have to research local codes and ordinances before you make any decisions, or park your tiny home in an RV park or other designated areas.
9. It’s a Tough Lifestyle
Tiny living takes a lot of work. You’ll have to go grocery shopping more often, pick up mail from a post office box and do frequent small loads of laundry in a compact washing machine. You might also have to empty out a composting toilet, climb in and out of a sleeping loft and grapple with multifunction furniture that needs to be opened or closed — or folded and unfolded — every time you use it.
10. Tiny Living Isn't Always Functional
Tiny living looks like a simple lifestyle at first glance, but it can actually be rather chaotic. Tiny houses often have low ceilings and tight transition spaces that require residents to constantly duck and squeeze as they navigate their surroundings, prepare meals, take showers and climb into bed. Even eating takeout becomes a chore when you lack adequate dining space.
11. The Cramped Space Wears On Your Mental Health
An overcrowded home has been linked to increased stress and anxiety in families, likely due to lack of privacy and disrupted sleep. Children might also find it difficult to locate a quiet place to read or complete schoolwork in such close quarters.
12. Parking Your Tiny Home Isn't Free
Unless you’re allowed to park your tiny home in someone’s backyard, you’ll have to find a place to put it — and that costs money. You can purchase land if you have enough savings, or lease a lot — perhaps in an RV park or manufactured home community — for a fixed price per month.
13. There's a Limit to How Small You Can Go
Even if zoning laws allow you to build or park a tiny home, you’re not necessarily out of the woods. Those laws might also mandate the minimum size of the lot that your home sits on — typically 1,000 square feet — which could interfere with your dreams of tiny living.
14. A Tiny Home Might Not Be Legal in Your City
State and local governments have their own building codes for homes built on permanent foundations. Permanent tiny homes often don’t meet those standards, so you’ll need to check the tiny-house ordinances for the specific city you’re living in.
15. Tiny Homes Are a Bad Investment
A tiny home built on a trailer isn’t real estate, even if you own the land that it’s parked on. Tiny homes on wheels are personal property, and like other personal property — such as cars and RVs — they depreciate over time. Real estate, on the other hand, usually appreciates over time.
16. You Might Get Stuck With It
In the event that you want or need to sell your tiny home, finding a buyer won’t be easy. Tiny homeownership has more barriers to entry than traditional homeownership — there simply aren’t as many people willing to live in 400 or fewer square feet.
17. RVs Are Less Complicated
Unlike tiny homes — which require utility hookups unless they’re made for off-the-grid living — RVs are designed to be self-contained, so they have their own water and power supplies, plus a septic tank to hold waste. Also, RVs are usually lighter and more aerodynamic than tiny homes, so they’re safer and easier to tow.
18. Tiny Appliances Can Have Big Costs
From built-in vacuum systems that clean up pet hair to rainwater recycling systems to rotation devices that keep tiny homes facing the sun to maximize energy efficiency, construction trends can drive the cost of your tiny home way up.
19. Financing Can Be Difficult
Unless your tiny home meets zoning and building code standards and is built on a permanent foundation, it won’t qualify for traditional mortgage financing. You’ll need alternative financing, such as an RV loan, a personal loan or a credit card, which can have higher interest rates and require a better credit score than a mortgage loan.
For example, you need a 690 credit score for an RV loan from Good Sam Finance Center. The credit score requirement jumps to 740 if you want to put 0% down for a unit that costs between $10,000 to $50,000.
20. Tiny Homes Typically Cost More Than RVs
Construction prices for a completed tiny house start at $37,000, according to Tiny Home Builders. On the other hand, you can get a 902-square-foot mobile home with three bedrooms and two bathrooms for approximately $27,000, according to Mobile Homes Direct 4 Less.
21. There Are Better Ways To Be a Minimalist
There’s a lot to be said for living simply within your means and rejecting materialism. You can adopt that lifestyle now by selling extra belongings, vowing not to buy any more unnecessary items or even downsizing to a smaller — but not tiny — home. You’ll have a chance to build equity in your property instead of investing thousands into a potential fad that won’t appreciate.
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About the Author
Daria Uhlig is a personal finance, real estate and travel writer and editor with over 25 years of editorial experience, including past positions with The New York Times Co. and Oxford University Press, where she was a long-time contributor to The Oxford English Dictionary. Her work has been featured on The Motley Fool, MSN Money, AOL, Yahoo! Finance, CNBC and USA Today.