When Tiny Homes Become a Big Problem

Tiny homes can bring you down

It’s becoming a common trend for homeowners nowadays to downsize to a tiny home. This is certainly a departure from the “bigger is better” concept that defined American homes from 1978 onwards.

When you talk about a tiny home, this typically refers to a house of between 80 and 500 square feet. Although, the tiny house movement is not a new one, you can probably credit HGTV and the network’s “Tiny House” series for making the concept more appealing to the average American family.

However, what those TV shows are not telling you is the hidden costs that are tacked on to your new project that may make your tiny house a big problem.

Below are some of the details those shows are not telling you:

  1. It’s more expensive to build a tiny house

On average, it’s more expensive to build a tiny house per square foot compared to the average home. This is simple economy of scale. For instance, the average cost per square foot for the tiny house will range from $200 to $400. In comparison, an average 2,000 square foot home will cost around $150 per square foot.

  1. Furniture, furnishings and accessories age faster

Your world becomes smaller so you naturally use the space in your tiny home more. That’s exactly what makes the tiny house more appealing, the fact that there’s no wasted space. However, replacing busted cabinets or sagging couches can be expensive because they are more customized.

  1. Beware of the zoning laws

You may be proud of your tiny home, but you still have to contend with the zoning laws in your area. The small structure may violate some of the zoning codes and you may end up spending more in order to comply with the requirements. You can transfer to the rural area to hopefully avoid the strict zoning laws but then again, you will be farther from a lot of conveniences and the transportation costs may add up.

  1. Insurance can be a problem

Insurance companies are wary about taking on a tiny house project. You may need to get a lot of certifications before you can secure homeowner’s insurance for your tiny home. The National Organization for Alternative Housing may have to inspect your house if it’s constructed on a foundation, or you may need to get another certification for an RV if you have a mobile home. Nevertheless, the insurance may be higher than the average home.

  1. You pay for the tiny home out of pocket

Most lenders will not give you a mortgage loan for your tiny home so that means that either you need to use your own savings or you can try to borrow from friends and family.

  1. The tiny house depreciates quickly 

Good luck trying to sell your house. The fact is that most tiny homes are fully customized to suit the taste of the original buyer. You may really take a hit on your original investment if you decide to resell your house if you get tired of the lifestyle.

As you can see, there are many nuances that may severely impact your decision to join the tiny home movement. You may want to think this through and be careful not to be swayed by the seemingly charming lifestyle that the TV programs are trying to show.


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