[REN #768] Housing Trends: Tiny Homes Are Getting Larger

Picture of tiny house for Real Estate News for Investors Podcast Episode #768

The tiny home trend is growing, along with the size of the tiny homes. The movement started off as a money-saving, do-it-yourself, minimalist lifestyle, but has since flourished as a way to downsize into more efficient but luxurious surroundings.

Realtor.com explored the topic in a recent article called, “As Tiny Homes Spread Across the Nation, They’re Getting Bigger — and Pricier.” (1) The tiny home movement began a few decades ago, in the 1980s and 1990s. The article says, “The goal was to build ultra-compact houses for next to nothing in someone’s backyard, to reduce consumerism and debt and return to a simpler way of life.” Many of them were also do-it-yourself homes, to help keep the costs low.

Tiny Homes Sizes and Styles

The typical measurements of a tiny home used to be about 20 feet long by about 8 feet wide, although the current definition is a small home that’s less than 400 square feet. The Tiny Home Builders website says, it would cost about $15,000 to $20,000 for materials. If you built the tiny home yourself, you’d wind up with a very inexpensive home. But things have changed. Realtor.com says more and more buyers want larger homes, nicer appliances, fancier finishes, and someone else to do it all for them.

A geography professor at California State University in Chico, Mark Stemen, says he’s seeing more tiny homes with fancy finishes like stainless-steel appliances, built-in TVs, elaborate cabinetry, composting toilets, solar panels, and other high-end features. That’s pushing the price above $200,000 for some of them.

The initial tiny home movement is branching out, in many different directions based on the desires and needs of the buyers. These tiny homes aren’t just for people trying to keep a lid on costs. Some people are buying them as second homes where they can go on vacation, and then rent them out when they are not using them. Or they may put one in their backyard to house aging parents, or tenants for extra income.

Builders are also making it easier to have a tiny home if you don’t want to build it yourself. You can even order “kit homes” from Amazon and elsewhere that take a minimal amount of work to put together. Realtor.com also says, buyers can also finance some of the more expensive tiny homes. It says that buyers can get a 15-year or 23-year loan based on a purchase price of $70,000 to $90,000. It also says that anything above $75,000 is usually “a lot swankier.”

The tiny house movement is also been getting a lot of airplay with TV shows like “Tiny House Hunters.” The program has showcased the idea of living large in a small space, although some of the show participants lose track of that idea. The website has a blog about the times that these tiny house hunters forgot which show they signed up for. One woman commented about how sad it is that she can’t fit anything bigger than a queen size bed in the tiny home. Another one explained that she wanted to move to a tiny home, and then five minutes later said “I dunno, it seems too tiny…” And then there was a contestant who wanted to know why there was only one bathroom…

So it does take a certain kind of individual to adapt to the tiny home parameters, if that’s going to be your only home. Buying them as a vacation home or investment property could give you the best of both worlds. Checking them out at Colorado’s annual tiny home festival is also a good option.

Tiny Home Festival

The Colorado Tiny House Festival took place recently, in June. The Denver Post says that Colorado is at the forefront of the movement. It says, “more people build and live in tiny homes in Colorado than in almost any other state.”

Organizers say the festival attracted thousands of people from across the U.S. and other countries. More than four dozen tiny homes were on display. Some were provided by builders. Others by do-it-yourselfers in various shapes and sizes. Many tiny homes are mobile, with wheels, such as a “skoolie.” That’s a term used to describe a converted school bus.

One family brought their skoolie to the festival. It houses a family of four. They have a website that describes their nomadic lifestyle called deliberatelifeadventure.com. It says they spent $27,000 converting the bus and were thrifty, but splurged on some nice features like a full kitchen, a tiny wood stove, a composting toilet, and solar power. It’s also 40 feet long with extra storage space under the bus, so it’s not the tiniest tiny home.

Although tiny homes provide an affordable option for home ownership, the attraction goes beyond that. The Post says, many people are gravitating towards a lifestyle that places more importance on experiences than material possessions. That’s especially true for the Millennial generation. Tiny homes can also be good for people who want to reduce their environmental impact.

Realtor.com has a blog called “How to Buy a Tiny House: A Mini-Guide to Going Small.” (2) It offers a few insights on costs and how you can finance a tiny home if you want to. It also comments on whether tiny homes are a good investment, suggesting that tiny homes on a foundation will appreciate more quickly than those on wheels. 

Rich and I discovered that if we got a tiny home on wheels, that we could park it at home and use it as an office — since we kind of live in a tiny home already and would love more space. We found out that in our area, you can’t park an RV or tiny home on wheels in your front yard or driveway, and in the back yard, it must be 20 feet from the frontage road. And we can’t live in it or even technically use it. 

We also found out that you can’t park it on an empty lot. It can only be on a lot that already has a home on it. So be sure to check on your local laws before building a tiny home in your yard.

Links:

(1) Tiny Homes Getting Bigger

(2) How to Buy a Tiny House: A Mini-Guide to Going Small

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