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Tiny Homes As Investments: Can Tiny Homes Be A Good Investment

By taufiqhaque

As prices of homes and apartments keep on rising, we are forced to look for alternate options in the market. And for those who want to lead a minimalistic life, there is no better option than investing in tiny homes. These small form factor living options are popular among people and can also open up various business ideas. Tiny homes are getting popular every day as we are moving toward more minimalistic living. But how good are tiny homes as investments?

But will that be a good idea? Is it worth investing in tiny homes? Can tiny homes be a good investment? If these questions are troubling your mind, this article is for you. In this article, we have broken down the advantages and disadvantages of tiny homes so that you can evaluate the investment potential and conclude whether or not you should invest in tiny homes.

What is a Tiny Home?

Now, before diving into the details regarding the pros and cons of small house investments, let’s take a look at what tiny homes actually are. Many don’t understand the concept and end up not investing in tiny homes without seeing its potential.

 As the name suggests, tiny homes are small residential houses that generally come with a floor area around 400 sq. ft. to 500 sq. ft. Most of the time, these small houses are built on trailers so that you can move them around from one place to another. There are also tiny homes that come with permanent foundations. But primarily, tiny homes are transportable.

Tiny Homes As Investments: The Advantages of Having a Tiny Home

Tiny Homes As Investments: The Advantages of Having a Tiny Home
Tony-Anderson

Due to their small form factor and transportable nature, owning a tiny home has quite a few benefits. The advantages that you will enjoy by buying a tiny home are:

1. It Comes with An Affordable Price

The biggest benefit of buying a tiny home is the price. While you need to pay at least 250K+ USD for a small to medium home in the US, tiny homes can cost you around 40K USD to 50K USD. This is without adding the discounts that many tiny home manufacturers offer. This helps the buyers to avoid mortgages for their homes. A report shows that almost 68% of people investing in tiny homes don’t pay for mortgages.

This is quite understandable as you won’t be needing a loan if the amount is this budget-friendly. 

2. Cost of Maintenance is Very Low

You don’t have to worry much about the maintenance cost for a tiny home as you will have to pay a very low amount for cleaning and repair bills. This is because these houses are very small and don’t have much room or furniture to clean in the first place. Keep in mind that tiny homes target people who want to live a minimalistic life. And the cost of maintenance for minimalistic living has always been low. For this reason, many prefer small home investments over apartment investments as they don’t have to pay a huge amount for maintenance.

3. Transportability 

Another great advantage of tiny homes is the transportability of the houses. You are flexible with the location as you can just move your home to a different location every day if you want to. This makes investing in tiny homes a great choice for those who like to travel and want to enjoy the comfort of home at the same time.

The transportation utility cost is also low, so you will save quite a few bucks on gas and electricity and other utilities. This can bring comfort and enjoyment along with a taste of adventure to your regular boring travels.  

4. High Demand for Vacation Rentals

Small home investments can be a great option for tourist and party rentals from a business perspective. And as the prices are much lower than renting an apartment or booking a hotel room, people are starting to pick tiny homes instead of costly hotels and apartments.

And as the world has finally started to recover from the impact of Covid-19, the countries have opened their gates to tourists. Short-term tiny home rental deals are now extremely popular. And if you can plan out the business right, then these small house investments can be extremely profitable. 

This will also lead to a higher ROI or return of investment as your returns will be higher than investments.

Tiny Homes As Investments: The Disadvantages of Buying a Tiny Home 

Tony-Anderson

Purchasing a tiny home isn’t without its flaws, and you will have to encounter a few disadvantages. The issues that you will face upon buying a tiny home are:

1. Finding A Proper Parking Place

The biggest issue of owning a tiny home is finding a place to park it. You can’t just park your home in someone else’s land. And getting a permit for parking is different and highly depends on the location and the laws of the state. 

Also, you can’t permanently park a house if it is transportable. There are also some places where you will have to pay utility bills for power, electricity, water bills, etc.

2. Issues with Insurance

Another problem that many faces with tiny homes are getting insurance for their homes. Insurance companies want to provide insurance for houses with proper values. Tiny homes, especially the DIY ones don’t have a proper value attached to them. 

Also, home insurances companies debate on providing a good deal when they find that the house will be on the road from time to time. For these reasons, tiny homeowners face a difficult time getting good insurance for their homes.

So, Should You Invest in Tiny Homes?

The answer highly depends on your choice. Investing in tiny homes can be great if you plan on renting them out and want to make a profit. As the purchase and maintenance cost is significantly lowered than other living options, this will be a great investment.

But at the same time, a few handfuls of problems like insurance and placement can make these small home investments a risk. 

But, in our opinion, we believe investing in tiny homes is worth the risk, and if you have the funding, then you should definitely do it. Just make sure you find the right dealers!  

You can also read: Tiny Home Living: Can Having A Tiny Home Save The Earth

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