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3 Factors to Consider When Purchasing a Tiny Home

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Tags: Market News & Trends, Home Buying & Selling

Just like edible cookie dough and rolled ice cream in the foodie world, tiny homes have been sweeping the home improvement trend nation for quite some time. If you can manage to look past how cute most are, there is a need to look at whether tiny homes are a sound real estate investment.


tiny home investment

1. Cost (Un)Effective

When you consider buying a tiny home, there really isn’t much difference between a tiny home and a mobile/manufactured one. A tiny home as small as 200 square feet can run up to $70,000, maybe even $100,000 depending on materials, to build but do not include the cost of land which will have to be leased or bought on top of financing the home, much like a mobile home. However, unlike mobile homes, most tiny homes do not come with basic amenities like plumbing, electrical and other conveniences which may be a requirement in the area you place your home. Furthermore, most lenders have a minimum amount they will loan, making it difficult to finance a tiny home and resulting in you potentially paying all costs out of pocket.


2. Zoning Laws

Most local zoning laws don’t allow tiny homes. All around the United States, laws prevent tiny homes being built on foundations unless they are accessory dwelling units. The list of states and cities that do allow it can be counted on one hand. Even for mobile/manufactured homes there are only certain areas that they are allowed to place or build. Why? These types of home communities can drive down surrounding property values.


3. Limited Market

It may be hard to believe considering how big of a trend it is, but there is a limited market of people buying tiny homes. Most tiny homes can only fit one to two people comfortably, so only single people or couples tend to live in the space provided making it appealing only to a small demographic. The lifestyle of the homeowner has to fit to the tiny home rather than the home fitting the lifestyle of the homeowner making it less appealing to the average buyer.



The verdict? When considering tiny homes from a practical standpoint, they don’t meet typical lifestyle or family needs. It can be hard to start a family or grow with limited space. Though the tiny house movement creates great inspiration to draw from for a more minimalistic lifestyle, make sure to weigh your options before investing. 


Tyler Voigt
By: Tyler Voigt

Resident Marketing Specialist and Millennial at Wyndham Capital.