Binging on all those Tiny House TV shows featuring unique designs, creative storage solutions, minimalistic living, and many who say they have financial freedom can entice you to wanting to go tiny. The two big questions that many think they’ve conquered are 1) can one live without all the “stuff”? and 2) can we live in 200–400 square feet of space? Do you feel you’re ready since you’ve answered these questions? Your vision is important, but going tiny requires a bit more. Time for a tiny house reality check.
Here are three important topics to consider that often isn’t covered in those exciting TV shows: Finances; Location; and Try It Out.
There are a lot of things to consider. One is what kind of tiny home you want. (Check out “Research for Tiny Home Options” ) Another is what is your reason for going tiny? To save money, to be eco-friendly, to live near your children as you age in place?
My reasons are to live more minimally while traveling more. While I am in the process of renovating “Wednesday the Airstream” , I have a side gig at a tiny house builder ( Tiny SMART House). This is a fantastic opportunity to learn more about something I’m passionate about, and share insights with you.
Reality Check: Finances
The basic question is “what is your budget?”
Per the Washington Post, median house prices are expected to grow to $270,400 in 2020. The cost is much higher if you live in any of the major cities (like I did when I lived outside New York City, where my average size house was sold for over a half million dollars). What do you think the average cost for a tiny house would be? There is a range, but basically you will spend between $40,000 — $80,000 (with the national average being $65k).
There are so many stories out there about how people have minimized their expenses and paid off big debts. Or how they avoided a big mortgage with high monthly payments. But you need to afford the tiny house first.
- Have you taken a good, hard look at your financial picture? Do you know your debt load/income ratio? Your credit score?
- What kind of cash will you need saved up? The down payment. Or maybe a full purchase price (we bought our vintage Airstream outright).
- Do you already own a home? What are your plans for that? Sell, rent or borrow against it? What are the tax implications?
- Do you want to build it yourself? Most of these costs you will have to bear upfront.
- Do you want to buy one already built? Make sure you have a house inspector check it out. If it’s a tiny house on wheels (aka THOW), is it RVIA certified, have a VIN and license plate?
- Do you want a custom one built for you? Are you willing to take the risk of a local contractor who may or may not have this kind of specific experience. There are tiny house builders all over the country. Are you willing to find a specific tiny house builder, and pay for transportation? (Another added cost).
Getting a loan
If you’re not paying cash, you need to research how to finance it. Tiny homes fall into a real tricky area. Most mortgage companies won’t touch homes of certain (small) sizes. One rationale is they don’t have “comps” and they are concerned about the reliability of the structures. Some lenders require the RV or house be built prior to financing (which is even more of a challenge if your custom tiny house builder needs payment up front for materials!).
- If you have a home, consider a Home Equity Line of Credit (HELOC)
- Check with your local credit unions and USAA for a secured RV loan
- There are companies that will offer non-secured loans, based on your personal credit and not tied to the house. The interest rates on these tend to be higher, and the terms shorter. They can be a good bridge loan in certain cases.
- Borrow from family (if it doesn’t strain relationships)
- Borrow from a credit card (I am not suggesting this, but people have done it)
Insurance for your tiny home will depend on several factors (such as type of house and where you’ll be living), and your insurance company. Start with your current broker, or ask others for referrals. Here’s an article that discusses in more depth: “Get Real Insurance for Your Tiny House on Wheels”
Reality Check: Where will you park it?
“Location, location, location!”
Are you sure your Aunt/that guy you know with a big backyard/the friend with 15 extra acres has the legal right to allow your tiny home? Will that RV Park allow your home (some exclude buses and campers over a certain age)? Does that cute spot in the mountains have neighbors that will complain?
Other things to consider are hookups — do you have access to the required water, electric, sewer etc.? If you’re on under-developed land, this may become a big investment.
Will you be off-grid? As they say, it takes green to go green. While the options look economic, the upfront costs can be pricey. Are you able to deal with solar (how much power will you need?), propane, rainwater collection and the alternative toilets ( composting/incinerator)?
If you plan on being nomadic, make sure your home can move. How much weight is the home? Do you drive it with an appropriate tow vehicle? Will it be considered a wide load (which needs permits, and sometimes guide vehicles)? Will you need a professional transporter? Longer trailers will need more axles. Is the shape of the house aerodynamic? The right height for potential bridges? Things that can add weight are things like insulation, granite countertops, flooring, furniture and even extra tanks.
What are the zoning codes?
There are some cities facing housing shortages and have started relaxing the regulations for tiny homes. For example, in Portland they are allowing them in backyards without fear of getting fined (basically, they won’t enforce the laws). Some states (like where I live, here in Oregon) are friendlier, while other states (like Connecticut, which I’ve read has zero tolerance) still have far to go.
Be the change
Many areas have yet to get on board with the idea of smaller living. The lack of information has led many places to consider tiny houses illegal. This isn’t because they are unsafe to live in but because the state doesn’t know how to regulate them properly (and they probably want their share of your tax dollars). I often suggest the first place to search for information is the Tiny House Association of America Or Tiny Home Industry Association. If your city/county/state isn’t currently open to the benefits of tiny living, they have people and resources to help you change that! I’ve also come across this book “Cracking the Code” that has received great reviews for working the system.
Reality Check: Try Before You Buy
It’s about the Experience.
Until you are living in a tiny home, it’s hard to know all the ups and downs. A tip is to write down your expectations. This could be part vision board, part journaling. It’s also a good way to see where you are in your journey, in “black and white.”
Can you feel it?
I like to suggest to people to get a “feel” for the space. My biggest memory is from one of those TV shows where the host tapes off the square footage of storage space and tells people to downsize to those necessities that fit. If you have access to a tiny house builder’s models, or one of those tiny house expos — go visit! Something that’s 8.5' wide X 20' long feels much different than one that’s 12' wide X 36' long!
Pay attention to how a loft feels. Can you imagine yourself waking up in a short space every morning? Or do you want all one level? What about food — do you want lots of counter space and a full-size fridge? I’ve notice I can gauge my fridge space needs by what I use now. Do you want entertainment space? Plan for the future, if you can. One older couple is looking for a bigger tiny house when they realized two things — their dog couldn’t get up the stairs and their grandchildren were taking up more and more space. Please don’t forget to include your pets (and things like kitty litter boxes!)
I love this idea — rent a tiny house! As they grow in popularity, more and more places are offering them as places to rent.
Tiny House Leadville (We found this community when traveling across the country. It’s in a beautiful little town in the mountains)
Tiny Tranquility (RV Park, Oregon coast. I’ve met a very happy resident!)
United Tiny House Rentals (I saw some of their rentals while at a Tiny House Festival in Marshfield, MA. They’re based out of GA)
The Vintages (RV Park, Oregon wine country. I visited this place recently. Fun!)
Tiny House Hotels (listings)
Tiny House Rentals (listings)
Rent an Airstream (I probably should have done this, but no regrets!)
Rent a Skoolie (if converting a bus is your dream)
Vintage Trailer Campgrounds (If you like The Vintages, but that’s too far — maybe this will help you find one nearby)
Airbnb Tiny House Rentals (I used to be an Airbnb host. I love all their different options — even tree houses!)