September 10, 2020
Many homeowners are adopting minimalist lifestyles, downsizing from their spacious abodes to tiny homes. Tiny homes are defined as any living space, stationary or mobile, between 60-700 square feet, according to Tiny Home Lives. As an increasing number of people invest in tiny homes, Techanvio predicts the market to grow at a CAGR of 7% from 2020-2024. With this, the tiny home market shows no signs of slowing down as innovations and cost-effective designs make minimalism attainable for people from all walks of life.
Tiny homes are a great sustainable alternative to traditional houses, as they save energy, use fewer materials, and produce less waste. According to Go Downsize, tiny homes use 7% of energy compared to traditional homes. With this, many tiny homes are becoming self-sustaining, utilizing solar panels to eliminate fossil fuel dependency. In addition to needing fewer materials to construct, many tiny homes are built with recycled and sustainable components helping further reduce one’s carbon footprint. Having limited space for possessions also helps homeowners produce less waste, as they do not have as many items to throw away. With these factors combined, tiny homes can decrease a household’s ecological footprint by 45%, as reported by iPropertyManagement.
Whether you build it yourself or purchase a pre-built structure, tiny homes are far less expensive than traditional real estate. At a glance, tiny homes have a higher cost per square foot than traditional homes. Despite this, tiny homes use fewer materials and help owners save on utility costs. According to iPropertyManagement, tiny homes cost less than one-fifth of what a traditional home would cost. Depending on the size and materials, tiny home structures can range from less than $10,000 to more than $170,000. In addition to low building and purchasing costs, tiny homes provide owners with numerous financial benefits. Operation Tiny Home reports that 68% of tiny homeowners do not have a mortgage, making these houses a great option for those striving for financial independence. For those that decide to finance their tiny home, mortgages are much shorter compared to a traditional home, helping owners pay off their home in under 10 years.
3. Take it With You
Tiny homes are extremely popular amongst frequent travelers, as they can be transported to numerous destinations across the country. From private lots to RV parks, tiny houses help travelers bring the comforts of home with them wherever they go. Though RVs are better for those who wish to travel often, tiny homes are the perfect option for those who are looking to move seasonally.
Getting insurance for a tiny home can be extremely difficult. Insurance agencies may cover mobile tiny homes under a personal property policy, requiring the owner to live in the home part-time. For full-time owners, insurance policies for alternative living structures may be the best option. Most of these policies do not cover towing, making mobile tiny homes a liability during transportation. RV insurance also covers tiny homes but may deny claims if the home does not fit specific requirements or have an RVIA seal.
The location has a huge impact on the overall cost of owning a tiny home. Whether the structure is stationary or mobile, finding a place to build or park can be costly. From inspection, building, and zoning laws, many factors may drive up the price of owning a tiny home. Though rural areas tend to have more flexible laws, connecting to a utility grid can cost thousands of dollars.