Should You Buy A Tiny House?

You’ve come to a good place if you’ve ever considered moving into a small home, but aren’t sure where to begin.

I’ve had a long-standing interest in tiny houses, bordering on obsession, ever since I saw my first one in 2015, when I watched a Netflix documentary titled “Minimalism : A Documentary about the Important Things.” I have spent countless hours researching regulations, browsing Instagram pages, watching YouTube video, playing with design concepts, even planning for my own tiny house.

In the spring of 2017, i was thinking about building or purchasing a tiny house. The challenges I faced at the time were similar to those that tiny home enthusiasts face.

Location: Where do I put it

MONEY – How can I obtain financing?

CONFUSION – How does the regulation work? Who can build one for me?

I finally decided to travel and see the world more while I was in my late 20s.

Four years later, I’ve decided to dive deeper and more intentionally into the idea of purchasing a tiny house for myself.

This time, finding the answers was much easier! This movement has also come a long way, which is encouraging. Now, I’m excited to share some of the information I’ve gathered over my last few months researching tiny houses.

We’ll review some real-life factors that influence my decisions, and we hope some of these lessons can help you make your decisions. Let’s begin with the basics.

WHAT IS a Tiny Home?

There is no one definition of a tiny house. If you look at the first few pages of Google, “tiny home” is classified as a house that’s 400 square feet and less.

Tiny houses can come in a variety of sizes and shapes. People have been inventing ways to live in small spaces for many years, whether it’s a school-bus conversion, van makeover, retrofitted shipping containers or a traditional mini-sized structure.

Tiny House on Wheels is one version of tiny homes that has gained in popularity. This post will focus on the THOWs that are the most popular, and also the ones most relevant to my journey. It is likely that if I decide to build a small home, it will be on wheels.

The size of a THOW is restricted because the foundation is a trailer. The unit can be moved with any SUV or truck that has a towing capacity and a hitch. For more information about towing capacity and weight restrictions, please check out this article.

Standard trailers are limited to 10 feet in width. This is so that they comply with the transportation regulations, and can avoid the need for permits and special procedures when moving house. Due to framing and the insulation of the walls, however, the actual living space within the home is only 8 feet wide. The maximum length is 40 feet.

WHAT IS THE BENEFIT OF A TINY HOUSE?

#1. Affordability

Cost is a major factor for some when deciding to move into a small home. If you are handy and can build the house yourself or with some help, your project will cost less than the price of a good vehicle. For those who hire a tiny house builder with experience, the cost may range from $80-200K.

It may not be as inexpensive as you think. Have you seen these things? These are beautiful. Here is a video of one of Minimaliste Tiny Homes’s favourites.

You may pay the same price as a standard condo, depending on how you approach your purchase and what your plans are for the future. Why would you choose this option? We’ll continue to highlight some of the main reasons.

#2. #2.

Not only THOWs, but many tiny homes come with the option to be driven, towed or relocated for a reasonable price. Tiny living is attractive because it allows you to move quickly, and at minimal cost. Relocating your home can save you money, time and energy.

#3. #3.

This is an important one for me. I’m not one of those tiny-home enthusiasts who thinks this is a radical change in the way I live my life. This is a more sensible approach, both now and for the future.

It gets me off the rental market for now. For a little while, I’d like to put my monthly rent towards something that would build equity. But I’ve struggled to accumulate a complete 5% deposit, let alone a 10-20%. You may want to wait until you have saved enough to lessen or erase the impact of CMHC charges.

In the future, I intend to use the property as a rental property. Air BnB has a dozen similar units located within an hour’s drive of my house. Each unit has an average nightly rate of $120. It will be my home for many years, but I can also use it to generate revenue when I reach the point where I want to start a family or save up enough money for a more traditional house.

#4. Simplicity

It’s no secret that a home smaller than a US average house will require its residents to make some important decisions. Tiny house living makes us examine the “stuffs” we have in our lives. It forces us to examine the usefulness of everything we bring into our homes. Eliminating all items that are not essential can be liberating.

#5. #5.

We’re encouraged to spend time outdoors with less space in the home. Downsizing their home can lead to more time outdoors, whether it’s in nature, sports or just relaxing on a patio.

#6. Environmental Impact

Most people in society agree that it is important to consider what is best for our planet. Tiny house living aligns with this goal. Tiny houses can often be completely off-grid, but even those connected to the grid use a fraction of energy as traditional homes.

WHAT IS THE IMPACT OF LIVING in a Tiny Home?

#1. #1.

You’ll need to make many adjustments and take into consideration things you didn’t anticipate. Rather than listing them, watch this video of an experienced tiny home inhabitant ranting on everything she does not like about tiny homes.

#2. Location

You may not have the money to buy land to build a tiny house. You’ll probably need to pay rent for someone to put it somewhere. The acceptance of tiny houses varies from municipality to municipality, but in general, the closer you live to a large city, the greater the difficulty. You’ll have to consider looking outside your city limits, which will require more commute time.

You’ll also need to find someone who is willing to let you rent a spot on their property. You’ll need to keep the cost of renting land below $500 to make this a viable scenario. This cost is similar to a monthly condominium fee. It’s a pain to pay both, but that’s the price of living.

#3. #3.

You might not get the results you expect if you build something. You may not be able to have the same types of gatherings as you used to if you like to entertain your friends and host dinners. You may only be able host a small number of people comfortably in the smaller spaces. Your friends and family will be more inclined to visit you if they know that you’re a great host!

How do I obtain financing?

As home builders who specialize in tiny homes have become more established, they’ve developed relationships with banks. The more time a builder has spent building quality homes, the greater the likelihood that they will offer you a direct link to an agency who can provide financing.

A THOW, from a regulatory perspective, is treated as an RV. The banks treat these mobile dwellings the same way. As a tiny-home buyer, you can expect to get a loan that is more like an RV than a mortgage. Your maximum amortization period will be 20-years, which is slightly less than the 25-30 year term of a typical mortgage.

Interest rates are another significant difference. Interest rates will be very low in 2021. This allows homebuyers access to rates as low as 2% for a conventional mortgage. These rates are difficult to find for tiny house hopefuls due to the RV designation.

The terms of your loan will be determined by the credit score, income history and cash available to make a downpayment.

I am a tiny home owner who has just begun the journey. I can tell that the rate of interest I was given on a $150,000 construction of a tiny home with a minimum down payment of $5,000 was 5.5%. The go-to lender of Tea Cup Small Homes gave me this figure in August 2021. If you’re interested in learning more about this subject, Tea Cup Tiny Homes has a lot of useful information on their YouTube and Instagram pages.

In either case, the amount of information available about tiny houses is far greater than what the owners can afford. All that means is that a lot of people, like myself, are interested in tiny homes.

What do you think about tiny homes? Would you buy or move into a tiny home? Comment below!