We have heard so much about the “tiny house movement”, it is an ever evolving subject. Many people choose to move into a tiny house because they feel that they will save money, if not right away, definitely in the long run. Is it cheaper to move to a tiny house and if so, what are the forgotten costs of making this decision?
Buying or Renting?
Does it make more sense to buy or rent a tiny house? It depends on your financial situation. Many older people find it to be a great investment and a worthwhile move, even those still raising one or two children, because they ususally have the savings or a property they already own to use as collateral or sell, in order to make the move easier and cheaper. It can cost anywhere from $10,000 to $40,000 to build a tiny house from the ground up. Many buyers put down a very significant down payment or pay for the entire home at once. Many Millenials (the latest generation) find it simpler and cheaper to rent a tiny home because they haven’t yet built up enough savings or collateral to purchase one.
Renting or Buying Land?
Most Millenials rent land even if they buy or build their homes themselves. It is simply much cheaper to pay a price each month for your land than to buy it outright. Most land is too expensive for that, costing in the tens of thousands of dollars to purchase. Particularly when you rent a tiny home, it is often inside of a community and you pay a fee for the land that is yours. These types of tiny home situations often have a main house for cooking, showers, and the use of computers.
Live in a tiny home or rent it out?
For those who want to own a tiny home as an investment, you have a couple of choices. You can live there for a while to have the tiny house experience or you can rent it out right away. If you are the owner of a tiny house with land that you also own, it can be a good investment. By renting it out you give yourself a monthly paycheck that will be able to pay off the purchasing and/or building of the home or to use as you please if those bills do not exist. Purchasing a tiny home to rent out can be a lucrative project if you’ve already got a home of your own.