As the cost of housing increases, alternatives like Tiny Houses are cropping up. But there can be hidden costs to a Tiny House that makes this alternate a questionable move:
- A tiny house is hard to finance. Is it a trailer? A house? Lenders are perplexed and not sure how to treat these things. Plus a tiny house may not hold its value like a conventional home would. See number seven below.
- It’s hard to find a location. There are zoning laws that prohibit you from just plunking one of these things down anywhere. Alternatively, if you register the tiny house as an RV, you have to move it every 30 days.
- They’re expensive. Conventional housing is about $100 per square foot. Tiny houses come in at around three times that.
- Appliances cost more. Because they’re so small, there is more customization and low volume mass production, which all adds up to paying more for less.
- You may need a new car. A tiny house is one thing, but you might need to upgrade your econobox automobile to a gas guzzling truck to move this thing around.
- Insurance can be hard. Just like the lenders, no one knows what to do with these things.
- Resale can be hard. Conventional homes appreciate. Mobile homes decline in value and your tiny house is more likely to mimic the mobile home example. It’s also another reason why these are harder to finance.