With rising housing costs, it makes sense to look at alternative ways of homeownership. Thanks to the tiny house movement, more and more people are discovering that you can proudly live in a tiny house while enjoying a debt-free life.
We have covered a wide variety of topics on this site, including why tiny homes are a great investment. But in today’s article, we are going to try and answer one of our most frequently asked questions: are tiny homes good for first-time homeowners?
The reasons why you would want to buy a tiny house as your first home aren’t limited to financial independence. Read on to learn more about why a tiny home might just be your perfect introduction to homeownership.
Why Are More People Considering Tiny Homes?
Living in tiny homes used to be a niche lifestyle. Many people thought only retirees, naturalists, and adventure-seekers could live away from city comforts and enjoy an essentially debt-free life.
What was once a hidden real estate hack has turned into a global phenomenon. Tiny houses are gaining steadfast popularity not just in the U.S. but in Australia, New Zealand, and Canada.
As tiny house sales increase every year, more and more builders are entering the scene to provide for the growing market. Gone are the days when tiny houses only belonged to empty nesters and outdoorsmen. Nowadays, tiny home advocates cover a wide spectrum of homeowners: from families of four looking to spend less to entrepreneurs wanting to invest in an exciting new property.
The tiny house has become the ultimate alternative to traditional homeownership, and it’s easy to see why.
Benefits of Tiny Home Living
- There isn’t enough space, especially in urban settings. As a result, real estate prices are skyrocketing, which is inaccessible to prospective homeowners, especially to students and new families. Instead of spending hundreds and thousands of dollars on a home, the average American has the option to skip the apartment-hunting race and build or buy a tiny home that offers a good quality of life.
- There aren’t enough quality homes. Homes priced on the low end of the average aren’t such a great deal either. Only a few of these homes, if at all, are move-in ready and worth it. Instead of settling for a space that’s barely a home or renting an apartment that’s under 400 square feet, tiny houses allow people to choose better designs built with sturdier materials for the same cost and space.
- Tiny homes allow flexibility. Traditional homeownership symbolizes permanence – the opportunity to establish roots and settle in one location forever. However, this reality is no longer the American dream. More and more people are hoping to travel and work remotely. With a tiny house, they can still enjoy the benefits of homeownership without committing to one location.
Going Tiny: Why First-Time Homeowners Should Choose Tiny Houses
Everyone knows about the stress that comes with traditional homeownership. From strict loan qualifications to ridiculously long repayment terms, the list of reasons why you would want to look elsewhere seems endless.
Thankfully, tiny houses provide an alternative reality for those looking to buy their very first home. Here are the main reasons why you should consider tiny houses as a first-time homeowner:
1) Dealing With Debt Is Easier
Homeowners paying student debt, car loans, and credit card costs will have an easier time managing their expenses. Without a home mortgage siphoning most of your monthly income, paying off other existing debt becomes more manageable.
Tiny house living also encourages you to live debt-free. 65% of tiny house owners have no credit card debt. The spirit of tiny house living is founded on owning items you only need. With only so much storage space, you won’t be tempted to shop for items in excess, which can curtail your buying habits.
2) You’re Not Locked In Ridiculous Mortgage Terms
Traditional mortgage takes anywhere from 20 to 30 years to repay. According to Lending Tree, mortgage repayments eat up about 15% of a homeowner’s monthly income on average, which differs by state. For instance, California homeowners typically see 19% of their income going to mortgage payments.
But it’s not the same with tiny homes. For those who decide to build a tiny home from scratch, the maximum cost would be anywhere from $20,000 to $30,000, and less so if a huge part of your build involves the use of reclaimed materials.
Even those that take out home loans with builders enjoy more favorable terms. Financing through a builder only requires a 10 to 25% downpayment (most move-in ready tiny homes cost anywhere from $40,000 to $150,000) with mortgage contracts that are payable within 7 years on average.
This type of property is also easier to finance through personal loans. Lenders such as LightStream and Lending Club offer great payment terms including fixed interest rates, lower interest rates for applicants with good credit, and no prepayment penalties.
3) Relocation Made Easy
With the process of homeownership being so demanding, most families wait until they are 100% fixed on a location before deciding to buy their very first house. This means wasting years’ worth of income on ridiculous rental rates and renter’s insurance.
Owning a tiny home offers solutions to both of these problems. If you build a tiny house on wheels, you can live practically anywhere and travel with your home with no problems. Relocation will become easier because your house can travel with you.
Because tiny homes are much more affordable – and even more so if you build it yourself – you don’t have to spend 10-15 years renting before you buy your first home. Tiny homeowners take anywhere from 3 months to 2 years preparing their very first tiny house. In this span of time, you can save a lot on rental costs and own a property that’s actually yours.
4) No Hidden Issues
Horror stories involving botched plumbing jobs, mold, and termite infestations can make anyone think twice about buying a pre-existing structure. For novice homeowners, it’s difficult to know a problem exists until it’s too late.
Tiny homes completely eliminate this fear. All tiny homes are built from scratch, which means all materials are guaranteed new. Even if you use reclaimed material, you know exactly where this material is coming from. As a tiny house owner, you have control over what goes inside your space.
If you decide to build a tiny home yourself, you would know what went into your plumbing, electricity, and insulation, which will give you peace of mind. This makes it easier to apply fixes when necessary because you know how everything works in your small space.
5) It Can Be Permanent Or Temporary
Again, tiny homes don’t feel like an obligation to settle down in the same place forever. If you decide to trade your small space for traditional real estate in the future, you can do so without feeling like you have wasted a lot of resources.
And for those who decide to make tiny living permanent, there are always ways to mix up your home and redecorate it to keep it feeling fresh. You can add new features and reshape your home further down the line to keep it functional for your current lifestyle.
6) Your Tiny Home, Your Design
One of the best parts of homeownership is being able to dictate exactly how your home looks. Unfortunately, this freedom can come with a hefty price tag, especially if you’re making significant structural changes. At the end of the day, there’s only so much you can do to a pre-existing structure. Local zoning laws may also limit what features you build into your house.
With a tiny home, you can dictate exactly how your home looks, while adding cool features that really work for your lifestyle. If you’ve seen an episode of Tiny House Nation, you’re likely familiar with creative living features built into tiny homes including foldable decks and disappearing wall bunk beds.
Tiny house ownership and design are predicated on flexibility, functionality, and innovation. If you want the opportunity to implement interesting design features, tiny house living can allow that dream, for a fraction of the cost.
7) It’s an Asset
Moving into a tiny house doesn’t just help you save money. If you finally decide to trade up for a bigger model or move somewhere else, you can also use your tiny house as a rental property. Several short-term tiny house rentals are up on Airbnb, on top of the many people looking to rent tiny houses for longer terms.
Can You Raise a Family In a Tiny House?
Moving into a 500 square foot home might feel like a counterproductive move if you’re starting a family. After all, families need big spaces to thrive, right?
Not really. The truth is that more and more families are moving into tiny homes. Take for instance Francois and Sarah-lee and their five-person family. They live in a tiny house that measures 226 square feet, which is small, even for tiny living standards. But they make it work with designated spaces and proper coordination.
Francois and Sarah-lee’s situation isn’t so rare nowadays. More families are embracing tiny living because it’s more affordable than raising a household in a bigger space.
On the other hand, the benefits of living in a tiny home aren’t purely financial. By living in such close quarters, families inevitably spend more time together and interact more frequently.
If you’re buying or building a tiny house for you and your family, read up our guide, Tiny House Designs For Families. This article will give you a good idea of what to expect, how to pre-plan for the house, as well as designs, inventory, and the logistics of living in a tiny house with more than two people.
Living In a Tiny Home: What to Expect
Tiny living is different for everyone. Half of the fun is figuring out how to make a space under 500 square feet completely functional for your lifestyle.
For people who have lived all of their lives in big houses, moving to a smaller space for whatever reasons will surely be quite of a shock. The limited storage and living spaces can alter your quality of life, especially if you’re not used to living in such close quarters.
So before jumping on the tiny house bandwagon, ask yourself if you’re ready to commit to a tiny home and the adjustments you have to make.
What to Expect as a First Time Tiny House Homebuyer
1) Working from home can be tricky. Converting your tiny space into a productive office can be incredibly challenging, especially if you live with other people. We find that creating distinct working and living spaces and having a makeshift desk works to help you focus.
2) You will have to be a lot more self-reliant. The tiny home lifestyle is not for the faint-hearted. You would have to learn a lot of things, starting from the build down to traveling. You would have to learn how to manage your grey and black water tanks, as well as parking up your tiny house. The lifestyle is definitely an adventure in itself so be prepared to add new things to your daily routine.
3) You would have to be picky with your appliances. Moving to a tiny home involves a lot of planning, and not just for the materials you use during the build. A lot more thought goes into furniture and appliances shopping. With limited capacity, you have to think about functionality above all else. FIguring out your electrical set-up will also help you understand if you should go for electricity or propane-run appliances.
5) You would have to familiarize yourself with local zoning laws and parking rules. As popular as they are now, tiny houses still have a long way to go when it comes to zoning laws and parking rules. Zoning laws and rules are still being drafted to accommodate tiny house living, but certain rules such as 30-40 day parking in cities apply to most states. Most RVIA-certified tiny houses are allowed to enter RV parks and use their facilities. Before building or buying your own, see to it that you know where you can park your tiny house.
Should You Get a Tiny Home?
Couples and single people aren’t the only demographic buying into the tiny house dream. A lot of people see tiny houses for what they are: an opportunity for debt-free homeownership, with freedoms that traditional real estate just won’t offer.
One of the best things about tiny homes is that they are flexible. Whether you’re one person, a couple, or a family of three, there’s always a design that suits your lifestyle and your needs. And if there aren’t any existing floorplans that provide all your needs, building one from scratch isn’t so difficult either.
Source TinyHouseBloom.Com
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