The “Tiny House Movement” is a relatively new trend in real estate making big waves in North America, and focuses on small living spaces – tiny homes. You might have heard them called something different – micro, compact, mini, or little homes, but they all mean one thing: houses ranging from under 100 square feet to a roomy 500 square foot of living space. This trend focuses on living a minimalist lifestyle and the idea that a homeowner should be able to afford their house and lifestyle.
Although this micro home movement began as a peculiar idea, it’s become so much more in the market. Now that a growing number of people are sharing how they live in their tiny homes, there have been more people, especially the Millennials, adopting this type of living situation. Documentaries, blogs, and websites surrounding tiny homes, and tiny home owners, have been growing as the trend expands.
Since house prices still remain high, and since 2015 had been a “seller’s market” in the States, the demand for tiny houses will continue to grow. But is a tiny home worth purchasing, and is it a good idea to invest in a compact house?
Owning a tiny house has its allure, with a low cost of building between $10,000 to $40,000, and the general price being just $23,000. With the cost being so little, the need for a mortgage diminishes, which is why 68 percent of people who own mini homes do not need one. The greatest potential for purchasing these homes lies in the Millennial market, as over half of this demographic rent. This is because the first payment of a traditional home is extremely expensive and unaffordable, as well as the fact many millennials don’t have children or live alone. Owning a tiny house has become an excellent option.
Another factor in making tiny home ownership even more affordable is to rent land instead of purchase it. It has become yet another new opportunity for landowners to make an extra income to rent land to multiple tiny homeowners.
Getting involved in the tiny house market gives two excellent opportunities for investing.
The first opportunity is to build, sell, or rent a tiny house. This is great if you are low on financial resources, and especially excellent if you work as a contractor, or work with one, since you can build a micro house for a smaller amount and have greater earning potential. An upside to tiny homes is that they require fewer permits and take a much shorter time to build than an average house. Lastly, tiny houses are easily made portable, which means the owner can move it to wherever they desire.
The second opportunity is to rent land to people with their own tiny homes, and is an easy way to earn extra income. If you do decide to purchase land for rent, be sure to invest in land that is large and even. Then you can divide the land into equal parts, or charge different prices for specific square footage. This is a good opportunity since compact houses are very economical and the utility needs are much lower than an average home. If you are looking for specific areas to invest in, look for areas where the trend is booming – particularly warmer areas in North America such as California, Florida, and Texas.
Although the tiny house trend is not for everyone, it is a completely different idea with a niche market that has a lot of potential. This would be an excellent and easy investment opportunity in a trend that keeps on growing.
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