Homes today are roughly 1,000 square feet larger than they were in 1973, while the average number of people per household has decreased. This means that more people are living in increasingly larger spaces, with fewer people to inhabit them, and, in many cases, with more things they likely do not need, and might not even want. Some research also suggests that families are generally happier when they live in smaller homes, and the trend toward repopularizing them is gaining traction.
This is likely in no small part what spurred the beginning of the minimalism movement, which has been gaining traction over the past few years. Instead of living large, some people are finding their sense of peace and satisfaction through extreme downsizing. Rather than living perpetually in debt for an extra-large home, they invest instead in the bare essentials, a sort of modern and updated mobile home, one that’s intentionally small. Tiny houses are becoming a really big trend.
What is a tiny home?
A tiny home is a separately constructed living space that is distinctly smaller than the average U.S. home. How much smaller? Well, according to some estimates, the typical American home is about 2,600 square feet, and a typical tiny home is between 100 to 400 square feet. While there are no official “rules” about how small a house must be to qualify as part of the movement, a home below 400 square feet is generally considered within range.
Tiny homes may be rented, purchased, or custom-built because the build is typically so cost-effective. These homes are often on wheels as well, so that they can be set on different foundations. This makes mobility and long-term travel a lot easier. Some tiny houses are parked on land with other buildings or structures, on the property of a relative or loved one, on rented land, and on land that the owner has purchased, perhaps as a vacation property. If you do want your tiny home to be portable, you should ensure you have a vehicle that is heavier than it, with towing capacity.
Though some people opt to construct their tiny homes from scratch and without a blueprint, many companies that offer tiny house kits, which deliver all of the materials needed, pre-cut and prepared to be set up.
Why is there a “tiny house movement?”
Tiny houses are more than just a trend. The interest in them can be linked to a movement of sorts, one that coincides with the increasing trends of minimalism, essentialism, and living debt-free. Where previous generations valued many material items and used credit and loans to make larger and larger purchases, the tiny house movement is a call back to our roots, and for many, represents financial and personal freedom.
According to TheTinyLife.com, the tiny house movement is for people who have environmental, financial and personal concerns about their quality of life, and the impact their living has on the environment. Most commonly, people look into tiny house living as an effort to decrease their cost of living, and therefore, increase their time and freedom.
Tiny houses are very affordable, especially when you compare them next to the average American home. Typically, a homeowner will spend one third to one half of their income on their mortgage or rent alone. Renting means you are putting a lot of money toward a home you will never own, and typically, owning requires a mortgage, with often significant interest that can double or triple the cost over the average 30-year term.
This is one of the many reasons that so many Americans are still financially strapped, indebted, and living paycheck to paycheck. The response, of course, is to radically minimize their belongings, to prioritize time and experience over material items.
Cost breakdown of a tiny home
As with any construction, the cost of your tiny home is going to depend on how, and where, and with what, you build it. There can be pretty significant differences in the ultimate price of a tiny home, given that there are a lot of variables involved. For example, if you already have a preexisting structure that you want to convert into a tiny home or a mobile home that just needs updating, your costs will be significantly lower than if you build it from scratch. However, for the sake of research, let’s pretend that you’re going to build the home from the bottom up. According to Tiny House Giant Journey, this is a rough breakdown of exactly what you should anticipate for costs:
- Tumbleweed trailer: $4,850
- Wood stove & flue: $4,495
- Windows & skylights: $4,000
- Structural Lumber, sheathing, etc.: $3,000
- Portable solar system: $2,800
- Generator, Cables & 2 x 90W Panels: $2,200
- Insulation: $1,200.
- Water Heater: $1,125
- Compost Toilet: $900
- Refrigerator: $870
- Roofing: $800
- Plumbing: $700
- Mattress: $450
- Shower: $440
- Light Fixtures: $400
- Front Door: $385
- Propane Heat Blanket: $380
- Flooring: $330
- Propane: $310
- Wood Slab Countertops: $300
- Kitchen Sink & Faucet: $220
- Stovetop: $176
Typical home vs. tiny home costs
To price it out exactly, let’s look at the cost of the average American home over the course of a full-term mortgage, versus what it would cost to live in the average tiny home.
First, let’s price out the average American home, at a decent interest rate (5%) and mortgaged for 30 years. This would also include the annual property taxes, and average repairs a home will need with wear.
Average cost of home: $279,500
Mortgage interest: 5%
Total cost of home with interest, over 30 years: $540,150
Monthly payment: $1,500
Average annual property taxes: $2,279
Average annual repairs: $3,000
Now, let’s look at the average cost of a tiny home, considering that you mortgaged the $23,000 it cost to build. This does not account for the fact that many people can build their tiny homes for less than that, and others save up enough money so that nothing has to be financed.
Average cost of tiny home: $23,000
Mortgage interest: 5%
Total cost of home with interest, over 30 years: $44,449
Monthly payment: $123
Average annual property taxes: N/A
Average annual repairs: $300
While our comparison does not take into account the fact that if you had a loan for only $23,000, you would likely have a mortgage for a shorter-term than 30 years, the savings are considerable when you live in a tiny home.
The truth is that having a home is a huge investment. Yes, it can pay out long-term, but there are still many annual costs you should account for before you decide what’s right for you. This is where a lot of individuals tend to get themselves into financial trouble: they invest in the home that is at the maximum of what they can afford for the monthly payment, but don’t take into consideration the rest of the costs required, as well as the rest of the money they would need to remain financially comfortable.
First, there’s the obvious: you need escrow and a down payment to purchase the house, which can vary from as low as 3 percent to as much as 20 percent or higher.
Hidden expenses for typical homeownership:
- Personal style and taste. You might not think you’d fall victim to this, but once you have a home you love, you will want to fill it with things you love and renovate it so that it looks just right. Often, when you are emotionally invested in a home, you will spend a lot more on it than you would otherwise.
- Property taxes. It’s something that most people don’t factor into their initial cost analysis.
- Insurance. You need homeowner’s insurance, and in some cases, mortgage insurance, particularly if you take a lower down payment rate.
- Outdoor care. Between the lawn, trees, gardening, and flowers, outdoor care can very easily be hundreds if not thousands of dollars each year, and that’s even if you’re doing all of the manual labor yourself.
- Oil, air conditioning. If you have an oil heater, expect large bills in the winter, and if you have air conditioners, expect them in the summer. The bigger the space, the more air there is to heat and cool.
- Electric. Again, the bigger the house, the more you use.
- Cleaning. The day-to-day upkeep of a home can be very expensive and require different cleaning agents, supplies, and potentially even professionals to keep up with.
- Pest control. Though this might still apply with a tiny home, in general, bug and insect infestations can be extremely costly, especially if they impact or in any way ruin part of your home’s structure, such as a termite would.
- Emergencies. Though this is applicable no matter where you live, typical homeownership requires a lot more money in savings for expenditures that come up. While tiny home living will never eliminate the reality that life is life, and things happen, having a smaller and more manageable space makes those costs a lot easier to deal with.
Planning your tiny house construction
If you’re going to build your tiny house yourself — and not utilizing a kit that will give you all of the materials you need pre-cut and laid out with a blueprint — you should sit down and first go over everything that will need to happen in the space. Though this might look intimidating (and it is; you are building an entirely new house, after all) the reality is that many people do accomplish this, so it’s not an impossible feat.
The following is a roughly 100 point checklist from The Tiny Life for everything that will need to be done in your tiny house. This does not include personalization or styling, rather, the basis for your construction. Remember that if you do not have professional experience with laying gas lines, electric or plumbing, you will want to hire someone to ensure that your structure is safe and sound.
In addition, please research all permits needed before beginning your construction. Requirements will differ by location, and may also vary depending on whether you are making your tiny home mobile, or installing it into a foundation on a piece of property.
- Select your site or the location where your tiny house will be if it is not mobile.
- Level the space, or set up the tiny house on jack stands.
- Remove decking from the trailer.
- Weld-on anchors, anchor the tiny house to the trailer or foundation.
- Build a foundation frame.
- Anchor foundation to the trailer.
- Attach metal flashing.
- Add insulation.
- Add the vapor barrier.
- Install subfloor.
- Frame walls.
- Ensure squareness by using a good level.
- Test fit windows.
- Sheathe your tiny house walls.
- Consider big items that might not fit through the door (e.g. shower stall, mattress, fridge).
- Raise walls, square, and brace.
- Secure framing to the trailer via anchors.
- Measure & plan layout.
- Cut all pieces.
- Allow for 1/8″ expansion gap between sheets of plywood.
- Test fit the sheets.
- Apply glue to all studs.
- Tack the sheets in place with a few nails.
- Screw every 3″ on edges of panels.
- Screw every 6″ into studs covered.
- Anchor the plywood to the foundation after the walls are raised.
- Double-check the window dimensions.
- Cut out the window holes, using a Sawzall or plunge router.
- Apply house wrap (WRB), Tyvek or Typar.
- Cut the house wrap, using inverted “Y.”
- Test fit windows.
- Flash window sills at a 5-degree angle.
- Install the windows and shim.
- Tack with a few screws.
- Test window functionality.
- Secure the windows per manufacturer recommendations.
- Flash windows, starting at the bottom and working up.
- Leave the bottom edge unsealed for water drainage.
- Construct trusses per plans.
- Make sure you tie into your wall framing with Hurricane Ties.
- Ensure height stays under 13.5 feet.
- Build headers for rough openings for skylight.
- Plan layout and dimensions for roof sheathing.
- Cut boards.
- Glue truss edges.
- Use “H” clips between sheets.
- Secure with ring shank nails and screws.
- Build a frame for skylights.
- Install skylight per directions.
- Flash according to directions.
- Frame in the doorframe.
- Build the door or purchase.
- Test fit the door to the frame.
- Shim and secure the door to the frame.
- Consider a temporary plywood door during construction.
- Install the door hardware.
- Tape the house wrap seams.
- Install furring strips.
- Paint BOTH sides of siding before putting up.
- Hang the siding.
- Install fascia boards.
- Install drip edge.
- Apply ice & water shield.
- Install a reflection barrier.
- Install furring strips.
- Install roof per manufacturer’s recommendations.
- Plan drains, inlets, holes in floor, etc., for plumbing.
- Check for trailer cross beams under the trailer.
- Account for vents if needed.
- Account for “P” traps.
- Account for proper slope so water drains well.
- Plan out locations of outlets, lights, fans, sockets, etc.
- Plan locations for smoke and carbon monoxide alarms.
- Consider your power usage.
- Plan out locations needed for gas lines.
- Plan out locations needed for HVAC.
- Install insulation.
- Foam in edges.
- Install a vapor barrier to 6-millimeter thickness.
- Ensure your materials and fasteners that come in contact with foam are okay (some react).
- Install water heater, fridge, shower, heater.
- Lay flooring.
- Cover flooring with a durable protection layer.
- Hang wall panels.
- Trim around lights and edges.
- Plan out locations needed for layout and storage in the kitchen.
- Construct a rough frame for cabinets and countertops.
- Install countertop.
- Drop in the stove and connect.
- Drop in the sink and connect.
- Build and install cabinet doors.
- Build shelving.
- Plan out locations needed for layout.
- Finish the shower stall connections.
- Finish bathroom walls.
- Finish bathroom storage.
- Connect toilets, or build composting units.
- Install any additional storage.
Reselling your tiny home
Of course, as with any home buying process, you’ll want to think long-term as well as short-term. Sure, a tiny home is an exciting prospect and a potentially liberating new way of life, but what about its value down the line?
Homes generally depreciate in the short-term and appreciate in the long-term. This is largely dependent on the home’s location, too. If you buy a home in an up-and-coming neighborhood, you can potentially profit off of it in a few year’s time. Generally speaking, if you keep your home for many years or decades, you are almost always guaranteed to come out well in the black. However, as with anything, there are risks, and assessments need to be made based on your personal preferences, needs, and desires.
As far as a tiny home goes, you might not want to expect a huge payout if and when you decide to sell it. If you have a mobile tiny home, it will sell similarly to how any other mobile home would. Given that tiny homes are a bit of a trend right now, don’t count on them being worth a lot more than you invested right now. Overall, a tiny home is still just a very small home, and whether you’re a budding minimalist or not, you should consider that it is an investment for you, and perhaps not for a payout down the line.