Housing

Determining the Real Value of Tiny Houses

HGTV has been hitting it out of the park in recent years and has added many new shows to their lineup.  “Tiny House Hunters”, is just as the title suggests a show where people select between 3 different tiny homes / trailers to buy.  I really do enjoy watching the original “House Hunters,” but my main criticism is that they do not focus on the location of the property other than occasionally saying it is on a busy street.  Everyone has heard the phrase location, location, location and they completely miss sharing that aspect.  This oversight is even more glaring with Tiny Homes.

Tiny House or Trailer

Tiny Homes are essentially trailers.  There are different jurisdictions by state / county, but in general they are treated as some form of a mobile home.  Most mobile home parks only accept manufactured type trailers without wheels.

At the moment there are not that many places you can legally live in one of these.  Yet there have been movements in some cities to expand these possibilities.

Parking on friends or family’s Land

For most Tiny Home buyers they will need to find a mobile home park that will accept them.  If they are fortunate enough to have family or friends with a big plot of land in a more loosely zoned county this could be a fantastic opportunity.

Buying your own Land

If friends and relatives are not an option then buying land will give the owner some good benefits.  The value in real estate appreciation is in the land.  People miss this when they go home shopping.  The structure is a liability and money will have to be set aside for maintenance for the duration of ownership.  The land for the most part is indestructible.  By owning the land that you place your tiny home on, you are effectively putting most of your money into the one part of real estate that makes money.  This is great, but it is very hard to find anywhere other than very rural small towns that will allow you to live in something on wheels without another primary structure in place.  Further, even if you can find the place, there will still be large costs to hook up utilities to the Tine Home / Trailer.  For the amount being spent to get on the grid it might make more sense to build a small stick built house, or a small manufactured home.  This may have a wider reach of buyers if you later decide to sell.

A Tiny Home is not a camping Trailer

I know many people want to buy the Tiny House for portability so they can use it for traveling.  The problem with this approach is that they are not built to be towed around on a whim, like a normal camping trailer.  Most need special transport to move from location to location.

Conclusion

I really like the idea of investigating alternative affordable housing options.  I like that Tiny Homes add to the positive feeling of ownership, but I am concerned that for most people it will be hard to find a place to park them that is financially beneficial to them.  If you are able to find land that allows for their primary use, this can be a great way to own a solid asset, while spending minimally on the structure.  Then you could always construct a stick built house later if you outgrow the Tiny Home as well.

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