Want To Buy Or Build A Tiny Home? Nine Factors To Consider First
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Forbes Real Estate Council
Successful executives in the real estate industry from Forbes Real Estate Council share firsthand tips & insights.
Over the last several years, the real estate market has witnessed the rise of the "tiny house" craze. These miniscule, space-efficient houses — often smaller than 400 square feet and priced at $50,000 or less — are touted as an affordable path to home ownership. The reduced resource consumption to build and live in these residences has also won over environmentally-conscious consumers and builders.
But is it really worth it to go minimal and buy a tiny house? Some news outlets are reporting the death of this trend due to buyer remorse and zoning/development challenges, while others still believe smaller properties are still worth considering.
We asked nine members of Forbes Real Estate Council to weigh in on the tiny home movement, and offer their advice for potential buyers and developers before they invest in this trend.
1. Consider Your Short-Term And Long-Term Goals Before Buying For most Americans, one-third to half of their income is dedicated to the roof over their heads. A more inexpensive alternative is to purchase a tiny home, which may fit your budget and lifestyle. However, it is important to consider the resale and investment potential of these homes which may be lower and less attractive to investors. It's a question of affordability vs. an investment perspective. - Alex Chieng, A & L Real Estate Team
2. Practice Living Tiny Before Going Tiny
Going tiny means living tiny, so practice first before making the leap. Decide how much space you want to live in, then try living in only that space. Take the "Minimalist Challenge." Get rid of one item on Day 1, two items on Day 2, and so on for a month. Make a list of your "must haves" in advance. Doing so will help you determine exactly what you need in your tiny home. - Lisa Fettner, ReferralExchange
3. If It's About Money, Research Your Area's Prices
Many people choose tiny homes or micro-apartments for the cost savings, so it's important to research the area's median asking prices to ensure you're getting the good deal you’re looking for. On the rental side, it can mean a savings of hundreds of dollars. - Anthemos Georgiades, Zumper
4. Look For A Balance Of Function And Form
Tiny homes are fantastic, as the space saved on a price-per-square footage basis provides greater access to more individuals. We followed the same guidelines we learned studying Asian housing policy by balancing the design's function and form. This balance is critical; the layout and design are essential factors for the long term success of any alternative housing developer. - André Bueno, The BM Group
5. Getting Out Is Harder Than Buying In
The resale value of a tiny home will be in a much more vulnerable position than larger homes in comparable geographic areas. From an affordability perspective, it might be an easy way to get into a particular market, but the exit might be more difficult than you think. - Ali Jamal, Stablegold Hospitality
6. You're Being Sold; Don't Buy It
The tiny home movement is nothing but an incredible sales gimmick being used by developers to attain high dollar-per-square foot prices for their product. Don't be sold. Ask for more. Developers build things that they think they can sell, so stop buying and the movement ends. It's nothing but an outcome of high land costs and high median prices of homes. - Ridaa Murad, BREAKFORM | RE
7. Lack Of Zoning Cooperation Makes Tiny Homes Difficult In Some Areas
On the Gold Coast of Hawaii, the luxury resorts are experiencing the lack of available labor force, equaled by the lack of affordable housing. Tiny homes could be the answer. It's a simple solution until you try to get zoning for the tiny houses. There needs to be a joint effort between the county's Affordable Housing Department, the Labor Department and the Resort Hotel Associations. - Eileen Lacerte, Hawaii Beach and Golf Properties
8. Consider It As A Second Home Option
I am hearing about tiny homes for a getaway or second home. I think they work perfectly for that. It is a cost-effective way to get away from it all. While many people are looking for simplification, this may be oversimplifying for day-to-day. Many buyers are concerned about storage. This is not solved in a tiny home. Tiny home communities will need to be dedicated neighborhoods for the long term. - Michelle Ames, HorsePower Realty/Realty Executives Metroplex
9. If You Can Afford It, Get Into The Market Instead Of Sitting On The Sidelines
Waiting and pricing yourself out for your forever home is never a good strategy. With the real estate market generally going up every five to 10 years, you are better off building equity in a smaller home first. It's the same as playing video games: level up every chance you get. - Chris Ryan, Luxury Lifestyles Group / RE/MAX Crest Realty Westside
