Buying a mini-house comes with a lower price and less maintenance than a traditional house, but also comes with some hurdles. From how to fund it to where to find it, here are things to consider when deciding if the little life is right for you.
What is a small house?
A small home is generally considered to be 400 square feet or less, much smaller than the median size of 2,300 square feet of a new single-family home.
There are two types of mini-houses:
Mobile homes, also called small houses on wheels. A trailer, which is the basis of a tiny house on wheels, allows it to be moved, unlike a single-family home, townhouse or condominium.
Small houses on a foundation. They can be over a lot on their own. Or they can be referred to as secondary suites, or DSUs, which are smaller, self-contained residential dwellings located on the same lot as a single-family home.
How much does a small house cost?
Small homes are growing in popularity as people search for more affordable housing.
A small house typically costs between $ 30,000 and $ 100,000, but can be more or less expensive depending on the size, features and equipment. Small houses are a cheaper alternative to detached houses single family homes, the most common type of housing in the United States. While smaller homes are also less expensive than townhouses and condominiums, there are potential costs to consider.
If you don’t have a place to set up your mini-house yet, you will need to purchase land or lease land. If you are putting your house on vacant land, you will need to factor in the cost of bringing utilities to your property. And, depending on where you live, if your mini-house is on foundation, you may need to pay property taxes.
Owners of mini-houses on wheels do not have to pay property taxes on the house. But you can’t just put your little house on wheels just anywhere. Due to zoning laws, you will have to pay for a place to park it, and depending on the location, property taxes may apply.
Where to buy a small house
You can buy mini-houses or ready-to-move-in tiny houses through a mini house builder. If you have carpentry skills, you can buy a small home kit and do a lot of the work yourself.
Whichever option you choose, says John Kernohan, president and founder of the United Tiny House Association, research is very important.
“Every municipality, every city across the United States has its own zoning codes, which regulate whether small houses can be built or inhabited,” he says.
In addition, mini-homes are subject to building codes such as a minimum ceiling height and loft dimensions.
Dan Louche, owner of Tiny Home Builders, located in Cumming, Ga., Says homeowners may be more successful in their efforts to buy a mini-home by researching communities across the country that are more supportive of life. in a mini-house. He adds that zoning and building rules may be less stringent in less populated rural areas.
How to pay for a small house
Get financing a small house can be difficult. The minimum amount for home loans can start at $ 50,000, and lenders require homes to have a permanent foundation, making small home mortgages difficult.
If you have enough cash on hand, you can pay off the house in full. According to Ryan Mitchell, founder of The Tiny Life blog, 68% of small home owners don’t have a mortgage, compared to over 29% of all U.S. homeowners.
You can also finance your home with a personal or unsecured loan from a bank, online lender, or credit union. The repayment terms for personal loans are generally shorter than a traditional mortgage. While people with excellent credit, typically scores of 720 or higher, can qualify for the lowest rates, the annual percentage rate on personal loans can range from 6% to 36%.
Here are some other financing options for mini houses:
If you work with a small home builder, they may be able to help you get a loan from a lender.
If you can certify your mini-house on wheels as an RV with the RV Industry Association, you may be eligible for an RV loan, provided that it is your permanent residence.
Technically, you can charge your mini-house to a credit card if your available balance is large enough. However, unless you have the savings to pay the bill right away and not rack up high interest charges, this strategy is not recommended.
Advantages and disadvantages of small houses
Steve Weissmann, CEO of Tumbleweed Tiny House Company, located in Colorado Springs, Colo., Says most people are drawn to small homes because of their low cost, small environmental footprint, and the desire to live a lifestyle. minimalist. But he points out that tiny life may not be the best choice for growing families.
Here are some other pros and cons of mini houses:
You may be able to save to buy your home or pay it off faster than a larger single-family home.
You don’t have to pay property taxes for mini-houses on wheels.
Small homes generally use less energy, which leads to lower utility bills.
Less square footage means there is less to clean in a small home.
Small houses on wheels can give you mobility and freedom of movement.
If you have built a small house, you can customize it however you like.
Financing a mini-house can be difficult.
You may need to buy or lease land to build the house.
Your mini-house will be subject to zoning and building regulations.
It can be difficult to get insurance for your home.
Small homes can be difficult to resell.
There is less living and storage space.
“Small houses aren’t for everyone,” Mitchell says. He lives in the 150 square foot house he has built since 2012.
“It’s a very specific and unique life. It is not your forever home. [But] it can be if you want it to be.