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Last modified: 2022-11-24 | Approximate reading time 4 mins
Thinking of taking the plunge and buying a tiny house? There can be many reasons for this choice: the desire to live more simply, to spend less time on maintenance or to become a homeowner on a modest budget.
Although it's normal to idealize the situation and have expectations about this new way of life, what about reality?
As we pointed out in another article, building this kind of house will cost between $60,000 and $100,000. From the outset, we can easily recognize that this is much lower than the cost of a single-family home or condo, but is that really all that can be said?
In reality, unless you’ve already raised all the money necessary to make this project a reality, you may have no choice but to take out a personal loan. Indeed, banks are generally less inclined to grant a mortgage for a home costing less than a traditional house.
In fact, some tiny homes are even considered caravans, which deprives them of access to a mortgage. While relying on a personal loan doesn’t necessarily equate to a bad situation, do remember that it comes with an interest rate of around 8% to 10%. This is why it’s essential to take this cost into consideration if this is your main funding source.
Likewise, living in a home really small is often inseparable from the purchase of custom-made appliances. Although these are modest in size, they remain very expensive due to their unique dimensions.
Now, what about land? Some people may choose to move their tiny house from one place to another. Of course, those who don't possess the soul of a nomad will wish it to be located permanently on a piece of land. Therefore, it’s necessary to take into account the cost of land in order to establish a realistic budget. Would you rather opt to go out exploring? In this case, you will need to obtain a truck capable of moving your dwelling safely.
In the end, it’s true that buying a tiny house is less expensive than buying a more conventional property. However, this project also comes with several additional expenses as if you were buying a condo or any other type of housing.
It’s important to consider the work that will go into obtaining permits, installing a septic tank or the fees required to access the water system, to name a few things. Furthermore, it should be remembered that the fees charged for many of these aspects will be no less expensive than if you’d bought a larger house.
Regarding the cost per square foot, it’s also very important to remember that it will often be higher than for a traditional house. Why is this so?
Quite simply because in spite of a reduced surface, you’ll need the same elements as a normal sized home: a kitchen, a heat source, a bathroom, household appliances and so on. It goes without saying that these costs spread over a larger area will, therefore, be less considerable than for a small house.
Where you could come out on top is in the costs associated with heating and electricity. Naturally, if the house is smaller, it’ll cost less to heat and supply electricity. Also, a tiny home with generous windows will greatly benefit from the heat of the sun to warm up the structure. As these homes are modest in size, the impact will clearly be more significant.
Many people like the idea of buying this type of house in order to get closer and live in a more community-driven spirit. On the surface this sounds pleasant but living together in a small space comes with several challenges. The first of these is related to not being able to find private areas and time. For the independent among us, this can be a major drawback.
In the same vein, it can be agreed that not all live at the same pace or according to the same schedule. Thus, the activities of some could be incompatible with the need for the tranquility of others. Do you like to blast music loud while cooking? Of course, it's always possible that someone studying at the living room table will ask you to turn down the volume!
Why do so many people dream of owning property? The answer is very simple and shows a common motivation: that of wanting to invest money. When it comes to buying a tiny house, you must be careful. While the construction of this type of home is gaining popularity, the fact remains that buyers looking for a property of this kind are currently rather limited.
Thus, it can logically be deduced that the resale process is more difficult than that of a house with conventional dimensions. If it’s impossible for you to resell your tiny house at a good price, will the investment really have been worth it?
Interested in learning more about this subject? Check out these two articles:
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