The tiny home revolution is in full swing! Once a fringe concept, it has since grown in popularity and is proving to be a viable alternative home solution.
You are sure to get some strong reactions for this drastic lifestyle change, depending on who you ask. I’ve outlined three of the key reasons for and against making the switch to tiny home living.
Reason For Tiny Home: Cost
This is arguably the most significant factor for anyone choosing property ownership. The median home prices have sharply increased over the past few decades. More importantly, house prices have considerably outpaced wage increases. As such, more Australians are assuming larger debt levels to realise their home ownership dream.
The cost of building and maintenance has also increased. Due to supply constraints arising from the pandemic, material costs have increased in multiples.
For starters, tiny homes cost a fraction of the cost of a regular property (they can range anywhere between 40k – 100k). This is simply because they utilise fewer materials and resources to construct. Further, given their modular and transportable nature, you wouldn’t be forking out expenses for foundation work and earthworks.
Reason Against Tiny Home: Painful Downsizing
Even if this is your ‘first home’, chances are you are in for a painful adjustment. You may be relocating from a parents home or shared living space that would be 3-4 times larger than an average tiny home.
If you have or are starting a family, the pain only becomes stronger. Families naturally require more space than individuals or couples. They also tend to collect more stuff over the years. Deciding to part with treasured childhood memories or heirlooms can be a difficult experience.
This is not to say that this is impossible. Many families have made the adjustment into smaller living arrangements. However, it’s worthwhile noting that these adjustments are not without sacrifice and tough choices.
Reason For Tiny Home: Environmentally Conscious
It’s obvious that a tiny home carries a much smaller footprint than a regular-sized property. This in turn brings with it environmental advantages.
For starters, your energy costs should reduce drastically. Your heating and electricity costs would be confined to the small square footage that you own. In contrast, you would be paying for heating/electricity for your entire regular house, despite only utilising a fraction of the space on a regular basis.
Given the small square footage, you can also gain efficiency by using solar power or other alternative renewable sources. Firstly, this would reduce the burden on the existing electrical network. Moreover, it shouldn’t decimate your bank account, given the amount of solar panels you would need would be considerably less than a regular home.
Reason Against Tiny Home: Re-sellability
While tiny homes are gaining in popularity, they currently don’t share the same market as traditional real estate. Given the population size for tiny homes is considerably smaller than normal homes, there is a greater timeframe in sourcing potential buyers.
Moreover, tiny homes don’t benefit from the same appreciation as traditional real estate. Normal home value is a combination of land and dwelling. This can appreciate considerably if you are in an attractive location or if your local market is outperforming others. Further, you can add value to your house by updating it with newer appliances and fixtures.
Upgrading your tiny home for re-sellability purposes may not have the same impact as traditional real estate. Furthermore, the cost of upgrading may not make commercial sense in the context of the overall value.
Reason For Tiny Home: Transportable
A large number of tiny homes are built on a foundation suspended on a large trailer. This means that if you’re tired of the view from your window, you can move your entire home with relative ease.
Given the year that we’ve just had, and the travel restrictions that have come with it, the ability to move your home at a moment’s notice may sound very appealing to some.
Reason Against Tiny Home: Location
Traditional homes are typically built in developed suburban areas. Unfortunately, tiny homes cannot be built in these same areas, for a few reasons. For starters, a number of Australian suburbs have council restrictions which require specific build size and type. At this point, a tiny home won’t fit this description.
Secondly, while a positive for tiny homes is its transportability, it can also be a negative. You may require permits and relevant documentation to park your property, depending on its size and where you park.
As such, the locations in which you are able to have your tiny home may be limited to either rural or specially designated areas. Now this may be completely fine, as your motivation for moving into a tiny home may be to escape suburban life. However, similar to the first reason against, this move is not without personal adjustment.
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The content outlined above was written, edited and published by the Lost Realtor. The author has over 20 years or real estate sales and investing experience in the Australian property market. He has held senior positions in Australian building companies, including being the General Manager of the residential sales division of Collier Homes. His qualifications include a Bachelor of Commerce degree and a Graduate Diploma in Building and Construction Law.