Tiny homes are one of the hottest real estate trends on the market. The number of TV shows alone — from Tiny House Hunters to Tiny House Builders to Tiny House Nation — testifies to the enthusiasm the U.S. public feels for the tiny house phenomenon. A visit to a bookstore, online or in a mall, reveals design books aplenty for tiny houses and memoirs about building one or living in one.
Why are tiny homes such a trend? Should you invest in one or build one? How should you price a rental if you have one? These are all excellent questions!
Why Is There a Trend Toward Tiny Homes?
Over the past few decades, homes in the U.S. have been getting bigger and bigger. The U.S. Census first gathered data on home size way back in 1973. The average home that year measured 1,660 square feet.
Enter the tiny house.
Tiny houses are a reaction in part to the increasing size of the American house and trends that come along with the movement toward bigness.
Tiny Homes Are Less Expensive
Home prices around the country have become increasingly expensive. Increasing home size is only part of the reason. In many urban areas around the country, like San Francisco and New York, renting or owning a home has become unaffordable for all but the very wealthy. A tiny home can be built for $19,000 to $50,000. The average purchase price of an American regular-sized house is $290,000.
As a result, tiny homes are particularly popular with groups that may have limited disposable income to spend on rent, such as college graduates with heavy student loans or retired people.
Tiny Homes Offer Multiple Environmental Benefits
All homes use energy for light, heat and water. Expending less energy on the home becomes increasingly attractive as more people understand the benefits of conserving energy, saving fossil fuels and contributing to a sustainable way of living. Heat, light and water is expended over much less space, so the costs are smaller. Tiny homes have a smaller carbon footprint.
Tiny Homes Come With Psychological Benefits
Tiny homes offer simple living, which is attractive to many people. The fewer things you buy, the fewer things you have to maintain and store in your home. Decluttering your living space eases your mind. If you aren’t surrounded with a lot of things taking up space in your home, you’re more likely to have a clear and focused mind. If your home is cluttered, your mind is often cluttered too. If you live in a tiny home, you don’t have much space for clutter.
Make These Four Considerations When Renting a Tiny Home
If you own a tiny home or plan to rent yours, consider the following:
● Price the rent to cover your expenses. Factor in expenses for mortgage, payments on the land, insurance, utilities and a prudent reserve for maintenance.
● Find out what competitors are charging for rent. You can’t use rental prices for regular properties as comparisons, because square footage is a large factor in pricing rent. You can look at sites dedicated to tiny homes to get an idea. Be sure to look at rent for the entire month because many tiny homes are advertised as vacation rentals.
● Find your rental range. Rental range factors in all the amenities that can contribute to rental prices. How much square footage do you have? Are there porches or other outside space amenities? Is there air-conditioning? Dishwasher and laundry facilities? Did you use high-end design or fixtures? The more space, the more available amenities. The better constructed and designed, the higher the rent. Is your tiny home within easy commutes to work or school? An isolated tiny home will sell to some markets, but it may stay on the market longer.
● Assess your market. Many recent college graduates and retired people like tiny homes because they’re cheaper, so you may want to advertise toward those markets. Research the impact of the environmental and psychological factors in your market. In environmentally conscious states, for example, the eco-friendly nature of tiny homes and the chance to live simply will attract renters. Use a tool like Rentometer to check out your competition as well. Then, market accordingly!
A tiny home can be an adventure both for you and your renters. It’s a chance to benefit from a trend with cost, environmental and psychological benefits. Be sure to research your markets and price according to your market range, and you’re on your way.
This article was written exclusively for Rentometer by Megan Wild. Megan is a home improvement blogger who writes about easy ways that you can fix up rentals or your home. When she’s not sanding her next project, she’s found walking her dog, Tucker.
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