Why You Don't Want to Live in a Tiny House

So you want to live in a tiny house? You want to be like those folks on HGTV and live in a little box with fold-down tables, reclaimed wood, and composting toilets? Are you sure? Are you sure you want that and not just a two-bedroom bungalow or apartment or condo? Are you sure you know what goes into buying a tiny home besides, you know, the home? Unsurprisingly, it's a bit more complicated than just buying a small, custom-built cabin or trailer and turning the key. We checked around with experts and found a few obstacles and drawbacks to think twice about before going small.

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Ideally, a tiny home is supposed to save money.The median price of an existing home in the first quarter of 2022 was $428,700, according to the Motley Fool. While Rocket Homes says the average cost of a tiny house is between $30,000 and $60,000, and could be $8,000 if you build it yourself, a realistic figure is roughly $50,000. And that's leaving out a bunch of things you would get buying an average home, which we'll outline here.

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Building a tiny house costs $300 a square foot, Rocket Mortgage estimates. The cost for a standard-sized home? About $150 a square foot. There are a lot of design considerations in a tiny space that simply don't exist in a large space. You need dual-purpose stairs, fold-away tables, built-in couches that double as beds, and more custom-designed and custom-milled items that make up for a lack of space …

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To get the cheapest tiny homes, you're signing up for less than 200 square feet — for perspective, less than one-tenth the size of the average U.S. home. You'll be doing without a full-sized kitchen or bathroom, and without privacy if there's more than one person living there. You'd also be bucking an economic trend that sees more people upsizing than downsizing. Of course, no space means you'll be doing without storage …

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So what? Pare down, be free, right? If you have a family and can't exactly downsize — or don't know you'll be living a tiny existence permanently — you'll pay anywhere from $120 to $175 a month to store items that would've been covered in the price of a larger home. That's yet another added expense before even the cost of land … 

If you're going to buy land, even a tiny lot can cost upward of $200,000 in some places, which is already pushing you toward the cost of a full-sized home. If you want to treat your tiny home like an RV, even that will end up costing $500 to $900 a month to stay somewhere full-time, or over $2,000 a month to move around. But even when settling down, you'll have to keep an eye on local laws …

As enthusiasts note, tiny houses aren't always legal. Most communities have definite ideas about what constitutes a "tiny house" and won't let you live in an RV full-time. Though some communities are updating zoning regulations, it's still fairly rare for a town or city to just let you plunk a tiny house down on a lot that once held a full-sized house. Even if you find a spot, you'll also have to figure out utilities …

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Getting electricity, heat, steady running water, and sewage means hooking into city or RV camp supplies, which will cost roughly the same as what bigger houses pay. To go off the grid, you'll have to weigh the costs and benefits of water tanks, propane heaters, solar panels, composting toilets, and other supplies. Those utilities will also affect how you shop for appliances … 

Unfortunately, appliances aren't priced according to size. While increased appliance costs are typically considered a big-home problem, off-grid and smaller-sized appliances are a rarer necessity, making them often just as costly as their larger counterparts, if not more so. All of it just adds weight for when you're finally ready for moving … 

A tiny house still must go somewhere. Depending on distance and what's being towed, the cost of moving can run from the low hundreds to more than $10,000. To move a home themselves, homeowners have to buy trailers for $4,000 to $7,000 to be towed by heavy-duty pickups with low gas mileage (even lower when pulling a whole house behind you). But even before you get on the trailer, you'll need to figure out other logistics …

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To tow a tiny home legally, it can't be bigger than 13 feet by 6 inches in height and 8 feet by 6 inches in width, according to U.S. regulations. Even if you can find a service or truck that can tow 15,000 pounds or more, you'll want to hook up trailer brakes to a truck with a transmission that can handle the tow, and do some practice towing. A truck upgrade can get costly, but you won't have to worry about a commercial trucker's license as much as you'll have to worry about time …

Even building a tiny home yourself, it could take years to break even. One tiny-house builder notes that, when his project was finished, he was actually paying more than the $1,100 rent on a 1,600-square-foot home. The cost of materials, of paying the debt on it, of the land, and rent in the meantime can add up. And that's before tacking on the cost of insurance … 

Hey, did you know that not all tiny homes are insurable? If the home is still on wheels, it may not conform to code. Insurers may demand you build a foundation at additional cost and live on it full-time. You could get RV insurance, but construction by anyone except an RV builder is questionable, and insurance might not cover all forms of damage or things such as theft. You have some options, and some insurance agents are far more forgiving, but it's yet another thing to worry about when already dealing with a mortgage … 

You can do yourself a lot of favors by financing a house through an RV-certified tiny-house builder such as Tumbleweed or Escape, but you'll need a 15% to 20% down payment. Personal loans are an option, but unless the home's being planted in someone's yard as secondary housing, it's adding another monthly cost onto land cost, RV park rental, utilities, and shopping … 

Remember, a tiny home means no storage and forces most people to get rid of stuff. A lack of storage means no buying in bulk or associated discounts — you'll pay more per ounce and item, can't do prep and will cook more as a result, and will be generating way more garbage …

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It's one of the more nightmarish elements of tiny house living: Where do you put the trash? Even those trying to live a zero-waste existence use an unwieldy amount of disposables to make a tiny house work. You can compost and try to reduce packaging, but even the most nature-loving tiny house resident has to make a landfill or recycling run every so often. But none of that explains how you're supposed to get mail …

Yep, you have to either get a post office box — which doesn't allow you to get certain packages and documents (tax forms and car registrations, for example, and stuff that requires signatures) — or a private mailbox. Those mailboxes will give you a real address, but they come at a cost. Even if you pay the bare minimum, you're at the very least tacking another chore onto cleaning …

Oh, you thought you'd save time and money on cleaning and supplies? Nope. You're cleaning less space, but it now takes a lot less to make a downsized space look like a mess, tiny-home owners note. Oh, and if you aren't hooked up to sewage, you're cleaning your own filth out of your house as well. All that work requires a lot of patience …

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As other tiny-home dwellers point out, building and living in a tiny home takes a toll. You're spending more time drying clothes that don't really dry, more time sweating out summers that never really cool, and more time testing the bounds of relationships and patience with a partner or family. You'll also test the patience of neighbors …

Since tiny houses fall into a legal gray area in much of the country, relationships with neighbors matter. If they don't like you and know your home isn't permitted, the best result might be a $1,000 fine. At worst, it can tie you up in council meetings or with permit fees before eventually getting you booted out, even in seemingly tiny-home-friendly cities. If you're forced to sell, meanwhile, just consider your home's resale value.

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Even tiny home experts admit tiny homes don't appreciate in value like a standard home. Since they tend to be customized to specific tastes and requirements, it makes them tough to unload on other buyers. It's land that appreciates in value over time, not necessarily structures, and places with high land costs make it difficult to justify downsizing to a tiny home just for the sake of it. If you're viewing a tiny home as an investment in anything other than personal happiness or fulfillment, expect to take a loss.

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