Everything You Ever Wanted To Know About Tiny Houses

Tiny Houses: The American Dream Gone Small

For many people, the American dream is a huge mansion on a cliff with butlers and nice cars. Others don’t have dreams that lofty. In fact, some people’s dreams only involve 100 square feet. These people are the leaders of the tiny home movement, a movement designed for people who want to downsize their homes, lifestyles, and yearly budget. According to TinyHouseTalk.com, a tiny house “is anywhere between 65 to 400 square feet.” But, many people have found ways to build even smaller. Paul Elkins, an avid Burning Man goer who created a bicycle camper for the event, which is one of the tiniest homes in the world: People who live in tiny homes boast simpler lifestyles and more money in the bank every month. But like many life changes, these homes come with a price tag and many headaches.

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Buying A Tiny Home

The affordability of buying a tiny house is definitely not in question. In fact, according to TheTinyLife.com, 68 percent of tiny home owners have no mortgage. Still, tiny homes are no small investment, so you’ll need to do your research before buying. If you’re looking to move into a tiny home, you have a couple of options. You can:
  • Build it yourself
  • Hire a tiny home contractor
  • Buy a used one
Building a tiny home yourself might not be the easiest option, but it is definitely the most affordable one in terms of mortgage. For under $1,000, you can buy a complete tiny home floor plan of your choosing. After that, you just need to get the materials you want and start building. The price, not including the labor you will put into the home, could range anywhere from $10,000 to $100,000, depending on the square footage and the price of the amenities you would like. According to TheTinyLife.com, the average cost to build a tiny home is $23,000 if the owner builds it. Of course, if you’re not structurally inclined, you can always buy a new or used tiny home. But, like most products in this world, buying a new tiny home will cost you more than buying a used one. The prices for these homes are higher because you are paying for the hours of labor. However, if you hire a reliable contractor, you will know that your tiny home is built correctly. In other words, you can pay a few thousand more for peace of mind. Hiring a contractor, especially one that specializes in tiny houses, is also advantageous in the insurance market.

Insuring A Tiny Home

Insuring your tiny home is a completely different matter than buying or building it. An important consideration for insurers is who built the tiny home. While it is cheaper for you to build your tiny home yourself, it might cost you in the long run to insure it. Insurers are hesitant to cover tiny homes that are built by the owners because owners are not often certified contractors. Any home built by an uncertified contractor could be incorrectly built or not up to code. The other issue with insuring a tiny home is its mobility (or lack thereof). There are two different types of tiny homes: mobile or stagnant. Insurance for your tiny home depends on the type of home you have. Mobile tiny homes are typically insured as mobile homes or RVs. Stagnant ones can be insured as actual homes, so you will run into fewer problems with insurance companies. If you have a tiny house on wheels, it is important to get a formal certification showing that the “trailer” has been properly made. This certification is comparable to the certification numbers tagged on many RVs. This tag is proof that the RV is up to National Highway Safety Standards. Your tiny home certification should be similar to, or the same as, this certification. Another option that recently hit the tiny house market is to get tiny house insurance. Tiny house insurance can cover everything you need for your tiny home: from walls and windows to the items inside. This highly specialized insurance can be expensive, though—around $500 a year—but it could be worth it for what it covers. Because this insurance is so specialized, it is also rare. Currently, you can only insure a US tiny home through Darrell Grenz of Portland. He insures tiny houses through Lloyd’s of London in the following states:
  • Arizona
  • California
  • Colorado
  • Nevada
  • Oregon
  • Utah
  • Washington
Grenz is looking to expand his business to other states, but until that time, it is important for you to get tiny house insurance in some form. Be sure to look into all your insurance options before purchasing your tiny house. Just like any big purchase, tiny houses have their triumphs and tribulations. The best way to go about this big life decision is to properly inform yourself of what you’re getting into. That way, you’ll be ready for any problems that might come your way. While tiny houses probably aren't going to become big in the housing market for some time, they are making homes an affordable and eco-friendly option for tons of home buyers. While homes in New York and Los Angeles aren't going to go down in price anytime soon, home buyers can still find their white picket fence dream in a tiny house.  In this recovering economy, that is truly what matters the most.

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