Are Tiny Houses Good Investments?
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There are varying opinions on this topic. The loudest voices often coming from those who have never lived in a tiny house who shout from the rooftops, “What a waste!”
Now, while each person is certainly welcome to their own opinion, I do find it odd that these individuals have:
A. Never owned a tiny house.
B. Use traditional housing numbers to show how a non-traditional dwelling is not a good investment without really looking at the big picture.
Tiny houses are different from traditionally built houses. This does not mean they are not valuable, will not retain their value (when maintained properly), or provide financial freedom that allows you to shovel back savings. But why should you believe me?
Myth 1: Tiny Homes don’t retain their value:
Myth 2: The price per square footage is really high!
My gut response to this is, “No shit, Sherlock” (pardon my French).
This is one of the most common arguments used when trying to convince people that they should not go tiny. This, again, is using traditional house math for a non-traditional dwelling. Are they wrong? Nope. The price per square foot is high upon initial assessment.
What they do not consider is the taxes and interest accrued with that 1500 square foot house you’re purchasing over a 30- year period. Let’s break it down:
Ruh Roh. The price per square foot isn’t looking too hot when you factor in everything that truly goes into a mortgage. Not to mention how you are getting way more bang for your buck in the efficiency of each square foot of a tiny house. And, to top it off, even if you had to take out a 5-year loan for that $75K tiny house, you’re still going to come out on top with your savings… let’s look at that next!
Myth 3: A Traditional House will get me a higher Return on Investment when I sell!
If you’re looking at outright numbers alone at time of sale, you’re probably right. However, when you look at amount freed up (your opportunity cost), you’re missing out on a lot of mullah!
Mullah that could have gone to other investments over the years! So, what’s the opportunity cost of savings for the traditional homeowner? Let me paint the picture:
Okay, now we’re getting somewhere! If you look at the table above the numbers start to tell a bit more of the story around the true nature of a tiny house investment.
And this is only the monetary savings! Don’t’ get me started on the work-life balance tiny has gifted me with! More time spent with those I love = PRICELESS.
Look beyond the initial (Traditional) numbers my friends. People are eager to spout off the surface numbers, but when you dig into the overall numbers spread across years, you’ll see, tiny houses are good for the soul AND can be good investments.
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