With the costs of properties rising, downsizing has become a popular trend of late, with many homeowners opting to live in tiny homes, while others look to capitalize on the demand for these tiny structures. Our very own Marcus Stoltzfus explained how tiny homes can mean financial freedom, especially with the hot Airbnb market for tiny homes and owners able to recoup their investment with a 15-30% return in one year. Additionally, choosing to live in a tiny home means you can be mortgage-free and avoid the exorbitant costs of owning a regular home. So, let’s have a look at some tips on creating and maintaining a tiny home. Financing the Creation of a Tiny Home Now that you’ve decided to downsize and have chosen a tiny home, what are the costs involved? The Spruce notes the median cost of a tiny home is around $60,000 for a 200 sq. ft. cottage, with basic conveniences like ¾ bathroom, small kitchen, and dining/living area. However, if your idea of a tiny home is a dwelling with all the luxuries and amenities like granite countertops, high-end appliances, and hardwood flooring, expect to pay upwards of $150,000 for 400 sq. ft. While this may not require a mortgage, savvy homeowners know that a sound financing strategy is required. In this sense, a better idea than breaking your piggy bank is to invest in a certificate of deposits (CD). These are fixed investments for a predetermined period (typically 6 months to 5 years) which pay interest for the term. Buying a few CDs, in what’s called a CD ladder, can be a good strategy when buying your tiny home. An extensive guide by Marcus on CD ladders notes how a long-term strategy is best for earning money over an extended period. This involves purchasing CDs of varying term lengths, with the advantage being that you can leverage the higher interest rates offered by the long-term CDs, while also having access to pull out 25% of your funds from the ladder every year without a penalty.
Build Smart When it comes to tiny homes building efficiently and incorporating the latest technologies to make your tiny home practical and functional is the best option: - Use walls effectively by incorporating built-in storage to maximize space or add shelving to walls than don’t serve a practical purpose. - Every space in your tiny home should serve more than one purpose, like a couch area for relaxing during the day which turns into a bed at night, or a kitchen table that folds into the wall with flip out seats. - Build tall and utilize the space under the stairs if you have a second level by installing sliding storage. - Digital Trends also recommends kitting out your tiny home with the latest technology like smart door locks, smart tinting windows, solar panels and even Alexa connected fixtures and appliances to make it comfortable and accessible. Off-The-Grid Maintenance Living in a tiny home generally means living off-the-grid and maintenance can be a bit of a challenge. While the benefits of living in a smaller space mean having fewer things to maintain, it also means you must maintain what you have because you might not have a backup. In this sense, come up with a weekly plan to inspect and make the necessary repairs to vital things like solar panels, septic toilets, and heating systems. Speaking of the latter, the traditional affordable choice for off-the-grid tiny homes is a fireplace, with the favorites being electric and wood burning. While electric is cleaner and safer, it does use up your energy reserves. If you have plenty of wood to use, a wood-burning fireplace is ideal, however, make sure you keep the firebox cleaned, and the chimney clear of creosote and debris. Monthly Costs Living in and maintaining a tiny home will cost much less than a typical home and you could save up to $2,000 every month. More homeowners are transitioning to tiny homes all throughout the country and finding that while there is an adjustment period for living in a smaller space, the savings are definitely worth it compared to living in a traditional home. Mickie Boehm who’s 250 sq. ft. tiny home originally cost $68,000 spends about $1,000 per month on expenses of which $450 goes to lot rental, $50 for utilities, $100 for insurance, and $400 for groceries. Other owners’ total maintenance costs are even less, coming in around $645 monthly.
Written exclusively for Liberationtinyhomes.com
by Melissa Mayer