How To Buy A Tiny House – The Complete Guide 2021

How to buy a tiny house will be the emphasis of this article. Did you just finish watching an episode of Tiny House Nation’s TV show, and you’re considering massively downsizing your lifestyle and moving into a tiny home? Well, you’re in luck today as we will cover everything there is to know about buying a prefab tiny house.

Whether you’re hyped about saving money, living an alternative lifestyle, or just love the simplicity that tiny homes offer, we will show you all of the perks that come with tiny home living. And good enough, we have laid out all of the major financial considerations that come with choosing a tiny home- one just perfect enough to suit your lifestyle.

Location is a big deal

Before we get into the nitty-gritty of how anyone can buy a tiny home, we want to take a moment to run you through some of the most important things to consider when preparing to buy a tiny home. The first one on our list is location.

For starters or would-be tiny homeowners, you’ll need to own a piece of land where you can build or park your tiny home. Like many tiny house processes, having land to park your home is pretty important. So before you decide whether you’re going to buy a tiny home or build one yourself, make sure you have access to land you either own, rent, or one that a family member or friend is letting you use for the time being.

When shopping for land to build or park your tiny home, keep in mind that most locations within the U.S. have zoning rules regarding how land should be used and what type of structure is allowed to sit on those lands.

If you’re lucky enough to find usable land, you may need to finance its purchase. If you decide to opt for this option, we want you to keep in mind that land mortgages typically require that buyers make a 20% minimum down payment on what would be most likely a 20-year loan.

Another thing you should never forget when buying land for your tiny home project is that land prices vary widely from state to state. There are also some disparities in the size of a lot or acreage. You may also need to figure out if your preferred land includes utility, hookups, or water tights. Let’s assume the land isn’t a problem, your next step is finding a tiny home to buy, and we will run you through all of the details shortly.

Buying a micro-home: What you should know

The upfront cost for your tiny home typically depends on many factors, including size, amenities, finishes, and whether or not you’d like to build one yourself, buy a pre-owned home, or have a professional build your dream home. At the end of the day, you may end up spending a few thousand dollars to more than $75,000 for your dream tiny home.

If you decide to get a professional to build your tiny home, you’ll not be disappointed to give the guys at Tumbleweed Tiny House Company a try. Since the Colorado Springs company was founded in 1999 by Jay Shafer, they have built hundreds of homes for tiny home enthusiasts looking to live out their dreams.

We like that the company offers customers variety when it comes to tiny home designs. With tiny house models like the Farallon, the Elm, the Roanoke, and the Cypress, we are sure you’ll be spoilt for choice when it comes to choosing your tiny home designs. And if you aren’t impressed with their models, you can simply have one custom designed to include everything you’d like to have in a tiny home.

The Tumbleweed Tiny House models measure between 164 to 225 square feet. Not just that, their tiny home models are designed to sit on trailer beds and function almost like an RV. Let us quickly add that each of their base models features a variety of floor plans and sizes. In terms of pricing, these homes range from $169,000 for the 164 square foot Cypress model to $57,000 for the 171-square foot Roanoke model. The Elm model measures 204 square feet and goes for $78,000. Their last model, the Farallon measures 225 square foot and cost $77,000.

While there are tons of options included in the base price, always remember that some of these options will drive the cost up significantly. These options include front steps, screed doors, board, batten siding and more. Other options like a polyurethane sealed interior, dormers, propane electric light energy, and a skylight can significantly drive up the price.

If you live in places like Colorado, you may end up spending another $1,160 for delivery. And for folks who live on the East Coast, delivery could cost as much as $4,560. Regardless of the tiny home model you opt for, keep in mind that the trailer to put your home comes at an extra cost, with some going for $4,000 to $6,000, as per trailer length. And if you decide to go the DIY route, you’ll find some of Tumbleweed’s tiny home plans worth checking out.

Another big name in the tiny home industry is Tiny Home Builders. This tiny home building company has its headquarters in DeLand, Fla, and was founded by Dan Louche, who designed and built his first tiny home in 2009. Like Tumbleweed, Tiny Home Builders offer customers a variety of options. Plus, they also sell great plans, which is excellent for people who want to go the DIY route.

If you’re interested in something you can do yourself, something close to a finished product, you’ll not be disappointed to give their tiny home shell a try. These models include the trailer, sheathing, framing, metal roofing, along with Rain and Ice shield wrap. And for some extra bucks, you can get windows, electrical and plumbing rough-in, sliding, and trimming included in your preferred shell. Nevertheless, you have to spend some additional money finishing up the interior.

Another cool thing about Tiny Home Builders is that they will ultimately build your home right down to finishing and appliances. And by appliances, we mean installing an induction cooktop, air conditioning, heating, tankless water heater, and microwave.

If you’re interested in the basic shell, then you should prepare to spend about $15,700 for a standard, 12-foot model. For a completed tiny home, you should end up spending close to $68,000, especially if you opt for a completed 28-foot tiny home with dormers. And don’t forget, there are tons of sizes and price options in between, so you may well end up with something within your budget.

How to buy a tiny home: Build it yourself or opt for a pre-owned home

If you want to drastically drive down your up-front cost, you can decide to go the DIY route by buying a tiny house plan and doing all the job yourself. But while this sounds like a pretty good idea, don’t just go at it because you want to. Only opt for this option if you’re confident about your building and construction skills. And just so you know, skills alone don’t cut it as you’ll need to dedicate hundreds of hours of spare time to complete your tiny home project.

If you’re interested in tiny home plans from Tumbleweed, especially for any of their famous models, you will end up spending between $759 and more. The company also sells a how-to DVD for $60. And good enough, they allow you to stream 3D videos on their website for free.

The most significant cost of DIY, besides your precious time, are tools and materials. According to professionals in this industry, you should expect to spend a minimum of $10,000 on building a tiny home, and that’s if you decide to use recycled materials. And just in case you don’t have all the time to kick off your project, you can opt for Tumbleweed’s Amish Barn Raiser. With this option, Tumbleweed weed will build the structure for $15,000 to $20,000 while allowing you to finish up the project at additional cost.

Another option you can explore is buying a pre-owned tiny home. If this is something you want to give a try, you can check out some great listings on tinyhouselistings.com. The guys here have some fantastic tiny homes you may want to check out. As at the time of putting together this guide, the website featured hundreds of listings nationwide.

And we even found some tiny homes that were priced below $30,000. While opting for a preowned tiny home isn’t such a bad option, keep in mind that you may end up making some repairs if you decide to go in this direction.

Buying or leasing land for your tiny home project

Whether you decide to buy a prefab tiny home or go the DIY route, keep in mind that you’ll most likely need land to park your tiny home, and this can be pretty tricky, especially with the myriad of zoning laws from state to state. Good enough, you can find suitable land to park or build your tiny home on Redfin.com. Simply uncheck all of the other boxes under Property Type, except for land, and wait for the search result to present you with all of the options you can explore.

If you plan to live in your tiny home full-time, you want to go for land that already has a septic and water system. Thankfully, most listings should have this information, so you don’t have to spend extra time trying to figure this out.

On the other hand, if you’re thinking of living off-grid and planning to take advantage of all of the extra space on your land to grow fresh vegetables with enough space to explore the wilderness, it wouldn’t be such a bad choice to buy a few acres or more. And just so we are clear, you’ll need to get permits to build your tiny home on vacant land. This is especially true if your preferred land is not classified as a residential property.

In many states and counties, you may be eligible to build your tiny home on vacant land. Also, some states allow tiny home enthusiasts to erect tiny homes as accessory dwelling units. An ADU is a secondary residence built on land that already accommodates a single-family home. That said, always remember that your options vary from one state to the next. To this end, it’s essential to do your due diligence and make all your findings before committing to any deal.

Once you’re lucky enough to buy a property, you can go ahead to build or buy a tiny house. And sure enough, there are tons of tiny home builders on the market specializing in building tiny homes with just the basics or one with move-in ready furnishings. Considering that a vast majority of micro-homes are built on trailers, it won’t be such a bad idea to go for one that sits on a truck, especially if you move frequently.

On the flip side, some tiny homes are built on foundations, so you’ll typically need land to build such homes. In terms of pricing, your tiny home project could cost you between $8,000 to $170,000, depending on the quality of materials and unique finishing.

Building a micro-home: What you should know

Let’s assume you have gone through tiny home listings and you’re not impressed with anyone and would instead want to build one yourself; you’re welcome to explore this section for some tips on building a tiny home that ticks all your boxes. Once you have made up your mind to build your home, you can either choose to do it yourself or opt for the services of professional builders who specialize in building tiny homes.

But before you kick off the process, keep in mind that building a tiny home is a multi-step process and usually entails a lot of planning. Without further ado, here are some things to know off the back of your head before you kick off your tiny home-building project:

  • The first thing on your to-do list is to get suitable land and pay for it. While doing this, do your homework to find out all relevant zoning laws on the type of structure you want to build.
  • Put together a floor plan and map out all of the features you want in your home.
  • Decide if you’d like to have sewer or septic hookups. Also, decide if you’re going to bring water in and out on your own.
  • Decide whether you want to use electricity or solar in your tiny home.
  • Buy or draft your final tiny home plan.
  • Reach out to professional tiny home builders and inquire about their pricing. This should give you some ideas on your budget.
  • Get proper permissions and speak to the appropriate authorities before kicking off your tiny home project.

If you want to use salvaged materials and take on your project yourself, you may end up spending between $8,000 to $10,000. Nevertheless, always remember that building your tiny home will take a lot of time and skills, especially if you plan to include plumbing and electricity in the building process.

Where to park your tiny home

If you made up your mind to buy a tiny home on wheels, then you’d need to put in extra effort into knowing where you can park your home. And just so you know, this depends on your location. The good news is, there are tiny home-friendly communities and states where you can either lease or purchase land to park your home. Also, if your micro-home is legally considered or registered as an RV, then you can park your home in an area allocated for RVs.

Financing your tiny home project

While doing your homework about buying a tiny house, we are sure you may be wondering what loan options are available for you. Well, read on to learn everything you need to know about tiny home financing.

Considering that tiny homes are not big enough to be regarded as single-family homes, finding traditional mortgages may be almost impossible. But not to worry, we have found some exciting financing options you can explore and see if that solves your financing problems.

RV loans

If you decide to buy a tiny home on wheels, then there is a pretty good chance you may qualify for an RV loan. And the exciting thing is that these loans tend to lower interest. That said, your house project has to be inspected to make sure it meets all the requirements for an RV before the loan will be approved. And if you are not interested in taking an RV loan, you can see if you qualify for a travel trailer loan from your credit union instead.

Personal loan

Since tiny homes are considered personal property; you won’t go wrong taking out a personal loan to buy your dream home. Notwithstanding, keep in mind that personal loans are often unsecured, especially when you compare them to all of the traditional secured mortgage options out there.

To this end, you won’t need to provide collateral before the loan is granted. The not-so-cool part is that this loan option has a higher interest rate. So before you decide if this is what’s best for you, put that into consideration.

You should also look into how to rent-to-own for tiny houses for a cheaper option to own.

Peer-to-peer lending

Since your tiny home project will mean joining a community of tiny homeowners, there is every likelihood that you’ll come across people who share similar values as you. This group of people are open to providing loans for people looking to finance their tiny home project. Let us also quickly add that there are tons of sites out there that will connect you to investors who are willing to loan you money to buy or build a home. Unfortunately, since investors determine the terms of these loans, you may end up paying a higher interest rate. Plus, you may need to have a good credit score before the loan is approved.

If you plan to still own a traditional home while visiting your tiny home now and then, you can choose to use a line of credit or a home equity loan to finance your tiny home project. The not-so-exciting part of this loan is that the interest is tax-deductible. Also, you will be putting your traditional home up as collateral. This means your property could be foreclosed on if you miss out on your loan repayments agreements.

If you’re looking for a hassle-free financing process for your tiny home, you’ll need to have a good credit score. A good credit score of at least 700 should get you an unsecured loan. On the flip side, an okay credit score of between 640 or better should get you a secured loan. To this end, the better your credit score, the lower your interest rate.

The best way to finance your tiny home project is to save up and buy your dream home with cash. Plus, it is the cheapest option we have come across. If you must use financing, keep in mind that you’ll end up paying more. More so, the interest rate these days is at an all-time high.

Living in a tiny home

Living in a tiny home comes with so much bliss and tranquillity, especially for people who have always wanted to live a minimalist lifestyle. For people who love to relish the experiences of living off-grid and close to nature, you don’t need a great deal of square footage to enjoy your life. With a small space and all of the basics in a home, you can live a happy and fulfilled life.

If you’re moving from a larger home into a small tiny home, you must do away with all of those extra belongings you don’t use often. For instance, a large dining room table that accommodates 12 people wouldn’t fit into your tiny home. And even if it does, it will take up considerable space that would have been used for other things. A good thing to do is give away some of these items to charity or organize a yard sale to cash in on those items you won’t need in your micro home. If you’re moving to a tiny home, prepare yourself to stay committed to keeping your home organized.

To make a tiny home living work for you, you’ll need a great deal of commitment to the organization. Given the limited space you have to work with, you need to make the most of it. With the minimal room in your home, leaving a few items out of place will make your tiny home look disorganized and cluttered. Trust us when we say you don’t want your home looking like a nightmare.

Buying a tiny home: All of the ongoing costs and incidentals you should know

One thing we love so much about living in a tiny home is that it lowers your cost of living and those of maintenance significantly. For starters, living in a tiny home reduces your heating and cooling bills significantly, especially compared to living in a traditional home.

Before kicking off your tiny home project, it’s essential to consider your insulation options. And that’s because a well-insulated tiny home will be super comfortable and a lot cheaper to heat and cool. And good enough, you won’t spend so much on electricity as the limited space in your home won’t let you install a lot of energy-hogging appliances.

Another thing that blows our mind about tiny home living is that it saves you the enormous property tax bill associated with traditional home ownership. However, if your micro home is located in a state where you’re required by law to pay personal property tax, you may end up paying an annual personal property tax on your micro-home, especially if you register your home as an RV or trailer. But we doubt if this will be a problem. More so, if you itemize your deductions, you should be able to deduct the personal property tax charged from your federal tax return.

Unfortunately, without the insane expense of mortgage interest, you may not have enough deduction if you tow this direction, and you may end up still paying the standard deductions, so keep that in mind while factoring in a federal tax return.

Other fines tiny homeowners may have to deal with as they take this trajectory are fines for breaking local housing and zoning laws. Also, micro homeowners may have to pay for monthly storage space rental to store their excess personal belongings.

How much do tiny homes cost?

Living in a micro-home comes with tons of benefits, little wonder why tons of people are making the switch from traditional housing to fancy tiny homes. But while living in your dream home may sound blissful and look like a brilliant decision, have you stopped for a moment to consider the cost implications of buying or building a tiny home? Well, today is your lucky day as we will be breaking down the cost of buying or building a tiny home. Now the million-dollar question is, how much does it cost to buy a tiny house? Read on as we delve into the details.

Despite a sharp difference in the national average cost of a tiny home versus a traditional home with tiny homes going for $300 per square foot while traditional homes are going for $150 per square foot, tiny homes are still cheaper to build or purchase. In terms of average cost, small homes cost between $8,000 to $150,000, depending on the type of amenities you want in your home.

If you’re looking to cut down costs or don’t want to go overboard with spending, we suggest you build a tiny home instead of buying a pre-built house, as this option is a lot cheaper. But we must warn you, don’t be overly hyped about the savings that you underestimate the gravity of the job you’re taking on since you decide to go the DIY route. Always remember that one little mistake can end up consuming extra money and time to correct.

Besides the decision to either buy or build your micro home, other salient factors that will affect the overall cost of your tiny home include the size of your house, the type of materials you’d like to use, the cost of building permits, whether you’re building on a foundation or wheels, access to utilities and other amenities. Since tiny homes are more customizable, there is a higher possibility that you can keep costs down than you would if you decide to buy or build a traditional home.

Frequently asked questions

Should I purchase or build a tiny home?

This is one question that we don’t have a correct answer for. But we will take a minute to provide you with some clarity. If you have the technical know-how and extra time to dedicate to your building project, it wouldn’t be such a bad idea to build your tiny home project yourself. Plus, it will save you some extra bucks. On the flip side, if you have the money and don’t want to get your hands dirty, you can simply purchase a tiny home that ticks all your boxes.

Do you need good credit to finance your tiny home project

For some financing options, you’ll need to have a good credit score to have access to loans for your home. Also, there are other loan options where you don’t need to have a good credit score to access loans. The only issue with these types of loans is that the interest rate can be almost unbearable.

Which is cheaper, building or purchasing a tiny home?

It is pretty cheaper to build a tiny home than actually purchasing one. While the average cost of a micro-home sits anywhere from $5000 – $10,000 to $35,000, you can cut down the price significantly if you decide to build. Just so you know, it is possible to spend $10,000 or less to build a tiny home.