In part one of this series, we talked about how you would need to adjust your lifestyle if you decided to live in a tiny home. In part two, we mentioned some of the logistical challenges that come with tiny home living. In part three, we’ll take a look at the main reasons why tiny homes continue to appeal, challenges and all.
With the Bank of Canada recently raising its overnight interest rates (and possibly raising them again in December), the mortgage stress test having been implemented earlier this year and rents getting more expensive, it’s no wonder that housing affordability is a major issue in Canadians’ minds right now.
Of course, we all need a place to live, and many of the people who can’t afford a home have to find a place to rent. For a growing number of people, tiny homeownership seems like an affordable alternative to owning or renting a home or condo. And yet, there’s a different group of people to whom a tiny home offers more than simply a cheaper, trendier place to live.
The tiny home movement is not a new phenomenon. They’ve been around in one form or another for decades, but they really came into the public consciousness after the 2008 housing crisis. Countless blogs, TV shows, and environmental activists have loudly praised the virtues of “tiny home living”.
Not Being Shackled to a Mortgage
In theory, tiny homes are a significantly more affordable alternative to regular homes or condos. In fact, purchasing a tiny home could cost you less than the down payment for a home. A pre-fab tiny home can cost anywhere between $25,000 USD (for a cheap tiny home) and $150,000 USD (for a luxury, tiny dream house on wheels). Or, if you decide to DIY the home, you could bring down the price by around a third, on average.
In practice, however, a price tag doesn’t tell you the whole story.
Did you know that the word mortgage originates from the Old French “mort gage” which literally means “death pledge”? It was so called because the deal would die if the debt was completely paid off, or if payments stopped. However, for some people, a mortgage really does feel like a pledge to the grim reaper and they find the idea of borrowing hundreds of thousands of dollars from the bank and paying it back over a 20- or 30-year period terrifying.
We can make a logical and financially accurate case that a mortgage is good debt to have. We can also confidently state that real estate has always been one of the best investment options out there. But let’s not forget that home buyers’ decisions are rarely the product of cold logic. Choosing to live in a tiny home is not just about saving money.
Not being tied to a mortgage gives individuals a sense of freedom. Sure, their home is small, and sure, it has some very obvious downsides. But in their minds, it’s a better alternative to the stress a monthly mortgage would bring. And you simply cannot put a price on that feeling.
Lower Living Expenses and a Better Future
Again, in theory, due to their small footprint, tiny homes require less energy to heat up, are easier to clean, and overall require less energy to maintain than a regular house or an apartment do. Those savings in time and money could translate into more money being dedicated towards a retirement fund, paying off debt, hobbies or artistic pursuits, or furthering education.
If you want to eventually live in a “normal home” with a mortgage, living in a tiny home for some time can also help you save up enough money for your down payment.
A Greater Sense of Freedom and Mobility
Do you want to live a more adventurous life on the road, but not give up the comfort of your home? There’s a large variety of mobile tiny home models that allow their owners to relocate whenever they wish.
Are you an environmentally conscious owner looking to lower your carbon footprint or live off the grid? You can choose to power your tiny home with solar panels, and install a composting toilet, which eliminates the need to be connected to a sewage system. Just make sure to check what rules and regulations apply.
The Promise of a Simpler Life
Though living in a space that is under 500 square feet may seem overly limiting for the average homeowner, many tiny home enthusiasts find it liberating and enriching, since it allows them to focus on what’s truly important in their lives.
In an increasingly materialistic world that constantly pushes all of us to make unnecessary purchases just to feel that we’re keeping up with the Joneses, there’s a segment of the population that yearns for a simpler, less complicated life. For those individuals, a tiny house could be the answer to their plight.
Since space is limited in a tiny house, the owner needs to be very careful and make some very calculated and conscious decisions as to what stays and what needs to go. With no room for an extensive wardrobe, unnecessary appliances, or space-consuming electronics, tiny home owners are forced to keep only what is necessary.
Is a Tiny Home Right for You?
Let’s be completely honest, tiny home living isn’t for everyone, nor is it a perfect living arrangement. Even vocal proponents of tiny homes are quick to admit some of the downsides.
Zoning laws and regulations haven’t caught up yet with the tiny home movement, so tiny homes are often in an uncomfortable legal limbo, somewhere between regular homes and mobile homes.
True, it’s easy to fall in love with the idea of owning a mortgage-free home that lets you travel wherever you want, but it’s important to do your homework. Before you decide to join the tiny home movement, be sure to check your local laws, and weigh up the pros and cons of living in a tiny home.
This is a guest post by Misael Lizarraga, owner of Real Estate Content Guy. As a former real estate agent, and a current digital nomad, he uses his unique perspective to cover real estate news and trends from coast to coast.