If you are a home buyer looking for real estate in the current market, you may be discouraged by the lack of available and affordable inventory. Often, this leads buyers to consider downsizing, manufactured homes, or even tiny homes. At 400 square feet or less, this may not be a viable option for many families, but for single individuals, newly married, or retired snowbirds, tiny homes may be the perfect option.
As we reported in our last real estate market update, the average Montrose home price is sitting around $442,000 this summer, so a smaller footprint might be the only way some buyers can afford a home purchase. According to Home Advisor, a tiny home can cost between $30,000 and $60,000 to build or buy depending on how customized the home is. Keep in mind, this is just the home building price, not the land purchase, zoning, permits, or connection to utilities. Even the construction of a foundation can run you an extra $5 to $7 square foot if you plan to make it a permanent structure.
There are many options to maximize your investment in a tiny home with some basic kits priced between $6,000 and $8,000, but those often don’t include doors, windows, or any customizations to your home. According to Forbes, the average cost with finishes can vary dramatically depending on the square footage as shown in the graphic below. Even luxury tiny homes can cost upwards of $180,000!
So, are tiny homes a good investment? It depends! A lot of these smaller homes are built on a moveable “foundation” which makes them depreciate like a mobile/manufactured home would according to Dave Ramsey. It may be cheaper than renting a home if you’re looking for a long-term investment, especially on a permanent foundation, but keep in mind, the land it sits on may increase in value, but not necessarily the house itself. Take into consideration the resale value in your pros and cons list as well. An emerging trend is tiny home communities like the one south of Montrose where buyers expect the smaller square footage, but overall, there is not a huge amount of buyers for this unique market.
If you’re looking for adventure and freedom from on-the-grid living, mobile tiny homes might just be the perfect option for you, but do your research before diving into this avenue. These homes are similar to living in a camper with low head space above the bed if it features a loft, so a tall individual may feel a bit claustrophobic. The style of living requires minimal personal possessions or a separate storage unit if you’re not ready to part with the majority of everything you own, but sometimes the freedom of the smaller footprint can be liberating. Interested in the tiny home real estate market? Give us a call to begin your search!
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