A tiny home for a tiny mortgage for this couple

[Belcat]

This couple decided to sell their 900 sq condo and buy a 207 sq foot home instead, to have a smaller mortgage (and everything else).  Sounds very mustachian, if you can handle it.


http://www.cbc.ca/news/canada/ottawa/tiny-living-room-sized-home-attracts-ottawa-couple-1.2788229

[Nyarlathotep]

It seems pretty bad ass. And yeah... The whole smaller home smaller mortgage could increase your rate of investment astronomically. The only thing that gets me with tiny home is what kind of depreciation do they face and what kind of maintenance is required to keep them mobile? But hell it is not like a house that is built on a foundation doesn't require maintenance or anything.

[MrsPete]

Not impressed.  Do the math compared to my own house:

A 207 sf house worth 50K costs $241 per sf. 
In comparison, my 2400 sf house worth 150K costs only $62 per sf -- AND that includes the land upon which the house sits. 

If you genuinely want to live in a large closet, you can do it cheaper than these folks did.  For starters, ANY custom-built house is going to be more expensive than an already-existing house.  And if they did want to live in a house this size, a trailer (or an RV) would've given them that for less than 50K, especially if it's used. 

Finally, I wonder if the house will "be enough" for them as time goes on.  They look like a young couple.  They may live happily in this tiny space, but adding even one child would be tough.  And as they grow older, they won't be able to live in this house if one of them needs a walker or a wheelchair.  And re-sale could be tough; their potential pool of purchasers is going to be small.

[mm1970]

Not impressed.  Do the math compared to my own house:

A 207 sf house worth 50K costs $241 per sf. 
In comparison, my 2400 sf house worth 150K costs only $62 per sf -- AND that includes the land upon which the house sits. 

If you genuinely want to live in a large closet, you can do it cheaper than these folks did.  For starters, ANY custom-built house is going to be more expensive than an already-existing house.  And if they did want to live in a house this size, a trailer (or an RV) would've given them that for less than 50K, especially if it's used. 

Finally, I wonder if the house will "be enough" for them as time goes on.  They look like a young couple.  They may live happily in this tiny space, but adding even one child would be tough.  And as they grow older, they won't be able to live in this house if one of them needs a walker or a wheelchair.  And re-sale could be tough; their potential pool of purchasers is going to be small.

You forgot location -
Yes, $50k is expensive in some areas of the country, but here it would get you...nothing. Literally.

I would guess that there condo will sell for easily 4x that?  Just going off the article.

Ottawa, I'm guessing your typical RV isn't winterized enough for Ottawa.

I think what most critics of the whole tiny house movement "miss" is location.  If you truly want to live where you live, a tiny house is often just the way to do it for less.

[frugal_c]

Hats off to these two.   We can debate all we want about the merits of a tiny house but their willingness to sacrifice to boost their finances will ultimately pay off.   

[Overseas Stache]

I think there is some mystical draw to living in a small house, but it doesn't make the most sense financially. A very quick search of real estate in Rockland (the place they will put their house for free), reveals a 3 bed 2 bath home for 134K http://www.ovlix.com/ca/property/Ij3JJj2b-3435-Old-Highway-17-Rockland-ON-K4K1W1. This would be a much better option, buy a 3 bedroom house do a remodel to section off 207 sq ft for oneself, and then rent the rest of the house out to easily cover the PITI. I'm sure you could remodel it to fit specifications for much less than 50K plus you would actually own the land. Then you would have an appreciating asset that generates cash flow. Of course it is not cool and hip, and no one will write an article about you.

[Overseas Stache]

I just looked at the pictures on the house I linked to and it actually already has a small additional building on the property. This place would be perfect for them.

[needmyfi]

I think there is some mystical draw to living in a small house, but it doesn't make the most sense financially. A very quick search of real estate in Rockland (the place they will put their house for free), reveals a 3 bed 2 bath home for 134K http://www.ovlix.com/ca/property/Ij3JJj2b-3435-Old-Highway-17-Rockland-ON-K4K1W1. This would be a much better option, buy a 3 bedroom house do a remodel to section off 207 sq ft for oneself, and then rent the rest of the house out to easily cover the PITI. I'm sure you could remodel it to fit specifications for much less than 50K plus you would actually own the land. Then you would have an appreciating asset that generates cash flow. Of course it is not cool and hip, and no one will write an article about you.

+1  in fact kind of brilliant.  And more mustachian for sure.  Also more environmentally friendly since it would take only a small amount of new material to make two residences

[frugal_c]

Splitting up a house and renting is a good idea, but I don't think it's fair to compare a rental situation to just owning. 

[Overseas Stache]

Splitting up a house and renting is a good idea, but I don't think it's fair to compare a rental situation to just owning.

Why is it not fair to compare all the options financially? If one is really looking for the most cost efficient living situation all options should be looked into. Renting, owning, owning a small house, living in a car/trailer, owning and renting out. Of course there are other factors that people should consider just besides how much money it will cost or save them but in a financial comparison owning a house and renting it out will win hands down compared to building a mini house for $50k (in Rockport Canada).

[Johnez]

The condos aren't quite as small as the Leonardos' new home, ranging between 300 and 500 square feet. The lowest starting price sits at $180,000.

Wow.  Is housing really that bad in Ottawa?

[Bob W]

50K for 200 sq ft!  You gotta be kidding me?   

For me the idea of a tiny house is to build it on your own land for about $25 a square foot and make it off grid energy efficient.   Spending $250 a square foot is crazy thinking.  My biggest cost will be the land. 

[MrsPete]

I think there is some mystical draw to living in a small house, but it doesn't make the most sense financially. A very quick search of real estate in Rockland (the place they will put their house for free), reveals a 3 bed 2 bath home for 134K http://www.ovlix.com/ca/property/Ij3JJj2b-3435-Old-Highway-17-Rockland-ON-K4K1W1. This would be a much better option, buy a 3 bedroom house do a remodel to section off 207 sq ft for oneself, and then rent the rest of the house out to easily cover the PITI. I'm sure you could remodel it to fit specifications for much less than 50K plus you would actually own the land. Then you would have an appreciating asset that generates cash flow. Of course it is not cool and hip, and no one will write an article about you.

My thoughts . . . expressed better.

[Overseas Stache]

I think there is some mystical draw to living in a small house, but it doesn't make the most sense financially. A very quick search of real estate in Rockland (the place they will put their house for free), reveals a 3 bed 2 bath home for 134K http://www.ovlix.com/ca/property/Ij3JJj2b-3435-Old-Highway-17-Rockland-ON-K4K1W1. This would be a much better option, buy a 3 bedroom house do a remodel to section off 207 sq ft for oneself, and then rent the rest of the house out to easily cover the PITI. I'm sure you could remodel it to fit specifications for much less than 50K plus you would actually own the land. Then you would have an appreciating asset that generates cash flow. Of course it is not cool and hip, and no one will write an article about you.

My thoughts . . . expressed better.

I think your original post was right on the money. I just had to look up the cost of local properties because another member had pulled out his "location card".

[Gerard]

Not impressed.  Do the math compared to my own house:

A 207 sf house worth 50K costs $241 per sf. 
In comparison, my 2400 sf house worth 150K costs only $62 per sf -- AND that includes the land upon which the house sits. 

Okay, that is technically "math". But I think the price per sf is an inappropriate metric for informing one's frugal-ish housing choices. I know, realtors love it, because it encourages over-buying. Kind of the home equivalent of supersizing. "Look how much MORE I got!!!"

I'd like (or even prefer) a smaller place. A lot of it comes down to how much stuff I want to put in my house (very little), who else I have to impress (nobody), my ever-changing sense of "normal" (which is shrinking through travel), and how much time and money I want to spend on heat, maintenance, mortgage interest, taxes,and repairs (not much) . These things definitely matter more to me than the bargain I would supposedly get by buying much more wood-enclosed air.

[MoneyCat]

I don't think that price is too bad for something custom-built to their specs.  You need to remember that a big difference is going to be the cost of maintenance and utilities, which will be drastically reduced in a tiny house compared to regular housing.  Their taxes are also probably miniscule (pun intended.)

[frugal_c]

Yeah a big part of the cost of the house is not the structure or the square feet but the utilities/bathroom/kitchen.   You have to bring in sewage, water, electricity, heating (natural gas?).   You have to put in an electrical box.   You need a furnace of some type installed.    You need a sink in the kitchen, toilet, sink in the bathroom, bathtub.   I would guess all of those things are 25-30k.    From that perspective, yes you could probably add another 100 or 200 sq feet of just space for an extra 10 to 20k.   

However, there is something to be said for minimizing your impact on the environment, keeping your heating to a minimum, etc.   The other benefit of a tiny house is that it encourages you not to be in it!    It becomes more of a crash pad than a lounging zone.   It also encourages less stuff accumulation.  It also cuts down on the cost of future maintenance.   

The only issue I see with this particular situation is that they don't own the land and that will create some complexities.  Hopefully they have thought through how they will exit this.   Regardless, I think they will be able to sell it in a heartbeat given comparable costs.

[2lazy2retire]

Not impressed.  Do the math compared to my own house:

A 207 sf house worth 50K costs $241 per sf. 
In comparison, my 2400 sf house worth 150K costs only $62 per sf -- AND that includes the land upon which the house sits. 

Okay, that is technically "math". But I think the price per sf is an inappropriate metric for informing one's frugal-ish housing choices. I know, realtors love it, because it encourages over-buying. Kind of the home equivalent of supersizing. "Look how much MORE I got!!!"

I'd like (or even prefer) a smaller place. A lot of it comes down to how much stuff I want to put in my house (very little), who else I have to impress (nobody), my ever-changing sense of "normal" (which is shrinking through travel), and how much time and money I want to spend on heat, maintenance, mortgage interest, taxes,and repairs (not much) . These things definitely matter more to me than the bargain I would supposedly get by buying much more wood-enclosed air.

"who else I have to impress (nobody)" - I guess this is where one needs to be careful, I sense a little bit of look at us/me in our 200 sf house. Watched a recent documentary on netflix about a couple building a tiny house, they already owned the land so no limit there, from what I observed a huge amount of planning and time ie expense went into creating ingenious ways to store stuff and turn beds into sofa's/desk's etc when clearly adding another room would have been alot more resource and money friendly, but of course not as cool.
I think there is a huge argument for tiny homes approach in expensive cites where space is a premium - ie New Yorks of the world, but outside of that a more practical approach is required. By all means keep it small but if you need to still store all you sh!t then just add another closet or room FFS.
PS - I think there should be a follow up on these couples in "tiny homes" - see how long it lasts once the media lose interest.

[Gerard]

"who else I have to impress (nobody)" - I guess this is where one needs to be careful, I sense a little bit of look at us/me in our 200 sf house. Watched a recent documentary on netflix about a couple building a tiny house, they already owned the land so no limit there, from what I observed a huge amount of planning and time ie expense went into creating ingenious ways to store stuff and turn beds into sofa's/desk's etc when clearly adding another room would have been alot more resource and money friendly, but of course not as cool.

Hmmm, good points. I still lean toward "make it smaller" when given two options, just because the daily costs for each extra square foot often win out for me over the advantages of more stuff/space.

There's a lot to be said for a compromise position, like a wee house with a big balcony or unheated solarium. It's nice to hunker down in the tiny space in the coldest months, then expand your life (and your parties?) into a bigger, cheap-to-build annex.

[sobezen]

I'd do it!  You'd be amazed at how well designed some of the tiny homes are becoming, especially the transforming ones.

[sly]

I would expect maintenance and heating/utilities cost to be much lower in a tiny house, that needs to be factored into the math. That said, I'm still waiting for a liveable, well designed 20K tiny house that really makes economic sense and isn't only there to look cool in some hipster blog. 

[Dicey]

http://www.ovlix.com/ca/property/Ij3JJj2b-3435-Old-Highway-17-Rockland-ON-K4K1W1

Looks like the listing is no longer available. Which one of you bought it?

One more thought about square footage. There are also efficiencies in utility costs. Sure, a larger home in a lower COLA might sell for fewer dollars per sf, but every additional sf costs more to heat/cool, plus all the other utility costs, not to mention property taxes. SF is just one measuring stick, not the be-all, end-all of home values.

[Overseas Stache]

http://www.ovlix.com/ca/property/Ij3JJj2b-3435-Old-Highway-17-Rockland-ON-K4K1W1

Looks like the listing is no longer available. Which one of you bought it?

One more thought about square footage. There are also efficiencies in utility costs. Sure, a larger home in a lower COLA might sell for fewer dollars per sf, but every additional sf costs more to heat/cool, plus all the other utility costs, not to mention property taxes. SF is just one measuring stick, not the be-all, end-all of home values.

I'm not surprised it sold it seemed like a good deal. 3 bed 2 bath with a unfinished basement plus another small building on the property and it looked like it was in good shape and all for 134K in the same exact area that they plan on spending 50K on tiny house on land they don't own. smh.