The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: treesner on June 19, 2019, 12:36:40 PM
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I keep going back and forth about this idea of tiny house for and wanted to get your guys take on it from an investment point of view.
I’m looking for a place ~30 minutes from tahoe in the woods (hopefully out of the snow) and would really like to have 2-5 acres of land. It’s hard to find a house + land for a reasonable price but there’s quite a few land only properties which is making me consider the tiny house idea. Ideally I would like to spend 350k. My main priority is having workshop area (woodowkring/art/metal act) so I would probably put up a cheap metal shop building (or small sheds) on the property and the tiny house would just be for sleeping / cooking not really spending a ton of time in it.
I think you would classify a tiny house as a trailer/vehicle which depreciate like crazy. Making it a bad investment.
I know people buy tiny houses so they can park them on other peoples property. But when I look at the cost of renting a space for tiny houses its as much as renting a room in a house. So I would be purchasing land for the tiny house to sit on. This would probably be considered a good investment but it seems like having a real house on land is a better investment because it is easier to sell to someone.
Abt thoughts on what I should do and if tiny houses are good/bad investments?
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With exception of a few areas, most houses aren't very a good investment when you consider the cost of upkeep, taxes, etc. You may sell it a few years down the road for more than you bought it for, but after considering expenses, you are unlikely to come out ahead. Tiny houses appeal to only a small portion of the house buying public. I think you will come out worse on it than you would on a conventionally built / sized home.
If tiny is your thing and it's not against local codes, etc. just use a camper. They're probably built as good or better than most of those tiny homes and there are a whole lot of used ones around that can be purchased quite cheap.
A big issue in the remote west is access to utilities; water, sewage disposal and electricity. Check all of that out before jumping into a piece of property.
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Utilities and access are going to be your big issues. Price out what it'll cost to run 220v power out to your land/welding shop. Price out what it'll cost to do septic (and if it's legal). Figure out what property taxes will be if the land is improved/built on vs. vacant.
Land is often not as good a deal as it looks. But sometimes it is, too.
-W
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Are you a full time artist? If so, congrats on (hopefully) being in a position where spending $350,000 on *anything* is possible. That's awesome.
Tiny houses are against the grain of current American culture. So you'll have a harder sell when it comes time to sell, unless you're in an area where rich people want to spend that kind of money on a weekend get-away rustic cabin.
I don't know what your other residence options are, but $350,000 is a LOT of money to spend on a place to live.
If you're an artist and can work anywhere, why work somewhere the housing costs $350,000 when you could live somewhere for a tiny fraction of that? There are lots of beautiful places in the world chock full of nice, interesting people.
My wife and I are doing very well financially and we wouldn't spend that kind of money on lodging unless we had no other choice. We live in a $330,000 house but we only paid $228,000 for it, which is pretty much the most I would be willing to go. Took us 4 years to find the right house at the right price and I'm glad we're not on the hook for another $120,000.
I'm hoping the $350,000 cost includes the tiny house, the workshops, and all the various electrical and water hookups you'll need.
PS -- if you find yourself in the Fayetteville, NC area, drop by for a visit. I've always got an extra seat available in my woodshop and metal/glass and pottery studio.
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I think the better question regarding the tiny house would be is it legal there? I built a tiny house and eventually gave up and sold it because it's not legal here in Michigan for full time living. I couldn't justify buying land and bringing the utilities to it....only to get in trouble for living in a tiny house and not being able to use it. A lovely couple ended up buying it as a mother in law suite for their out of state relative to have a private place to stay when visiting.
Also, to the person who mentioned a camper was probably better built than a tiny house....I highly disagree. I bought a camper hoping to simply update it and ended up ripping it down to the metal frame and rebuilding with 2x4's. That Gulfstream camper was literally held together, from the factory, with duct tape in some places.
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I agree with using a camper over a tiny house, and most campers are better built than a tiny house because they're made to survive the abuse of towing...but all depends on who and how it was built. You can also get a camper with slide out which increases your living space a fair amount. The tiny house/camper is a pretty awesome way to shortcut property taxes. In Maryland anything with a foundation and bathroom is taxed as live-in real estate and a 3 acre lot with a 2000 SF home is typically about $4k+/year in taxes. A 3 acre lot with just a camper on it is about $800/year in taxes. With a camper or tiny home you also don't need to have a septic system as long as everything is self contained. I'd live in a camper in a heartbeat if I could get my other half on board.
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Maybe you could do like we did and buy some timber land with low taxes. We pay $27 a year in tax on 28 acres. We use a camper on it when we visit it but we are not full time living there. We have not drilled a well or installed a septic system so there are no taxes on those.
I am all about low ongoing costs, so $27 a year fits our plans well.
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I'd scrap the "tiny home" idea. We did a similar thing and realized that the tiny home was a mistake. We ended up moving it & enlarging it couple of years later, and enlarged it again in about 10 years.
I'd recommend building a pole barn for the studio space & adding a loft or an appartment on one end.
When it comes to a studio or any kind of workspace "bigger is better". After building our studio I realized that National Barn would have constructed a nice maintanence free building that was 3-4 times the size we built for the same price. :(
IMO, a tiny home is just a pretty jail cell. You only want to be in it if it's cold, dark, or raining. Your creative juices will be focused on how to get more living space & that's no good.
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I'd scrap the "tiny home" idea. We did a similar thing and realized that the tiny home was a mistake. We ended up moving it & enlarging it couple of years later, and enlarged it again in about 10 years.
I'd recommend building a pole barn for the studio space & adding a loft or an appartment on one end.
When it comes to a studio or any kind of workspace "bigger is better". After building our studio I realized that National Barn would have constructed a nice maintanence free building that was 3-4 times the size we built for the same price. :(
IMO, a tiny home is just a pretty jail cell. You only want to be in it if it's cold, dark, or raining. Your creative juices will be focused on how to get more living space & that's no good.
Thanks for sharing your experience. I'm always going back and forth about it since I spend so much time in the garage/shop and just need a small warm room to sleep/play music and do the computer side of business (things might be different if I wasn't single with no kids).
I'll have to look more into the pole barn pricing and what the permitting is for doing a living quarters/shower/mini kitchen type of thing. I bet California doesn't like hah
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Are you a full time artist? If so, congrats on (hopefully) being in a position where spending $350,000 on *anything* is possible. That's awesome.
Tiny houses are against the grain of current American culture. So you'll have a harder sell when it comes time to sell, unless you're in an area where rich people want to spend that kind of money on a weekend get-away rustic cabin.
I don't know what your other residence options are, but $350,000 is a LOT of money to spend on a place to live.
If you're an artist and can work anywhere, why work somewhere the housing costs $350,000 when you could live somewhere for a tiny fraction of that? There are lots of beautiful places in the world chock full of nice, interesting people.
My wife and I are doing very well financially and we wouldn't spend that kind of money on lodging unless we had no other choice. We live in a $330,000 house but we only paid $228,000 for it, which is pretty much the most I would be willing to go. Took us 4 years to find the right house at the right price and I'm glad we're not on the hook for another $120,000.
I'm hoping the $350,000 cost includes the tiny house, the workshops, and all the various electrical and water hookups you'll need.
PS -- if you find yourself in the Fayetteville, NC area, drop by for a visit. I've always got an extra seat available in my woodshop and metal/glass and pottery studio.
Unfortunately I'm not making it full time as an artist. I've got a well paying day job that leaves me craving more creative things so I work hard on personal projects after work. My whole path to FIRE is basically to just be FI so that I can live off the small income of being a craftsman/creative.
as I dive further into home search its almost that 350k is the very low end, I'm unfortunately creeping up into looking at 550k houses that hits my marks of wanting 3-6 acres of land, house without a ton of remodeling and a solid workshop area. I would definitely be renting out additional rooms at that point.
As I creep up in cost it had me thinking more about this post and going back to the more cheaper alternatives of the more tiny house style or pole barn with living quarters..
Maybe I should consider looking to move out but i've been traveling all over and just haven't found a location that I like more than the Sierra Nevadas. I do a lot of off road riding which is a big part of one of my side businesses and being somewhere like Nevada City, CA where I'm out of the snow in the winter but close to some of the best riding I've done in the summer + a pretty creative feeling mountain community makes it pretty promising.
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I think the better question regarding the tiny house would be is it legal there? I built a tiny house and eventually gave up and sold it because it's not legal here in Michigan for full time living. I couldn't justify buying land and bringing the utilities to it....only to get in trouble for living in a tiny house and not being able to use it. A lovely couple ended up buying it as a mother in law suite for their out of state relative to have a private place to stay when visiting.
Also, to the person who mentioned a camper was probably better built than a tiny house....I highly disagree. I bought a camper hoping to simply update it and ended up ripping it down to the metal frame and rebuilding with 2x4's. That Gulfstream camper was literally held together, from the factory, with duct tape in some places.
yeah I've seen some people tear into campers and they seem pretty janky inside compared to a framed out tiny house.
been kind of throwing around the idea of buying a house with some property and a detached garage then Parkin a tiny house (or camper) behind it and just renting out the whole house to pay for the majority of the mortgage?
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I was thinking about looking into doing something similar , get five or so acres and set up like 5 rv hookup spots with septic water power and then have a tiny house coop or park. Have you found out any more about zoning in the sierras ?
It seems like if you go to the effort to do it for yourself, adding an income component would offset the lack of resale value of the tiny house.
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I would look into buying a large property with a regular house on it, and setting up a tiny house and workshop on the property, then renting the main house to someone else. It might end up being cheaper and could potentially sort out some possible zoning issues. And over time, it could be another income stream for you to have the rental.
Or renting out space on your land for other tiny homes or rvs.