Do Tiny Homes Hold Their Value?

Tiny homes have become increasingly popular over recent years, thanks to their relative affordability compared to traditional buildings. While they tend to be more expensive per square foot, the small size makes the upfront cost far more achievable. 

However—and this is the million-dollar question—do tiny homes hold their value?

The answer isn’t as simple as a yes or no. We need to define what we mean by a tiny home, consider the different types, and other aspects, including the location and the intended use.

The Different Types of Tiny Homes & Do They Hold Their Value?

• Different types of tiny homes
• Do tiny homes hold their value or increase as traditional real estate does?
• Is a tiny home a good investment?

Different types of tiny homes

Tiny homes come in many guises. They can be self-built and constructed from your chosen materials or purchased in pre-formed, modular parts. Other tiny homes include:

• Those on wheels, often called a traditional house on wheels (THOW).
• Built inside a shipping container.
• Micro-apartments in an urban setting.
• Even a tree house construction with associated power and water facilities could be considered a tiny home.

Do tiny homes hold their value or increase as traditional real estate does?

Whether or not a tiny home holds its value depends on multiple factors. The location is one. If you own the land and the tiny home has a solid foundation, then it’s likely to have a similar value and the potential to increase in value in the way a more traditional house does.

However, those that are on wheels are more akin to an RV. Rather than holding their value, these are likely to decrease over time unless you invest significantly into upgrades and attractive features.

Is a tiny home a good investment?

While some tiny homes can appreciate over time, they generally don’t do so as quickly or predictably as traditional bricks-and-mortar constructions. The exceptions to this are:

• Micro-apartments in a sought-after area: Even the tiniest of dwelling in a desirable location is likely to become worth more over time.
• A tiny home on a property that also has a traditional dwelling: These are considered accessory dwelling units (ADUs) and can add substantially to the value of the overall property.
• A tiny home made from quality modular construction and on a real foundation: While these may not appreciate the same way as a bricks-and-mortar house, they have the best chance of going up in value over time.

Overall, tiny homes are generally more of a lifestyle choice, rather than an investment opportunity. However, as more adults lean towards their affordability, the market may change over the coming years and decades.  

If you are thinking of going down the tiny home route, their rental potential can prove lucrative. Again, this will depend on the quality of the dwelling, its location, and the facilities. While they might not significantly appreciate in value, they can net a healthy monthly income, with some earning owners $1,000 or more each month. Holiday lets, in particular, can be a great market for tiny homes.

Looking to Fund a Tiny Home? BRRRR Loans Can Help

Although investing in a tiny home isn’t for everyone, their popularity continues to increase. Funding a purchase through a hard money loan can be an option. At BRRRR Loans, we take your individual circumstances into account, rather than a blanket, unyielding criteria. We’re also a responsible lender, so are happy to work with you to find the ideal method of funding your next property purchase—be it a tiny home or any other kind of real estate.

Find out more at https://www.brrrr.com and get in touch today to discuss the art of the possible.