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Considerations Before Moving Into a Tiny House

A tiny house.

Dreaming of a simpler life with less clutter, a new way to shrink your carbon footprint, or an affordable alternative to traditional housing? If so, you may be wondering what life is really like in a tiny home.

From hit HGTV shows to DIY Pinterest boards, tiny homes are popping up everywhere in pop culture. While life in a tiny home may remain an escapist fantasy for some, others are taking the plunge into the tiny life and finding out that living small may be much harder or more expensive than they realized.

While there's no standard requirement to qualify as a "tiny home", reports that most tiny homes are between 100 and 400 square feet. Business Insider defines a tiny home as "any free-standing, single-family home that's less than 1,000 square feet." Either way, with the median size for a new, single-family home reaching 2,467 square feet - according to the U.S. Census Bureau data released in 2016 and reported by the Wall Street Journal - that's a pretty significant size difference.

Compared with the average American home, tiny homes may also have lower utility costs. There's significantly less space to heat and cool, not to mention fewer lights to leave on or appliances to run. However, tiny homes also present additional challenges that you may not have in a traditional single-family home.

Thinking about taking the plunge toward tiny home ownership? These are a few things to keep in mind:

Costs can vary widely. The idea of owning your home without paying a small fortune on your monthly mortgage and utility bills is certainly appealing. However, just like their larger counterparts, the costs associated with a tiny home can vary widely. If you have experience in construction, then building your own tiny home could be less expensive than buying a made-to-order home. Either way, some tiny home blogs and real estate websites estimate these costs could be $35,000 to $70,000. One reason for the higher cost per square foot is that tiny homes require compact, energy efficient appliances, which may be more expensive to purchase than standard appliances, according to the blog Tiny House Giant Journey.

Building codes and insurance may be a challenge. While one appeal of tiny homes is their portability, you'll still need a piece of property on which to place your tiny home. Depending on your location, local building codes may define a tiny home on wheels as a recreational vehicle, which could be banned from areas outside of an RV park.

Contact your insurance agent with questions. You may face additional insurance needs.

Try before you buy. Like any major purchase, a tiny home is a significant investment even if the one you buy costs less than a traditional single-family home. Living in a small space may require a significant lifestyle adjustment that seems great in theory but less doable in practice. Vacation rental websites like AirBnb are one option for test driving a tiny home for a few weeks before you sign on the dotted line and take the plunge toward tiny homeownership.

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