House Hunters". The houses are so charming but boy
are they expensive! I agree wholeheartedly in scaling
back...staying small so you can live large in other areas
of your life but I don't think it's a good idea to spend a
ton of money on a depreciating asset.
A Tiny House is like an RV, it is not real property. It becomes real property when you buy land and affix it to the land on a permanent foundation. My guess is that once you have purchased the land, the price tag for your Tiny House won't be so tiny depending on where you live. Seems to me like then you will have paid a lot of money for an extremely small house.
A Forbes article in 2014 on Tiny Houses that said the average tiny house costs between $200 to $400 square feet which is far pricier than the cost of an average home. In March of 2014 Zillow said the average California home was $268 per square foot, far less than you will pay for a tiny house and the California house will most likely appreciate over time, your tiny house on wheels will not.
You Can buy an Owner Occupied 2-4 unit property With just 3.5% Down and It can be a gift from a relative.
I went on Tinyhouselending.com and found out that with a credit score of 680 you can pay anywhere from 5.99% to 32.99% to finance your Tiny House if you can't pay cash. Today average fixed rates on an FHA are in the low to high 3% range. Now in addition to the principle and interest payment on an FHA loan you have Mortgage Insurance and, on any real property you have Property Tax and Homeowner's Insurance. You will also have utilities on any type of house, tiny, medium or large.
Now...a good portion of your monthly payments on real property (not your tiny RV house) are tax deductible which saves you money on your income taxes (talk to your accountant). On your 2-4 unit property your tenants will be paying a good chunk of the payment for you. Overtime your property will be paid off (a healthy portion of it by your tenants) and over time your property should appreciate based on history.
Let's pretend your 2-4 property NEVER appreciates...
not Even one dime.
1. Your mortgage is gone...thanks to your tenants and partly to you.
2. You are getting income from the other units.
3. You are living for free and making money as well.
4. And now you own an income producing asset worth $450,000
So stay small so you can live large in other areas of your life, but maybe not in an expensive, depreciating Tiny House.