Can Buying into The Tiny House Trend Save You Money?


Intrigued by the increasingly-popular tiny house craze? Wondering whether buying into the craze can save you money, or it’s simply another expensive and fleeting trend? As with any significant purchase, there are pros and cons to weigh. Here, we give a few of the common financial pros and cons of owning a tiny house so you can decide for yourself whether the promised savings are real or too good to be true.

What is a tiny house?

A home is generally considered a tiny house if it is less than 500 square feet, although most are even smaller (think: 300 square feet or even less!). Tiny houses can be built on wheels, like trailers, or stationary just like a “normal” house. 

Many people are drawn to the idea of a tiny house and the simplicity that it offers, from hyper-efficient appliances to smaller surface areas to clean. Not to mention, they’ve received substantial buzz from the media, from shows to blogs showcasing families who embrace an alternative lifestyle and commit to living with less.

Where a tiny house will cost you money

Let’s start with the cold hard truth: There are situations where owning a tiny house can cost you.

The cost of a tiny house varies widely, ranging from as low as $10,000 for a tiny (tiny) pre-owned house or a total DIY house to $300,000 or more for a luxury one. Aside from the cost of the home itself, let’s dive into some of the costs associated with living in a tiny house.

Financing a tiny house – without a mortgage

Unlike a traditional house, most banks will not offer mortgages to finance the purchase of a tiny house. Unless you can pay out of pocket for the entire cost of the tiny house, you will have to seek financing in other places, which are more expensive than a mortgage. Options for financing include an RV or trailer loan (if your house is on wheels) or a personal loan, both of which will have higher interest rates than a traditional mortgage.

Another option is to put your tiny house on one or more credit cards, but this can be quite costly, as the interest rate will be extremely high unless you can pay the balance off in full quickly after the purchase. If you are already in credit card debt before you even consider putting a tiny house (or any home-related purchases) on your credit card, consult with a debt relief company to discuss your options, such as debt consolidation or debt settlement, for paying off that debt.

Paying for land to live on

Once you buy your tiny house, you will need to figure out where to park it. The cost of this land will depend on where you would like to live and varies greatly by location. One expense to consider is the cost of renting the land for your house, as many places will not allow you to purchase land to put a tiny home on.

Low resale value

A custom-built tiny house might be your dream house, but tiny houses are generally harder to re-sell than traditional homes. Unlike traditional homes, depending on the type of tiny house and the location, tiny homes might depreciate in value (like an RV), rather than appreciate, as will a typical site-built home. As such, in the long run, you might lose out financially.

Where a tiny house will save you money

It is not all bad news, though, when it comes to money and tiny houses. In addition to the low cost to purchase the home, there are many ways living in a tiny house will save you money every month. 


The biggest savings will undoubtedly come from how much you save on utilities every month. Compared to a larger space, tiny houses are far more efficient. Every month you will save on heat, electricity, and water. Some tiny houses are even equipped with solar panels, saving tiny house owners even more on energy. And with less space, you will probably have fewer appliances. With no room for a dishwasher, washer or dryer, that means far less electricity use.

Less room = less stuff

Simply put, living in a tiny house will force you to cut back on all of your “stuff.” From clothes to books to kids’ toys, the space constraints of a tiny house will force you to keep and purchase only those things that you truly need. Without many rooms to fill up with furniture, decorations, and other things, you will free up your budget to spend on only the important things.

Save on maintenance costs

Just like having less space forces you to own fewer things, owning fewer things means fewer things to take care of and pay for. Owning a tiny house will save you money over time because there will simply be fewer things to maintain and repair. Even when you do need to make repairs (such as replacing a roof or repainting the house), because the house is so small, the cost to make such repairs will be significantly lower than if you were living in a larger house.

A smaller space is easier to clean, too. The time it might take someone to clean an entire home might be equal to the time it takes to clean an entire tiny home. This also means cleaning costs (whether you do it yourself and pay less for your cleaning supplies or hire someone else to clean) are lower, too.

Cutting back on the money you spend for maintaining and cleaning a tiny home also means less stress and more time for yourself – priceless, right?

Is a tiny house right for you?

Do you have your heart set on a tiny house? Hopefully, these pros and cons will help you decide whether a tiny house is right for you and your finances. If you have debt and think a tiny house might be a solution for your financial troubles, before doing anything such as taking out a personal loan or charging a tiny house on your credit card, reach out to a debt relief company and see how you can get rid of your debt before embarking on your tiny house adventure.