Are Tiny Homes Worth It? 21 Reasons Why They’re a Huge Mistake (2023)

Investing / Real Estate

9 min Read

By Daria Uhlig

All the hype surrounding TV shows like “Tiny House, Big Living”and “Tiny House Nation” have piqued the interest of peoplelooking for a financially and environmentally sustainable lifestyle. But what looks good on reality TV can be much less appealing in real life — especially if you have children.

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A home is generally considered tiny if it’s less than 600 square feet. However, the average tiny home is much smaller — just 225 square feet, according to a 2021 survey by Porch Research.

Before making a huge mistake, you should do your research and learn the true cost of getting a tiny house.

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Types of Tiny Homes

Tiny homes come in several varieties. At the higher end are traditional stick-built or modular homes constructed on permanent foundations. A more common style is built on a mobile trailer using conventional construction materials. It’s also possible to convert a shed or storage container into a tiny house by using the structure as the home’s shell.

But no matterhow you construct your tiny home, you might encounter the same problems with it — so, keep reading to see why you should think twice before springing for that purchase.

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1. Tiny Homes Are a Fad, Not a Trend

The difference between a trend and a fad is staying power. Trends endure and evolve, whereas fads are met with wild enthusiasm for a short time, but then they fizzle.

The tiny-home movement might’ve sprung from the trend toward minimalism and experiential lifestyles, but many proponents dive in without considering the significant challenges inherent in living in a tiny space — suggesting that tiny homes are a fad, not a trend.

2. Tiny Homes Are Expensive

The small size of tiny homes doesn’t make them much cheaper to build — in fact, the typical tiny house costs more per square foot than larger houses do, in part because larger construction jobs make for more efficient use of resources.

The average 2,600-square-foot home costs about $190 per square foot to build, according to Fixr, whereas the best-selling home constructed by Tumbleweed Tiny House Company — one of the best-known tiny-house builders in America — costs about $326 per square foot.

3. It Might Be a Home, but It’s Probably Not a House

Many tiny homes are built on trailers, which makes them recreational vehicles. In fact, the Tumbleweed Tiny House Company calls its products “tiny house RVs” and builds its homes according to the Recreational Vehicle Industry Association certification standards. By Tumbleweed Tiny House Company’s own definition, its products are RVs, not houses.

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4. Houses — Even Tiny Ones — Must Be Built to Code

Tiny homes built on foundations typically must meet the same code requirements as any other house, but the cost might be disproportionate — and even prohibitive — if you’re working with a bare-bones budget. You might have to prepare the land for construction, pull permits, order inspections and pay to bring utility service to the site.

5. Many Tiny-Home Owners Aren’t Tiny-Home Dwellers

Owners of tiny homes don’t necessarily live in their houses full time. Often, these owners use their homes as vacation getaways or trade up for larger homes. The challenges that come with living in a tiny home aren’t so challenging if you’re only there for a few nights per year.

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6. Millennials Might Regret Their Home Purchase

According to the “Real Estate Witch 2023 Millennial Home Buyer Survey,” Millennials’ biggest homebuying regret is paying too much interest (22%), which could make a case for going tiny. But almost as many (18%) regret not anticipating future needs — a regret that’s likely much more prevalent among tiny-home buyers.

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7. There’s No Space To Expand Your Family

A tiny home that works for individuals might not work for couples. And what works for a couple might not accommodate a baby and the supplies that come along with having one. Even bringing a pet into the mix can overcrowd your tiny space.

8. Tiny Homes Limit Where You Can Live

While some cities have loosened zoning restrictions to accommodate tiny homes, most cities don’t allow tiny homes on wheels to be parked in residential yards or used as permanent residences without the appropriate permits. You’ll have to research local codes and ordinances before you make any decisions, or park your tiny home in an RV park or other designated area.

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9. It’s a Tough Lifestyle

Tiny living takes a lot of work. You’ll have to go grocery shopping more often, pick up mail from a post office box and do frequent small loads of laundry in a compact washing machine. You might also have to empty out a composting toilet, climb in and out of a sleeping loft and grapple with multifunction furniture that needs to be opened or closed — or folded and unfolded — every time you use it.

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10. Tiny Living Isn’t Always Functional

Tiny living looks like a simple lifestyle at first glance, but it can actually be rather chaotic. Tiny houses often have low ceilings and tight transition spaces that require residents to constantly duck and squeeze as they navigate their surroundings, prepare meals, take showers and climb into bed. Even eating takeout becomes a chore when you lack adequate dining space.

11. The Cramped Space Wears On Your Mental Health

An overcrowded home has been linked to increased stress and anxiety in families, likely due to lack of privacy and disrupted sleep. Children might also find it difficult to locate a quiet place to read or complete schoolwork in such close quarters.

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12. Parking Your Tiny Home Isn’t Free

Unless you’re allowed to park your tiny home in someone’s backyard, you’ll have to find a place to put it — and that costs money. You can purchase land if you have enough savings or lease a lot — perhaps in an RV park or manufactured home community — for a fixed price per month.

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13. There’s a Limit to How Small You Can Go

Even if zoning laws allow you to build or park a tiny home, you’re not necessarily out of the woods. Those laws might also mandate the minimum size of the lot that your home sits on — typically 1,000 square feet. Considering that lots cost anywhere from about $6 per square foot in Mississippi to over $110 per square foot in Hawaii, according to Angi, lot requirements could interfere with your dreams of constructing your home on a small budget.

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14. A Tiny Home Might Not Be Legal in Your City

State and local governments have their own building codes for homes built on permanent foundations. Permanent tiny homes often don’t meet those standards, so you’ll need to check the tiny-house ordinances for the specific city you’re living in.

15. Tiny Homes Are a Bad Investment

A tiny home built on a trailer isn’t real estate, even if you own the land that it’s parked on. Tiny homes on wheels are personal property, and like other personal property — such as cars and RVs — they depreciate over time. Real estate, on the other hand, usually appreciates over time.

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16. You Might Get Stuck With It

In the event that you want or need to sell your tiny home, finding a buyer won’t be easy. Tiny homeownership has more barriers to entry than traditional homeownership — there simply aren’t as many people willing to live in 400 or fewer square feet.

17. RVs Are Less Complicated

Unlike tiny homes — which require utility hookups unless they’re made for off-the-grid living — RVs are designed to be self-contained, so they have their own water and power supplies, plus a septic tank to hold waste. Also, RVs are usually lighter and more aerodynamic than tiny homes, so they’re safer and easier to tow.

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18. Tiny Appliances Can Have Big Costs

From built-in vacuum systems that clean up pet hair to rainwater recycling systems to rotation devices that keep tiny homes facing the sun to maximize energy efficiency, construction trends can drive the cost of your tiny home way up.

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19. Financing Can Be Difficult

Unless your tiny home meets zoning and building code standards and is built on a permanent foundation, it won’t qualify for traditional mortgage financing. You’ll need alternative financing, such as an RV loan, a personal loan or a credit card, which can have higher interest rates and might require a better credit score than a mortgage loan.

For example, you can get RV financing from Good Sam with a credit score of 600, but you’ll pay an exorbitant annual percentage rate of 19.95% as of March 24 — more than triple the average rate for a 30-year fixed-rate mortgage. The minimum credit score jumps to 640 for loans of $50,000 or more, and rates are still double the average mortgage rate.

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20. Tiny Homes Typically Cost More Than RVs

Construction prices for a completed tiny house average $45,000, according to HomeAdvisor. For about the same price, you can get a 902-square-foot mobile home with three bedrooms and two bathrooms, according to Mobile Homes Direct 4 Less.

21. There Are Better Ways To Be a Minimalist

There’s a lot to be said for living simply and within your means. You can adopt that lifestyle now by selling extra belongings, vowing not to buy any more unnecessary items or even downsizing to a smaller — but not tiny — home. You’ll have a chance to build equity in your property instead of investing thousands into a potential fad that won’t appreciate.

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About the Author

Daria Uhlig

Daria Uhlig is a personal finance, real estate and travel writer and editor with over 25 years of editorial experience. Her work has been featured on The Motley Fool, MSN, AOL, Yahoo! Finance, CNBC and USA Today. Daria studied journalism at the County College of Morris and earned a degree in communications at Centenary University, both in New Jersey.

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    What are 3 negative features of a tiny house? ›

    Disadvantages of Tiny Houses
    • Less Living Space. A tiny house doesn't have room for a full-sized luxury kitchen or bathroom. ...
    • Less Storage Space. ...
    • Limited Entertaining Capability. ...
    • Zoning Rules. ...
    • Financing.

    Are tiny houses really worth it? ›

    Living in a smaller, more energy-efficient home with fewer belongings helps them reduce waste. In fact, a tiny home uses only about 7% of the energy that a traditional house does. Even if you're not totally off the grid, tiny homes can help you live sustainably, especially if you install solar panels or use wind power.

    What are 3 reasons people buy a tiny house? ›

    Top 5 Reasons to Buy a Tiny Home
    • Lower cost. Tiny homes cost significantly less than a traditional home. ...
    • More sustainable. ...
    • Less cleaning. ...
    • Reduced stress. ...
    • More time outdoors.

    What is the big problem with tiny houses? ›

    Tiny house owners can struggle to regulate the temperature in their tiny houses, with many saying it gets too hot too fast. As a result, water builds up on the windows, walls, and furniture. Without the proper ventilation and cooling systems — like air conditioning units — a tiny house can quickly create harmful mold.

    Why are people against tiny homes? ›

    Tiny Homes Are Expensive

    The small size of tiny homes doesn't make them much cheaper to build — in fact, the typical tiny house costs more per square foot than larger houses do, in part because larger construction jobs make for more efficient use of resources.

    How many years do tiny homes last? ›

    Tiny homes can last between 30 and 50 years with careful maintenance. Naturally, many different things will affect this, such as the materials used to build it and the construction method. A tiny home without a base typically breaks down faster than those on wheels.

    Do tiny homes actually save money? ›

    Conclusion. There is little doubt that living in a tiny house will save you money. In fact, 58% of people who live in tiny houses have about $11,200 more saved in the bank than the average American and 65% of them have no credit card debt.

    Are people happier in tiny houses? ›

    Research has suggested that people who live in tiny houses spend more time outside or with friends and family, which can make them happier than their overworked counterparts. However, building a tiny house still requires thousands of pounds and, importantly, somewhere to build.

    Is it hard to live in a tiny house? ›

    Tiny houses have their perks — they're both environmentally and budget friendly. But living in such tight quarters can create unexpected problems, like difficult zoning laws, easier wear and tear, taking care of compost toilets, and quick messes, to name a few.

    Why do people like living in tiny houses? ›

    Tiny homes are less expensive to build and maintain, provide mobility when built on a trailer, and yield a reduced environmental impact. At an individual level, to live 'tiny' necessitates taking a closer inventory of our wants and needs.

    How many people regret tiny houses? ›

    Not many, according to a recent report by Trulia. The online real estate resource polled more than 2,264 U.S. adults about what they wish they had done differently with their current housing. A whopping 44 percent of participants had housing regrets, and the biggest regret among homeowners had to do with size.

    How big is too big for a tiny house? ›

    Your tiny house can be any size you want it to be. And if it's so big that it meets your area's zoning requirements, who cares, as long as you're happy living in it? That said, if you really do want a rule of thumb, it would seem that tiny houses usually range between around 60 and 400 square feet.

    What are 2 disadvantages of living in small families? ›

    With fewer people contributing to the income, it may be more difficult to make ends meet. Additionally, there may not be enough people in the home to provide emotional support and caregiving as needed. This can be especially difficult for elderly parents or grandparents.

    How do you survive living in a tiny house? ›

    11 Tips for Living in Tiny Spaces
    1. Bring Less. ...
    2. Adopt a Net-Zero Shopping Policy. ...
    3. Designate a Place for Everything You Own. ...
    4. Invest in Organizers. ...
    5. Always Clean Up. ...
    6. Use All the Space, Outside and In. ...
    7. Take Turns. ...
    8. Keep Guests to a Minimum.
    Aug 20, 2018

    Do people regret buying a tiny house? ›

    A whopping 44 percent of participants had housing regrets, and the biggest regret among homeowners had to do with size.

    Do tiny homes really work as a solution to homelessness? ›

    But tiny homes work better than traditional homeless shelters: Stays in the two counties' largest dorm-style homeless shelters failed to lead to permanent housing between 84% and 98% of the time. Tiny homes also tend to offer more services than other shelters, but as a result, can be much more expensive to operate.

    What is the average budget for a tiny house? ›

    The average cost of a tiny house is a reasonable $30,000 – $60,000, although they can cost as little as $8,000 or up to $150,000 depending on the amenities you choose to include. It's typically cheaper to build a tiny house than to buy one prebuilt, but don't get too caught up in the savings.

    Can tiny homes survive the winter? ›

    Tiny house owners have to winterize their homes to ensure everything runs smoothly when the cold weather arrives. Pipes can freeze and burst, so tiny house owners need to spend time and money insulating pipes, tanks, and water connections that are on the outside and underneath their home.

    What percentage of people stay in tiny homes? ›

    Key Tiny House Facts

    The average size of tiny homes is 225 square feet, 8x smaller than the average home. Tiny homes currently account for 0.36% of the total residential listings in the U.S. There are about 10,000 tiny homes in the United States.

    Can you retire in a tiny house? ›

    Retirees are looking at going tiny as a viable option, too. If tiny homes have caught your eye, and you think you'd like to own one in retirement, you need to read this first. Learn what your options are, what bumps might be in the road, and the best way to plan your retirement escape to the tiny living life.

    How many people can comfortably live in a tiny home? ›

    A tiny house is different from a regular house in that it has all of the basic essentials, such as a kitchen and sleeping space, but none of the “dead space” a traditional house has. Tiny homes typically give enough room for one or two people to live comfortably without too many possessions.

    Can a couple live in a tiny house? ›

    One thing about living in a tiny home is that you will spend much more time together than couples living in a full-sized home. Because of this, it's easy to rationalize that you don't need to go out of your way to spend time together, but that's not the case.

    What is it actually like to live in a tiny house? ›

    In general, a tiny house is a lot easier to maintain because of its size. But dirt and clutter build up quicker and are noticeably faster. In a small space, you clean more often. But, that said, since it's a small house, it doesn't take as long, and a good handheld dustbuster is all you really need.

    What are tiny houses good for? ›

    Because of their small size and the fact that they don't require nearly as much time, money, or resources to build, a tiny house can fit quite nicely in a backyard or on a vacation property, and can be put to great use as a space for work, relaxation, or family obligations.

    What is a very small house called? ›

    • cabin.
    • cottage.
    • hut.
    • lean-to.
    • camp.
    • shed.
    • shelter.
    • tiny house.

    Is the tiny house craze over? ›

    "The movement hasn't stopped growing, it's just not in the public eye as much anymore." In 2009, I decided to start writing about living small. I created the blog, Living Large in Our Little House, and ultimately wrote a book by the same name.

    How tall can a bedroom be in a tiny house? ›

    1Minimum ceiling height. Habitable space and hallways in tiny houses shall have a ceiling height of not less than 6 feet 8 inches (2032 mm). Bathrooms, toilet rooms and kitchens shall have a ceiling height of not less than 6 feet 4 inches (1930 mm).

    What is the best size tiny house for travel? ›

    We recommend a house up to 24 feet long for towing. Anything larger (or heavier) gets unwieldy for travel.

    How big is a bathroom in a tiny house? ›

    How Big Is A Tiny House Bathroom? A tiny house bathroom usually ranges 25 square feet to 50 square feet. My rule of thumb is it should be 25% of your ground floor, assuming your bed is in a loft.

    What are the disadvantages of a tiny house? ›

    One of the disadvantages of tiny house living is that you give up full-size bathrooms and kitchens. You have less counter space in addition to storage space which can make cooking and getting ready in the morning a bit bothersome and something you'll need to adjust to.

    What are the pros and cons of a tiny home? ›

    The Pros and Cons of Owning a Tiny Home
    • Pro: Tiny homes cost less to build. ...
    • Con: It's almost impossible to get a mortgage for a tiny home. ...
    • Pro: You'll have a healthy savings account. ...
    • Con: Land purchases are just as pricey as real estate purchases. ...
    • Pro: Less clutter, and more quality moments with family.

    What are the pros and cons of living in a small house? ›

    Pros and cons of moving into a smaller house
    • Less expensive utilities. ...
    • Lower mortgage and property taxes. ...
    • Extra money for investments. ...
    • Downsizing on material items. ...
    • Money for quality materials. ...
    • Less cleaning time. ...
    • Limited amount of space for children. ...
    • Compromised privacy.
    Feb 9, 2023

    What is the lifespan of a tiny house? ›

    Tiny homes can last between 30 and 50 years with careful maintenance. Naturally, many different things will affect this, such as the materials used to build it and the construction method. A tiny home without a base typically breaks down faster than those on wheels.

    Are tiny homes safe in bad weather? ›

    With the proper weather-proofing, tiny houses are safe in thunder and lightning storms. Heavy rain can cause electrical or wood damage, so it's a good idea to take storm precautions. Protect electrical connections by trimming branches away from power lines, or run lines underground to protect them from the weather.

    What is the most common tiny house size? ›

    Key Tiny House Facts

    The average size of tiny homes is 225 square feet, 8x smaller than the average home.

    Are tiny houses a fad? ›

    Tiny Homes Are a Fad, Not a Trend

    The tiny-home movement might've sprung from the trend toward minimalism and experiential lifestyles, but many proponents dive in without considering the significant challenges inherent in living in a tiny space — suggesting that tiny homes are a fad, not a trend.

    How well do tiny homes hold up? ›

    Resale value: Tiny houses are not guaranteed to appreciate in value in the same way a traditional home does. Tiny homes can actually depreciate in value, especially if it is highly customized. These homes also fall into a niche market, so it may be more difficult to sell your home down the line.

    What are the benefits of owning a tiny home? ›

    One of the greatest benefits of a tiny home is the cost savings. Because the space is so much smaller than the average house, you'll have lower electricity bills, smaller monthly payments, and lower upkeep costs. On top of that, the house will cost less to buy upfront, or have lower rental payments.

    Is it better to live in a tiny house or an RV? ›

    Tiny homes are more weatherproofed.

    Owners can choose what kind of insulation and heating and cooling options suit them and their local climate, whereas RVs are generally not built to be lived in during the winter (though of course, one could tow it somewhere warm).

    Can you be happy in a small house? ›

    It's the space that home has for creating memories. Small doesn't have to mean cramped and cluttered. Even a small home can reflect who you are and what it is that matters most to you! When you focus on these benefits you too will be happy in a small home.


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