Tiny houses are all the rage these days. With an extremely minimal cost of building the house, no mortgage payments, and a minuscule on-going maintenance cost, we can see why these homes are compelling to savvy, cost-conscious millennial home-wanters.
How much money can you really save with a tiny home?
- Building the House
The average cost of building a tiny house yourself (200-square feet) including permits, materials, labor, insulation, electricity, and plumbing generally ranges from $25,000 to $35,000 (Source: Realtor.com) whereas if you’d like to hire a company to take care of everything for you, the cost will increase to $50,000-70,000. This is compared to a whopping $292,929 to build the average 2,000 square-foot home. Clearly, that is a HUGE difference and the financial appeal is obvious.
- Mortgage – or lack there-of!
The median mortgage cost in the United States according to the US Census Bureau 2015 American Housing Survey is $1,030. However, according to thetinylife.com, 68% of tiny house owners don’t have any mortgage at all! Because tiny houses are far more affordable than traditional homes, most owners have no necessity for a mortgage. Imagine the sense of commitment-free freedom this grants a person.
According to the U.S Department of Energy, the typical U.S family spends $2,060 on average per year, or $172 per month, for home utility bills such as water, heating/cooling, trash/recycling and internet/cable. You ready for the tiny house figures? $10-35 per month on utility bills. Just 10. To. 15. Dollars. Per. Month. Can’t beat that.
- Insurance & Property Taxes
According to Smartasset.com, on average, homeowners pay $1,034 per year for insurance and have an average property tax rate of 1.29%. On a $200,000 home, that comes to $2,580 in taxes per year and a total of $3,614 when you factor in the insurance. That’s over $108,000 in addition to a mortgage over a 30 year period! According to tiny home insurer Darrell Grenz of InsureMyTinyHome, with a tiny house, the cost is far lower. Because of the low cost of the home, the percentage property tax ends up coming out far lower and because cost of rebuilding is so low if your home is ever damaged, insurance cost can be as low as $600 per year! Wow, right?
The Bottom Line
According to TheTinyLife.com, 55% of tiny house owners have more savings in the bank and 89% of tiny house owners have less credit card debt than the average American.
The bottom line is that those with tiny homes often end up with much bigger pockets than the average person and the financial opportunity and freedom tiny house living affords an individual can be game changing.
Ultimately, it’s up to you if the trade-off of less space and more money in the bank is worth it, but it sure is a compelling proposition to consider.
Happy home hunting!
-The Proguard Team
If you do choose to ever explore the tiny-house lifestyle, you might need an extra space for storage. Check out our self storage locations for more information on a Proguard location near you!