064: Dream Big, Live Tiny – The Financial Benefits of Tiny Home Living

Hey, I'm Chris.

I'm a former Analyst, Podcaster, and Producer. My goal is to help you understand your finances better in about the time it takes to make a bag of popcorn!

Have you ever heard of a Tiny Home?  Have you ever considered living in a Tiny Home as a way to reach financial independence?  Alan from DreamBigLiveTinyCo.com joins me to discuss the financial benefits of Tiny Home living.

Today’s episode started from a few posts that I uploaded on Instagram.  I have been fascinated by Tiny Homes for years now, so when I came across a few images like this one posted by @DreamBigLiveTiny, I knew that I had to share it.

Bonus Quick Pop Episode

I eventually got in to a conversation with Alan, who runs Dream Big Live Tiny, and asked him if he would join me on the podcast to talk about Tiny Home living and the different ways that it can impact your life financially.

What is a Tiny Home?

According to Alan, the traditional definition of a tiny home is a dwelling under 400 square feet.  Some people are more strict than others on what can be classified as a tiny home.  Alan says that he would qualify anything up to 500 square feet as a Tiny Home.  

These homes can be built on a traditional concrete foundation or, as is becoming more and more popular, on a trailer.

How Are People Living Tiny?

There are no real numbers out there as to which style of Tiny Home is the most popular, but Alan says that he most often sees homes built on trailers.  This allows for the owners to freely travel wherever they would like and take their home with them.

Recently there has been an increase in the number of Accessory Dwelling Units or ADUs.  These are typically built in the backyard or somewhere on the property of an existing home.

These Tiny Homes are built as a way of bringing in additional income to help pay down the mortgage of the primary home or help cover other expenses such as paying down debt. 

In some instances, some home owners will even move into the Tiny Home and rent out their main house to bring in even more income.

How Tiny House Living Can Help Free You Financially

With real estate prices steadily increasing, the cost of living is becoming more and more unaffordable.  According to Alan the average home price is around $240,000.  The average price for a Tiny Home between 180 to 200 square feet is under $15,000.  

Even with the trend of Tiny Home manufacturers using higher end materials and appliances which can push the cost near $100,000, there is still a huge financial savings.

Can You Get a Mortgage for a Tiny Home?

Whether or not you could get a mortgage for a Tiny Home was one of my biggest questions.  According to Alan, a traditional mortgage is still not a thing that you can obtain for a Tiny Home. 

Tiny Homes that are built on trailers are actually considered recreational vehicles and are only eligible for loans that are similar to auto loans with shorter terms and higher interest rates.

Making the Most of Your Space

Even though Tiny Homes are well, tiny, they are designed to make the most of the space.  A well laid out 400 square feet can be infinitely more useful that a poorly designed 1,000 square foot home.

This is one of the reasons why I love Tiny Homes.  They are designed to creatively use every inch of their living space.  Alan said that there are times when he walks into a Tiny Home and is blown away by how spacious it feels.

Dream Big, Live Tiny

If this episode has sparked your interest in tiny living then make sure you check out the work that Alan is doing over at DreamBigLiveTinyCo.com.

Alan does an amazing job documenting Tiny Homes all across the United States and the world.  I have come across so many amazing homes thanks to his website.

And please make sure that you follow him on Instagram @DreamBigLiveTiny!  You will see some places that will blow your mind.  But be warned, I am not responsible if you buy a Tiny Home after checking out DreamBigLiveTinyCo.com!

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