Is Financing a Tiny House a Viable Path to Financial Freedom for You?

Tiny House Floor Plans by Michael Janzen

The Cypress house ranges in price from $57,000 to $66,000, and monthly payments can be as low as $433 a month. One bed apartment rentals in New York City average about 750 square feet and cost $2,700 per month.” – Business Insider

The Apples to Onions comparison aside, the Tumbleweed Cypress is one of the most expensive tiny houses you can buy. But most folks seem to prefer to build their own tiny homes from savings and live debt-free.  Others argue that financing a tiny house can be a path to financial freedom too.

What do you think? Is financing a tiny house a viable path to financial freedom for you?

Continue reading about This Tiny House On Wheels Is Nicer Than Most Studio Apartments. Visit the Tumbleweed website to learn more about their homes. Photo by REUTERS/Rick Wilking.

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tiny-house-cypress-loft-photo-by-REUTERS-Rick Wilking

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6 Comments Is Financing a Tiny House a Viable Path to Financial Freedom for You?

  1. alice h

    Financing might work for some people, definitely not for me. The big problem with having a gorgeous tiny house with “affordable” monthly payments is that you still need to either pay for your own land, rent a spot or hide out in somebody else’s yard. The New York apartment comes with it’s own spot and has access to more employment opportunities and car free living. You need to add up all your living expenses and income needed and do the math to see if it works for you.

    A free tiny house spot in a friend or relative’s city yard might work but isn’t always legal so long term plans might not work out. If you buy land you’re going to end up either paying a lot or being a lot further from employment, probably needing a car. There are other limits on what you can do, even on your own land, so the pool of available land is limited by that as well as price and location. Finding a place to put your tiny house is probably as big a barrier as price of the actual house right now.

    If you already have a good cheap or free long term spot or have lots of income then payments like that aren’t too bad. On top of a lot of other expenses and limited income is another story.

    Reply
  2. Benny Troves

    Big city living had it’s rise to fame last century and now people are realizing it doesn’t work as well as it did in the past. Sure there are more JOB (Just Over Broke) opportunities in the city but then you working at something you don’t really love to pay for an apartment that really isn’t worth it.

    Tiny house living isn’t the be all end all of life but it gives people a different opportunity. An opportunity to cut costs, eliminate debt, and live burden free for a few years. During this time life is stress free and gives people a chance to get in touch with their passions that they want to contribute to society.

    Having billions of people work in jobs they don’t love doesn’t make our planet great. People following their passions makes Earth a wonderful place – we need more of that.

    Reply
  3. Marsha Cowan

    Wow! As exquisite as the Cyprus is, having built two tiny houses myself, I really think the price is about 3 times what it needs to be to pay overhead and payroll and still make about a 40% profit. As a former contractor of residential homes, And again having built two tiny houses (smaller than this, but same prices for materials), I would estimate that a house this size for a crew would take about three weeks to complete, and about $15,000 to $20,000 at best in materials, labor, and finishing appliances, so pricing it at around $40,000 to $50,000 would probably be a 50% profit. Even then, financing a tiny house at that price would be much like Alice said earlier– very risky because of all the other financial factors at play here, not the least paying for land somewhere on which to rest the tiny house. Imagine taking payments of $400-500 per month for a house, and not being able to live in it! Yikes! I would save money and do as much building as I could myself, paying cash here and there to get some of the work contracted out so that when it was done, it was also paid for. Invest in a workshop (preferably one that does not promote buying their houses). If one could find other like minded people in their area who wanted to build their own tiny houses, one could form a building coop of no more than three parties and build each other’s houses, staying on the same phase on each house as you go along, so that you all finish about the same time, and even then, each of you can pay to contract out electricity and plumbing, etc. if you wanted to. I say build your own and not go in debt with a loan! It defeats the purpose of most people in owning a tiny house. The best things in life are worth waiting for, and/or building yourself.

    Reply
  4. Ruth Vallejos

    I concur with Alice… where the jobs are doesn’t seem to line up with where the parking spots are. And where zoning allows a mobile home.

    It almost seems as if the house is the least of it. I can’t believe I said that. I’m an architect. But it all starts from the land and the lifestyle you want.

    Do you have a job you love? Is it in one location? Do you want to live near family? Can you find any land within a reasonable drive that allows a structure like this that you can afford. (The answer, for me, no – not without finding a job someplace else and living out of reach of family.)

    And where is the land… out in the boonies? In a mobile home park? In somebody’s back yard? Does this agree with your lifestyle goals?

    I would love more discussions about land: finding it, developing it (if necessary), pros & cons & hidden problems. How do you find a quality mobile home park? What is it like to live on 2 acres 50 miles from town? The house is the home, but a home is an outgrowth of the land it occupies.

    Reply
  5. DownSized

    The question of financing a tiny house as viable path to financial freedom would depend on the products – both financial lending and builder developer. Financial lending products for tiny houses are limited for reasons of more traditional roadblocks like, insurance and classification. TH builders vary from affordable DIY to high profit commercial builds. Financial freedom then depends on your wealth or economic class as well as your ultimate budget and goal. Builders have a financial interest in profits ratios to find a balance of design and materials to meet the needs of their individual markets. The banking industry is limited in lending products designed to meet the need of smaller micro loans. Having abandoned the lower class models to predatory financing of the likes we see in ‘pay day’ operations that target the lower income neighborhoods. Developers on the other hand have little incentive to support alternative housing aside from what they can garnish in financing from tax subsidies. Builders also have to turn a profit and have inherent costs associated with expenses. A person of wealth or financial means might find financing a practical path to financial freedom for the obvious reason that many more doors are open to them, while an individual with far fewer financial means including income may view the loan as impractical debt due in large part to excessive usury applied. The media’s interest is reflected in captions often underscoring tiny houses has “mortgage free” or “debt free”. There seems to be room for alternative houses and alternative financial paths. Some are pushing the envelope to commercial profit while others explore affordability with extreme economy. We have room for both and it remains a choice – to our own viable path to financial freedom.

    Reply

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