Would you ever consider living in a home that is less than 600 total square feet? Maybe you should. According to the National Associate of Home Builders, over half of Americans say they would consider living in a tiny house. While tiny houses certainly aren’t a new phenomenon, they’ve quickly grown in popularity. Since living through the recession, many homeowners are looking to “recession-proof” their lives, and tiny houses offer that possibility…along with a laundry list of benefits for your finances.
What Is A Tiny House?
From sheds to trailers, there isn’t a one-size-fits-all definition for tiny houses. Whether it’s on a movable or permanent foundation, most tiny houses are 400 square feet or smaller. In case you’re wondering, that’s approximately the size of an average master bedroom. Tiny houses aren’t big on space but are usually big on creativity and maximizing the small footprint. Most tiny homes have a living area, kitchen, bedroom area, and bathroom–although some are able to add additional elements like lofts and decks.
Less Credit Card Debt
The correlation between tiny house living and credit card debt may not be obvious at first, however, many tiny homeowners are experiencing substantially less credit card debt than those with traditionally sized homes. In fact, tiny house owners tend to have 89% less credit card debt than the average American, and 60% have no credit card debt whatsoever. The average American family carries a $5,700 credit card balance. What’s the connection between credit card debt and home size? Tiny house owners tend to value living within their means, some prefer to stay off the grid, and without a crippling mortgage, most have more breathing room in their monthly finances.
Little To No Mortgage Debt
In 2018, the mortgage debt for all of the US reached a staggering $8.94 trillion. Combined with suffocating student loan balances, many Americans find themselves drowning in debt. As home prices continue to rise post-crash, Americans are spending more to own a home. With the average home price sold in August 2019 of over $400,000, it puts homeownership out of reach for many. In contrast, the average tiny house sale price is just over $46,000…almost half of the standard 20% down payment for a $400,000 home. With the tiny house trend, people are foregoing using that $46,000 for a down payment and choosing to purchase a tiny home free and clear instead. In fact, 68% of tiny house owners do not have a mortgage at all!
Potential For Passive Income
For those tiny house owners that are looking to capitalize on two dominating trends, tiny houses and Airbnb could be a financial windfall for some. Owners looking to create potential income can also rent their tiny houses on Airbnb, VRBO, and similar sites. Tiny houses offer travelers a unique lodging experience while also providing income for owners. If owners are looking to create a nest egg, a recession-proof lifestyle, or supplemental income, tiny houses might just be a great option for them.
While tiny homes might not be for everyone, anyone can see that a mortgage and debt-free life with the potential for passive income is huge–especially if they lived through the crash. Tiny houses come in all shapes and sizes, but they can all offer tremendous financial benefits! To start your tiny house search, visit Homes.com!