Today's conversation is on tiny home sites. We have identified 3 ways that you could live tiny, but if you know of or think of others, please share.
Rent - this is the basic type of site where someone owns the property and you rent space to park and live in your tiny home.
- The key advantage is a tiny homeowner's startup costs are low because the property owner has invested everything into making the site ready for you.
- You are not locked into your site and can leave when your rent period expires.
- Typically, the rent costs are high because the property owner needs to recover the costs to buy the property, plus make any improvements for a tiny home renter, plus make a profit.
- The continued use of the site is not guaranteed, as whenever your rent renews, the owner could choose not to renew.
- There are no "rent controls" governing the treatment of tiny home renters, so your rent could increase when it renews.
- Monthly rents can cost $500+ and may require the renter to pay additional costs like utilities, maintenance, etc.
Own - this is what most tiny homeowners have done to date, as other options are limited so far. Basically, a tiny homeowner buys a rural building lot, prepares the site to live tiny on it and then moves their tiny home onto the lot.
- You own the property so are in control of what is done to the property and how close your neighbors are.
- You have continued use of your property.
- You pay no rent, but you do pay property tax. While it is not a current situation, we expect that municipalities over time will develop a minimum property tax which will apply to tiny homes. We expect this will become the norm, as municipalities will still need to provide the services they do to there property owners
- High startup costs. You must buy the property and pay to have whatever services you want to be installed. This can include septic, electricity, water (well drilled), gas (connection if possible or tank rentals), driveway and site preparation to park your tiny home.
- You will have to arrange any permits which may affect your ability to live on your property year-round, or hope no neighbor reports you if you decide to live on it without approval.
- If you want to (or must, for work or family) move in the future, you will need to either sell your tiny home with your property (what many people are doing today) or find a buyer with a tiny home that wants to buy your lot with the improvements you've made.
- If you cannot find a willing buyer when you want to sell, you may be stuck owning multiple sites or selling at a loss.
- Startup costs can include the following:
- Property purchase price: $20,000 - $65,000+
If you do not have the funds to pay the complete purchase price, expect that you may have to have a down payment of 50%.
- Lawyer fees: $1,500+
- Land transfer fees: up to 3% of the property purchase price
- Hydro connection: $2,500+
- Septic System: $10,000+
- Well: $5,000+
- Permits & fees: $500+
- Property taxes: $100+/month
Cooperative - this is a newer concept the Tiny Town Association is working to establish for tiny homeowners. Basically, you become a member of a tiny home cooperative that owns multiple tiny home sites.
- You have the permanency of being a member of the cooperative, so you can settle on your site, knowing the coop owns it and you will not be forced to move, unlike renting.
- The coop develops and operates the sites, so the rent is based on operating costs and not making a profit. This is expected to keep rents to a minimum, unlike renting.
- You can move within the coop from site to site, or to other coop owned sites in other towns, maintaining your coop membership, unlike owning.
- You can sell your coop membership back to the coop should you no longer wish to live on a site, which is much easier than selling a property you own.
- Startup costs will be more than renting, but less than owning your own property as costs will be shared among many sites instead of covered by yourself.
- If you own a tiny home on wheels (THOW) you are not locked into owning a piece of property, or at the mercy of a landowner. In a coop, you are a part owner.
- You do not own the property and upon the sale of your membership back to the coop, you can only expect to recover your initial costs. This is unlike ownership where you may be able to recover your cost, and possibly some appreciation in the property value.
- You could only move to other sites available within the coop.
- You have a higher startup cost in joining the coop, then renting a site.
- Cooperative membership: $25,000 (TTA target)
- Monthly rent including utilities: $250 (TTA target)
We see the coop as it develops as the ideal model for tiny homeowners. You have the security of being a member/owner without the restriction of being locked to 1-location. As more coop-sites open up, you will be able to move from one host town to another to meet your lifestyle needs.