Are Tiny Houses a “good investment”?
- Feb 19
- 2 min read
“I’m not buying a Tiny House because my financial advisor said it’s a bad investment”.
UGH.
This is a line we’ve actually heard from TWO different prospective buyers in the past month.
In fairness, financial advisors are trained in traditional investment strategies- which they would have learned LONG before Tiny Houses became a thing here in Australia.
But times have changed.
You can’t think of a Tiny House the same way as a traditional home.
Where a regular house grows in value based on the land it’s sited on- a Tiny House is on wheels and independent of any land.
So yes, like caravans or other depreciating assets, the resale value of your Tiny House will decrease over time.
But here’s the thing- you don’t buy a Tiny House and sit on it for 20 years hoping it will double in value.
You buy a Tiny House to reduce your overheads.
The simple fact is, living in a Tiny House is INCREDIBLY cheap. As a single mum myself, there’s no way I could afford to rent a house right now on one income in the pricey area I live, in the current Australian housing market.
But living in a Tiny House for 7 years has kept my expenses so low that I’ve been able to achieve two key things:
1) lifestyle- it’s a slower way of living that’s completely transformed my mental health, and means I’m not stuck in hustle mode to make ends meet.
2) financial growth- not having exorbitant rent means I have disposable income for the first time in my adult life. I’m able to grow my savings and investments, that will see me get ahead of my peers come retirement.
Tiny House life is a smart financial move and is a viable option for those of us for whom traditional home ownership and a mortgage are not possible or desirable.
It keeps more money in your pocket you can access right away, and if you use it in a smart way, it’s possible your investments could end up worth similar to that bricks and mortar house anyway, even with all its capital growth.
And with the Tiny, you’re not slugging your guts out to pay for a mortgage, or going without to make ends meet like many homeowners currently are.
It’s time for a perspective shift.
Nervous to find land for the TWO tiny homes we plan to start building by the end of the year, but taking the leap of faith-$700wk for rent is just killing us. The thought of financial freedom and a more inlined way of living feels energizing! No one will tell me I can't have a roof over our heads! praise god for the help of Park My Tiny House (soon!)
I would make the following observations:
Most western governments are broke, which means land taxes will only continue to increase, taxes that you don't pay with a tiny home. Whilst traditional homes may attract capital gains, a traditional home is a liability from a maintenance point of view and only turns into an investment when you sell it. The cost of stamp duty in insane !.... a tax on tax. So when will council rates begin to decline ?..... which of course tiny homes are not subject to.
With regard to the comment below, many , many shires are now allowing tiny homes and if I'm not mistaken, the entire state of Western Australia ?
Cheers
Phil Taylor
sounds great, but where can you place a tiny house for 7 years? what percentage of councils will allow these dwellings? which councils will allow these dwellings? I believe many are still put off purchasing these type homes because of fear they will be moving from site to site constantly.