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Rental Investors Take Interest in Tiny Homes

Tiny houses are not new, but COVID-19 and resultant lifestyle changes are making the movement more popular, according to IPX1031, a Fidelity National Financial Company blog, which conducted a survey of 2,000 Americans to understand how likely they would be to live in a tiny home. The researchers also looked into regions of the country with optimal tiny-home markets for both homebuyers and investors.

"Even though the micro home movement isn’t necessarily new, many have put tiny homes on their radar since COVID-19," note those who conducted the study.

Affordability was the top reason for survey respondents who answered that, yes, they would consider purchasing a tiny house (more than half).

65% cited affordability; 57% said "efficiency" would be a motivating factor; 48% said "eco-friendliness" would be a factor; and "living a minimalist lifestyle" rounded out the list of top tiny-house selling points. Also listed: Downsizing (36%), mobility (35%), and privacy (29%)

Among the respondents who have never owned a home, 86% said a tiny home could be a contender for their first home purchase.

What constitutes a tiny house? They can be on wheels or stationary (abut 54% of respondents said they would prefer the more-mobile option). They generally are less than 400 square feet and range in price from $30,000-$60,000 (whereas the average median price for a typical starter home is $233,400, according to the National Association of Realtors.

Half of those surveyed say they would spend less than $40,000 on a tiny home and 79% say they would be able to buy or finance a tiny home rather than a traditional starter home.

The low cost and maintenance mean tiny houses present an attractive opportunity to investors, according to the survey. Of the study participants, 72% said they would consider buying a tiny house as an investment property. Among them, 63% reportedly envision a long-term rental opportunity; 37% say they would see it as a short-term rental. On average, potential investors who responded to the survey said their ideal monthly rent would be $900 per month for a long-term rental and $145 per night for a short-term rental.

The study also revealed which states had the best markets/highest demand for tiny homes. Those included:

  1. Vermont
  2. New Hampshire
  3. Maine
  4. Wyoming
  5. Washington
  6. Idaho
  7. Montana
  8. Oregon
  9. Rhode Island
  10. Alaska

Read the study in full at ipx1031.com. 

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others.
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