Tiny House Depreciation: Helpful Examples You Should Know

The value of real estate is in a constant state of flux.  Knowing when a good time is to sell is only half the battle.  But, what does this mean for unique properties like tiny houses?

Like any home front, tiny houses go through depreciation as well.  Knowing the value of your tiny house and how it may change, can help you to protect yourself. See it as a challenge to keep your property fresh.  This way when the time does come to sell, you are in a better position. 

Here is everything you need to know about tiny house depreciation.

First, A Few Words About Home Depreciation

Houses often depreciate in value.

This means they will lose value. But this depends entirely on location! location! location!

When we are talking about depreciation for tiny houses we are talking about movable units. So the location does not come into play here. That means the scenario changes.

On the house itself, we often do design upgrades as well as renovations over time.  You then take the number that you spend over time on your home to see if it has increased or decreased the value.

Most people will change their homes for the better over time.  From ripping out old carpets building new features, all of this is done as a value increase.

Many homeowners don’t even know that may be increasing the value of their home.  Simple upgrades could be done to just please personal taste.  However, any work that is done to the home will change the value.

But, the value will not always change in your favor.

The amount of depreciation will also be reflected in outstanding loans.  For instance, if you had taken out a large loan in order to make major upgrades, you may not see a return.

Most people don’t think about home depreciation when purchasing their home.
However, the more you know about depreciation, the better you can prepare for the day you sell.

Tiny House Depreciation

One thing that is still new and relatively unexplored is tiny house depreciation.

This is because tiny houses are still a fairly new concept.  Many people who have taken up residence in tiny houses are still living there.

This means there isn’t a wealth of information when it comes to the changing value of tiny houses.

The size of your home does not make your house any less of a home.  This means that no matter if you’re living in a tiny house or a traditional house, depreciation is still a factor.

This is something to keep in mind when designing your dream tiny house.  How will your home age?  More importantly, is the cost of your tiny home renovations one that you may see a return on?

Are Tiny Houses a Good Investment?

One thing you need to ask yourself before purchasing a home is, are tiny houses a good investment?

Knowing what you are in for can help you make a smarter choice when it comes time to buy.  Most people don’t think about selling their home when first buying it.

However, the reality is most people don’t live in their home forever.  This is why it is so important to keep in mind how your house will hold up on the market over time.

So, are tiny houses a good investment?  There are a few things to consider when trying to figure out the return value of your tiny house.

Here are a few things to keep in mind:

1) What Is The Average Cost of a NEW Tiny House?

Before buying a tiny house it is so important to understand the market.  This way you can fully understand the value of the home before purchasing.  This way you can also know if what you are paying is within the average of what other people paid.  This can help to keep you from paying too much which will help your resale value in the future.

Depending on the size, style, and location, a tiny house can run anywhere from 15 thousand dollars to upwards of 75 thousand dollars.

It is also important to note that these are the prices for standard tiny houses.  Fully fitted luxury style tiny houses can run upwards of hundreds of thousands of dollars.

This means for a standard tiny house you can expect to spend an average of 30 thousand dollars.  However, if you are looking to build your own from the ground up, the price will be higher.

This is because you will need to purchase land, hire a designer and a contractor as well as pay for special permits.

2) Can You Purchase a USED Tiny House?

Another option to help keep the price tag low is to buy an already lived in a tiny house.

However, it is important to consider that tiny houses are still not widely known.  This means that depending on where you live, there may not be as many available.

However, in areas where tiny houses have become welcomes as the “norm”, there are some properties available.  Online listing agents are going to be a huge asset to you.  Online marketplaces are a great resource to see what is out there for tiny houses.

While you may not be able to find homes in your area, it will give you a better idea when it comes to resale.

Right now there are hundreds of tiny houses listen for sale.  However, only a handful of them is previously owned.  Most are new homes built by certified builders who have gone into the business of building and selling these unique homes.

The average price for a resale tiny house is 50 thousand dollars.  When you consider the average cost of a new home is 75 thousand, the resale value isn’t as high. Here are some tips for buying a tiny house.

How Do You Increase the Resale Value of Your Tiny House?

Try not to get discouraged by the average resale value of tiny houses.

There is a lot of factors to consider.  The main thing to note is that most of these tiny house sales do not include land.

This means that if you have a permanent tiny house that is on land, your value will be much higher.  This is because potential buyers will not only be purchasing the home but the land as well.

You should view the eventual resale of your tiny house as a challenge to get as much of a return as you can.

One misconception about real estate is that it is a fool-proof investment.  In reality, it takes a lot of work to make your home an actual investment.  The work that you put in can clearly be seen in dollar signs.

Here are some ways to help improve the overall resale value of your tiny house:

• Mindful Improvements

The old saying “you have to spend money to make money” is especially important for real estate.

No one wants to buy someone else mess.  On the same hand, you have to be careful to not wastefully spend money either.  You don’t want your precious tiny house turning into a money pit.  This is why it is so important to make sure that the improvements made to your home are mindful.

This means that the changes you make to your tiny home need to be an appeal to you but also to potential buyers.

The good news is, owning a tiny house is a great opportunity to use the creative side of your brain.  Future buyers are not looking for a project. 

Make sure to stay true to the space and make improvements that not only work in a limited space but are universally appealing.

• Supporting the Community:

People are looking for more than just a house.

They want a home.

The community that you live in is a direct extension of your home.  This is why it is so important to do your part to nourish the community.  While shopping local is one great way to invest in your community, there is so much more to be done.

Think of your community as an investment.  Try to take an active role in the planning and development of communities.  As a tiny house owner, you are already setting the trends for years to come.

So, why not showcase your style and creativity to your community as well.  Potential homeowners will find they not only have an amazing home to call their own but also a neighborhood to take pride in.

• Stay Ahead of “Smart” Trends:

Future homeowners are looking for convenience.  This is especially true when it comes to tiny houses.  There is already so much sacrifice when it comes to space.

So, smart tech can really elevate your home when it comes to sophistication and style.

What a tiny house lacks in size, it more than makes up for with sophistication.  Small changes like outlets that feature USB chargers are only the beginning.  However, in order to make your tiny house appealing, you need to stay on top of smart tech trends.

From there you can find creative ways to incorporate these trends into your home.

You should also read this guide on how to increase the value of your RV. There are many tips you can apply to a tiny house.

Why Does Your Home Lose Value?

There are many reasons why home properties lose value over time.  Many of these reasons are out of your control.  However, knowing why you may be using value can help you to better prepare.

This way you are able to take steps now to ensure that you can still walk away with a profit.

Here are some of the top reasons why your tiny house may be losing value:

1) Time Is Not Kind

The biggest nemesis as a homeowner you will have is time.  Things are not built the way they used to be.  Nowadays, properties are built to change and transform which doesn’t make them as solid.  This means that over time foundations sink, metals rust and paint fades.

Along with the structural integrity of a home, is the technological integrity.  While homes these days may be fitted with the newest smart tech, in ten years it may be obsolete. 

Tiny homes are now seen as unique and free, but who knows what the future holds.  While there is nothing you can do to stop time, you can try to stay ahead of the curve.

2) Fresh Look From The Outside

Curb appeal is a big part of selling a home.

It is a big part of why properties may be losing value.  Landscaping is a huge undertaking for any homeowner.  While tiny homes have less property, outdoor space is treated differently.  This is because tiny houses treat outdoor spaces as an extension of the home itself.

Lengthy landscaping jobs can do wonders when it comes to reselling your home.

But, is it worth it?

Aesthetic styles are constantly changing and what was once seen as “on-trend” might not speak to new buyers.  On the other side of the coin is yard work.  Yard spaces that have not been properly maintained are a huge turn off to potential buyers.

This is why it is so important to consider resale before taking on a large outdoor project.

3) Over Customization

Owning a home is much more than real estate freedom.  Along with having a place that is finally yours comes the chance to customize it.

However, it is also important to know whether or not these changes will benefit your property.  This is especially true when you consider money going out versus money coming.

While your expensive upgrade of a large closet in place of work-space might be perfect for you, the next owner may not feel the same.

This is why it is so important to think of the future when it comes to making structural changes to your home.  No home needs to consider this more than tiny houses.

The number one thing about tiny homes is that they need to utilize the space wisely.  You will rarely see tiny homes forgo living space for the vanity.  However, even small changes need to be done thoughtfully.

Future owners and loaners will appreciate that space can be utilized for a wide variety of families.

4) Neighborhood Changes

One thing that is out of your control when it comes to the value of your home is the neighborhood.  The neighborhood is one of the top things that future buyers will look at.

This is because most people who are looking to purchase a home are families.  This means that families will be looking at safety as well as the school qualities in your area.

These days it seems that most young families are looking for culture as opposed to comfort.  Problems like gentrification have changed the way people buy homes.  Neighborhoods that were once praised for their rich culture are being replaced by box stores.

While there isn’t much you can do about neighborhood changes, it is something to keep in mind.

5) State of the Economy

Home depreciation can sometimes be a losing game.

This is because the real estate market can be so unpredictable.  Economic changes in the market will directly affect the resale value of your tiny house.  However, there is some good news here.

When the prices of traditional homes are on the rise, potential buyers search for more unique homes.

Tiny houses are the perfect solution for these types of buyers.  Not only can they find homes well within budget, but they will be within the trend.  This means that what might be bad for traditional homeowners, may be perfect for you and your tiny house.

One thing to remember about real estate is that it works with supply and demand.  If there are not as many people in a position to buy, your house can sit on the market.

However, with a larger influx of people, you will get more views.  The good thing about owning a tiny house is that you have a slight edge on the competition.  Not only do you have price and value on your side, but you also have convenience.

Don’t Settle When it Comes to Value

While home depreciation is a major concern for homeowners, it doesn’t have to be filled with dread.

Understanding the value of your tiny house and how that value may increase will give you a leg up on the competition.  The good news is, there isn’t much competition for tiny houses on the market yet.

However, the trend shows us that this will soon change.

This gives you time to really think about how you can increase your value to ensure that your tiny house will be an investment.  But, to do this properly, you will have to prepare for the future.  While it is important to enjoy your home while you have it, don’t forget about who may own it next.

Being smart and frugal when it comes to changes to your home can make all the difference when it comes to home depreciation.

Good luck.

Everything in this world will at some time age.  This is especially true for home properties.

Reference Links: thenest.com,