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Are You Financially Ready To Buy A Tiny House? 4 Ways to Get the Best Loan for Your Tiny House

Fortunately, there are multiple ways to get financing and save up for your tiny house, whether it’s a turnkey RVIA certified Tiny House on Wheels or a DIY shell or frame.

Choosing the Best Tiny House for You

Tiny Houses on Wheels Vs. Tiny or Small Houses on Foundations

Before we talk about the best way to finance your tiny house, let’s talk about the different types of tiny houses. Please note that securing finance for your tiny house will have different processes depending upon if your tiny house is on wheels or on a foundation. Permanently-affixed tiny houses will be able to get traditional construction loans which can include site work. For this article, we will be focusing on financing a tiny house on wheels.

tiny home brodie mobile office studio The Brodie Mobile Office photographed by Steph Rapsiarda

Tiny House on Wheels: Price Difference Between Original or Off-The-Shelf Design

Building a tiny house of your original design through B&B allows you to create the exact tiny house that you’re envisioning, but due to economies of scalei.e. custom houses taking longer to build due to the fact that each one is unique and not able to be mass produced— this option can be quite costly. The second option is to buy a pre-designed tiny house. There is a wide variety of options and at B&B we will allow you to customize materials, colors, and appliances (click here for all of the customizable options at B&B). This is a great option for those that want to stay on budget and still put their personal touch on their tiny house.

tiny home new england tiny shellDIY Tiny House Frame

Build Your Own Tiny House Using a Shell or Frame Kit

The third option is to buy a wood-framed tiny house shell. A tiny house shell has the exterior complete and the interior incomplete. Shells can have windows, doors, plumbing, and electric complete or incomplete depending upon your needs and budget. Lastly, you have the option to buy a steel frame kit for your tiny house. This option ensures that you have a professionally built frame and allows you to customize your tiny house how you please; however, we do not recommend DIY options for anyone that does not have construction experience.  The shell and steel frame option are not certified by RVIA, meaning that it would be more difficult to get a loan. Both of these last two options can be a great choice for someone that wants to complete their tiny house by themselves or wants to self-finance their own tiny house in stages. The RVIA cannot certify shell or frame kit options because the tiny house will not have been finished in a RVIA certified location; however, it may be possible to get a personal loan for the shell or frame kit.  

If you are DIYing your tiny house, consider all the costs associated with building, not just the materials cost.

Are You Financially Ready To Own A Tiny House?

Consider Your Total Tiny House Cost– Not Just Monthly Loan Payments

Once you have decided on the best tiny house option for you, you will have a better idea of the loan you will need.  Because B&B is RVIA certified, you would be qualified to apply for an RV loan for any of our turnkey tiny houses on wheels. When determining your tiny house budget, you will also need to consider monthly costs such as electricity, maintenance, insurance, and where you will be keeping your tiny house.

Read our article on the all-in costs of a tiny house versus a traditional house. 

In addition, if you need site work–grading, clearing trees, adding a pad–or infrastructure–fresh water, waste water, and power–you’ll need to consider these costs in your total budget. You will want to estimate these costs before you decide the amount of the loan you’re willing to take out. Just like a home mortgage, your income, credit score, market factors, and down payment will all affect the terms of your loan. After you’re pre-approved, B&B will schedule a design session with you in order to get your final quote.  

tiny home brodie mobile office studio

 The Brodie Mobile Office photographed by Steph Rapsiarda

4 Ways to Get the Best Loan for Your Tiny House

Improve Your Credit Score 

Improving your credit score will help you lower your monthly payment. This is because the bank views those with higher credit scores as being more reliable and thus will give them better rates and bigger loans.  Here are 11 ways to improve your credit score.

Save for Your Down Payment

The more that you save for your down payment, then the lower your monthly payment will be, so start adding to your tiny house piggy bank!

Choose the Best Tiny House Type For You, then Choose Your Floor Plan

After you’ve chosen the best type of tiny house for your needs, whether it’s a DIY frame, shell, or a turnkey tiny house that’s move-in ready (and RVIA-certified), you’ll be able to get an estimate on the floor plan you want and start researching your loan options.

Shop Around

It’s a good idea to contact a few different financial institutions to get the best deal for you.  Check out all your tiny house financing options here including getting a Tiny House Loan through Adams Community Bank, an RV loan through Lightstream, and a personal loan through your own bank or credit union.

How to Make Money by Renting Out Your Tiny Home

With New England’s quintessential towns and breathtaking scenery, it’s no surprise that many of our tiny home owners use the area as a second home for weekend retreats. Because these homes often sit vacant, owners will often rent out their tiny homes in order to share the tiny home lifestyle with newcomers and make additional income. The best part of renting your tiny house to others is that it’s easier than you would think!

How to Earn Extra Income with Your Tiny Home

If you’re thinking about turning your tiny home into an investment, then you’re surely asking yourself a lot of questions. How do I pick the best location? How do I find customers and manage my property? How do I ensure I make a profit? Don’t fret, we’ve got you covered.

Picking the Best Location

When determining where to place your tiny home, think about your future customers and what their needs are. Are the customers you’re trying to reach looking for a place to stay while they hike New England’s serene mountains or are they seeking the comfort of being close to some of New England’s most memorable towns? The best way to figure this out is through research and talking with members of the community that you’re interested in. The local inhabitants will know the most about the types of tourists that their town receives. In addition, growing your network and connections with the local community is a great way to help spread the word about your tiny home.

In order to find land after you already have an area in mind, you can use websites like Zillow or Landwatch to see available listings, but it may be worth it to contact a real estate agent. Like the local inhabitants, real estate agents will be able to give you the inside scoop of particular areas and tell you which areas they think will make the most lucrative investment.

But is it legal?

Unfortunately, there is no clear-cut answer to this question as it depends on the town’s zoning bylaws. The good news is that it is relatively easy to find out if you can have a tiny home in a certain area by checking the town’s online building code or by simply giving the town hall a call. Click here to learn more about finding out where it’s legal to have tiny homes. tiny home kitchen new england

Finding Customers for your Tiny Home

Get Connected and Engage

Just as it is important to get connected with the local community when finding a property, it’s as equally important when attracting customers. Word of mouth is a great way to attract customers. Another great way to become connected is by establishing partnerships with local businesses. For example, you may establish a partnership with a local outdoors shop where you agree to leave coupons for the shop on the bulletin board in your tiny home for guests to see in exchange for a standup ad poster in their store. Also, use social media to develop interest in your tiny homes. Encourage guests to share pictures of their experience in your tiny home. Allow others to see the magnificent time past customers have had in your tiny home!

Use Third Party Platforms

Websites like Airbnb, VRBO, FlipKey, and Homeaway are another great way to find potential customers. Try It Tiny is a tiny house-specific website for renters, landowners, and tiny house owners looking to rent out their houses.  What’s great about these platforms is that you don’t need to do anything besides build your online profile; the customers will come directly to you!

tiny homes bedroom b&b micromanufacturing

Maximizing Your Profit

It’s apparent that the quality and location of your tiny home are some of the driving factors that determine the price you are able to charge customers, but there are even more factors affecting the price and therefore interest of customers in your property. Below are some of the other most important factors.

Amenities and Competition

Amenities such as the size of the kitchen, wifi connectivity, or an outdoor sports court help determine the price that you are able to charge. In addition, it is important to analyze your competition to see what they offer and at what price. It is also just as important to make sure that you offer something that your competition does not–what makes your tiny home extra special? Is it the views from the property, the outdoor grilling area, or the luxurious fixtures?

Make Hospitality a Priority

Sites like Airbnb allow customers to give reviews to their hosts. These ratings are out of five stars and visible to all prospective customers. Low ratings will certainly deter prospective clients; likewise, high ratings with personalized experiences allow you to build trust with future customers. High ratings with personalized experiences are made through experiences that humanize the lodging experience. What will your customer remember about their experience? Was it your useful advice of things to do in the area, the complimentary welcome basket with a handwritten note, or your high level of responsiveness to your guests questions? Click here to learn more about how to be the best AirBnB host. 

tiny home investment additional income New England

Becoming an Entrepreneur

Now that you know more about the mechanics behind turning your tiny home into an investment, you’re one step closer to becoming an entrepreneur! Reporting to yourself and being able to make the decisions that impact your investment can be a very exciting opportunity. So, what are you waiting for?

 

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B&B Open House: Tour a Tiny House and a Tiny Studio, Eat Cookies, Visit the Museum of Dog!

We are excited to announce we will be opening our tiny houses to the public for tours on May 19 from 1-4pm. In addition to touring the Stony Ledge Tiny House and the Brodie Tiny Office/Guest House/Studio, you will be able to see the new parklet we’ve built for the City of North Adams’ Eagle Street Project, purchase sweets from Mountain Girl Farm (they will have cookies for humans and cookies for canines!) and take a $5 tour of our new neighbor, the Museum of Dog.

The tiny open house will be at Windsor Mill, 121 Union St (Route 2) in North Adams, MA— your GPS will take you to the front entrance, but our tiny houses will be in the lot around the left side of the building on Canal Street, right across from the Museum of Dog.

If you’ll be coming from out of town, round out your day by visiting MASS MoCA down the street, taking a hike at Natural Bridge State Park (Massachusetts)or attend the evening Gala at IS183 Art School of the BerkshiresNorth Adams is a wonderful place to visit!

Why Do Tiny Houses Cost More Per Square Foot?

Tiny Houses Are Smaller, But Cost More Per Square Foot.  Why?

Glad you asked! In larger houses, the lower cost per square foot is because large homes have a lot of empty space, which brings the average cost per square foot down.  The most expensive areas of a home are the bathroom and kitchen: the rooms with appliances and special fixtures.  Just like big houses, tiny houses still have at least one toilet, one shower or tub, one fridge, one stove or cooktop, and one kitchen sink, so you still have to pay for those appliances.   (If your tiny house is 1/3 the size of a big house, the cost may not be 1/3 because you’re not paying for 1/3 of a toilet– you still need a whole toilet!)  In tiny houses, everything is efficiently packed into a smaller footprint, eliminating the empty floor space– the cheapest part of a big house.

In addition, tiny house designers and builders have very special skills, and there is much less room for error in constructing a tiny house than in constructing a big house.  Because there is less tolerance for error in tiny houses, due to their small size as well as strict  building standards ensuring they are safe to travel on the road, more care has to be put into their design and construction.

B&B Micro Manufacturing’s move-in ready tiny houses on wheels are built to the high standards of Recreational Vehicle Industry Association (RVIA), who inspect every step of our build process in surprise visits.  Each turnkey tiny house we build is RVIA-certified.  (Tiny house shells cannot be RVIA certified because DIY builders aren’t inspected by the RVIA).

What do tiny houses have that larger houses don’t have?

Many tiny houses have built-in furniture which is not included in the cost of an empty larger house.  Additionally, some tiny houses use specialty appliances that were designed for boats or RVs, like small stoves, which, although they are smaller cost more than regular-size appliances because they are not sold in the mass quantities regular-size ones are.  

What’s the cost of having a custom designed tiny house built versus a pre-designed tiny house?

Due to economies of scale, any tiny house that is custom-designed will, of course, cost more than a tiny house that is made in a production line with the same model of other tiny houses.  B&B has quite a few floor plans to choose from for every lifestyle, and each floor plan is customizable for the individual’s needs.

Does it cost more or less overall to build a tiny house versus a big house?

Still, the total cost of building a new-construction tiny houses is, of course, much lower than the cost of having a new big house built.

Likewise, it costs much less over time to pay bills for a tiny house.  Heating and cooling a tiny house is more energy-efficient by nature of the space being small.  In addition, B&B manufactures all their houses to be extremely energy efficient, whether on- or off-grid, reducing the overall cost of bills over time.

Still have questions about our tiny houses?  We’d love to help!  Contact us at info@bbtinyhouses.com.