Do tiny homes appreciate in value?
Source: Redd/UnSplash

Do Tiny Homes Appreciate in Value?

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Oct. 8 2021, Published 3:05 p.m. ET

When you buy a home, even a tiny one, you have to consider a few different things, such as the cost of living, and how eco-friendly or energy-efficient that home is. You also need to consider what that home might be worth if you were ever to resell it. People assume that because a house is tiny, its resale value couldn’t possibly be higher than what was initially paid for it, but is that merely an unfair stigma or actual fact? Do tiny homes appreciate in value or lose value over time?

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Do tiny homes appreciate in value?

The unfortunate truth is that tiny homes don’t really hold their value well. According to All About Tiny Houses, the value of tiny homes is more akin to mobile homes and cars than it is to conventional houses. These homes depreciate just as fast as cars, double wides, and RVs, and tiny homes that are built on wheels tend to depreciate at a faster rate than those that are stationary, according to Ramsey Solutions.

The only way to keep this from happening is to ensure that you keep your tiny home in peak condition, though inclement weather, heat, time, and normal wear and tear make this a daunting prospect, to say the least. Nevertheless, All About Tiny Houses suggests that a tiny house might also appreciate value if there happens to be high demand for it. This example compares tiny homes to collectible cars, but many tiny homes are custom-built and tailored specifically to the owners’ preferences.

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Those designed by professionals don’t generally meet this “collectible” criteria — at least not yet anyway. Time may yet tell how sought-after these tiny homes will be in the coming years, especially as the movement is gaining in popularity.

Interior of a tiny home
Source: Andrea Davis/UnSplash
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Do tiny homes have any resale value?

According to Ramsey Solutions, tiny houses have an average resale value of about $60,000, but the resale value of a tiny home is based on how many buyers there are for that particular home. As most of these homes are customized, reselling is going to lean heavily on how well you end up selling the new buyers on the style and customizations you chose in the first place.

If they aren’t looking for a specific tiny home, they probably won’t have interest, and they certainly won’t be looking to spend what you spent to build it to your personal style. In the end, they might just want to save the money to spend on their own customized tiny home instead.

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Tiny home in a woodland location
Source: Nachelle Nocom/UnSplash

Why do tiny homes lose value?

Many people consider tiny homes to be vehicles, especially if they are mobile tiny homes, which means they lose value for the same reasons that vehicles lose value. Time, wear, and location can all affect how valuable your tiny home has become. Mobile tiny homes take as much of a beating as RVs do and according to All About Tiny Homes, banks treat them the same way in terms of how they hold their value.

According to Tiny House Talk, it’s the land, not the structures that retain their value, but that is no guarantee either. Property values fluctuate all the time. For example, if you’re selling a tiny home built into a foundation, and the value of that land that it sits upon is higher at the time, you’ll make some money when you sell your tiny home. If the real estate market is down, the land might not be worth as much, and as we’ve seen, your tiny house will definitely have lost value too.

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