TINY IN STATURE, ENORMOUS IN APPEAL

Tiny homes are a hot topic in the Australian property market, making headlines for a minimalist lifestyle and quirky appeal. Have you ever searched #tinyhome on Instagram? The variety is huge and they look awesome!

In the world of tiny houses, sophisticated details and edgy décor ideas are in abundance. Tiny homes have creative out-of-the-box solutions and are cosy, playful and fully functional.

Aside from looking Instagram-worthy, tiny houses are also a marvel in space-efficient design. Fullsized kitchens, free-standing bathtubs, swimming pools and courtyards may all be found in a space that’s smaller than many a living room.

Part of a world-wide movement towards compact, minimalist living, they are also seen as part of the affordable housing solution popularised through shows like Grand Designs, the Tiny House Nation American reality TV series and the UK’s Escape To The Country.

WHY HAVE TINY HOUSES BECOME MORE POPULAR?

While official stats are hard to find, it appears that tiny homes have surged in popularity in Australia since 2017 as a first home, a secondary dwelling for a family member or as an additional source of income.

In the US, tiny homes were first talked about in the 80s and the 90s, but attention really peaked after the 2009 housing crisis there.

Is buying a tiny house worth It? First, ask why you are buying.

/ To live in yourself - because you want to cut costs or the minimalist lifestyle appeals.

/ To offer it as short-term rental on sites like Airbnb. Be aware that state legislations have specific planning laws for holiday letting.

/ To offer as long-term rental, which may appeal to tenants on a tight household budget.

/ To buy, fit out with the features and amenities, and flip.

Is a tiny home a good investment?

Pros

The more affordable entry price will appeal to renters and buyers. (Location is a factor here.)

Likely to cost less to run… self-sufficient, use of solar panels etc.

Fewer and simpler issues to deal with e.g. plumbing, electrical, walls, floors etc.

Many can be moved anywhere so more freedom on location for owners and buyers.

Smaller investment outlay frees up money to invest in more tiny homes or pursue other avenues of investment.

Cons

The tiny house landscape is still relatively new. There may be legal and regulatory frustrations to deal with to comply with state and local laws and building codes. For instance, a tiny home with wheels will be legally classed and regulated as a caravan in many Australian jurisdictions.

Will the tiny house movement last? Will they disappear from our TV screens and reality shows?

There may be more hands-on management if it’s in your own backyard. Getting finance for a tiny home might be more difficult.

It’s said that tiny houses tend to depreciate in value. This has less to do with size than, as per property in general, it is the land that gains value over time, not the structure. Where a tiny house is legally classified as a caravan, tax depreciation schedules will adhere to rules and regulations relating to caravans.

By The Figures

From a lock-up tiny house to a complete turnkey lock-up, the estimated cost can vary from *$60,000 to *$140,000.

Low purchase cost tends to equate to higher rental yields. For example, you buy your tiny house for $80,000 and rent it out 30 nights per year at $150 each time, your gross rental yield will be 5.6%.

Compare this to buying a house for $500,000, renting it out for $390 a week, and getting a gross yield of 4.1%.

*All figures are ‘guestimates’

Typical tiny home buyers: Do you fit one of these profiles?

/ A seeker of financial freedom.

/ A downsizer.

/ Homeowner who wants a secondary dwelling.

/ Elderly person living on their own.

/ Someone who wants to live a sustainable lifestyle.

/ Renters who want their own home but can’t afford a big mortgage.

/ An investor looking to supplement their income with a holiday rental.

WHY BUY WHEN YOU CAN TRY?

There are thousands of gorgeous tiny homes in amazing locations all over this country.