Tiny House Finance : An Overview

Tiny House Finance – let’s break it down!

With standard house prices becoming increasingly expensive, it’s no surprise that more and more Australians are turning to the ‘Tiny House’ as a downsizing option, embracing the uncomplicated lifestyle it brings and as a solution to providing more financial freedom. But how much does a Tiny House really cost and how can they be financed?

What is a Tiny House?

At LJM Tiny Homes, all of our Tiny Homes are built on trailers with wheels, within the dimensions of a standard caravan. This is so that they can be classified as temporary structures, which means they don’t have to comply with the minimum housing sizes stipulated by council regulations. By building Tiny Houses on wheels, they are able to be transported legally on the roads.

Despite that, there is no standard definition of what a Tiny House ‘is’ in Australia. They do vary in size, design and cost.

How much does a Tiny House Cost?

The cost of a Tiny House will vary depending on several factors including size, materials and inclusions but also the company you choose to build your Tiny House with and where you hope to park it!

That’s why it’s important to have a clear understanding of all of the associated costs before embarking on your Tiny House Journey.

Typically, costs include ;

• CONSTRUCTION The cost of building your tiny house can range from a few thousand to tens of thousands of dollars, depending on whether you choose to build it yourself or hire professionals.
• LOCK-UP VS TURN-KEY A Tiny House built to lock-up stage is fully-finished externally and waterproofed with customised window selection and external cladding. Internally, the lofts and internal walls are completed including a cavity slider door. The internal frames are left open so that you can finish your build from here. A Tiny House built to turn-key stage is fully finished as far as it can be built within the factory. Turn-key stage will still require some on site responsibilities including on-site preparation, curtains and blinds, furnishings etc. Choosing to build to lock-up or turn-key will change the cost substantially!
• DESIGN: The Tiny House design that you opt for will determine its overall cost. You may opt for a smaller, more basic design such as the 6m TeaTree design with LJM Tiny Homes which starts at $57,500 to Lock-Up stage. Alternatively, you may be looking at more of a complete build such as the Mt Tinbeerwah Double Loft built to Turn-Key, starting at $121,500 for a 7.2m build. Whatever design that you opt for, it’s important to understand all of the inclusions that you may want including additional extra’s such as solar panels and off-grid solutions, air conditioning and window upgrades. Dream big and you can always remove some specifications to meet your budget.
• LAND: If you plan to place your tiny house on a piece of land, you’ll need to factor in land repayment costs or rental costs for land. This can vary significantly based on location, zoning regulations, and proximity to amenities.
• DELIVERY : Tiny Houses on wheels must be towed from where they are built to their final destination. Understanding the delivery costs from the factory to your site is important when evaluating your overall budget.
• UTILITIES: Connecting your tiny house to water, electricity, and sewage systems may require additional expenses, so it’s essential to consider these costs in your budget.
• SITE PREPARATION: Not to be taken lightly! It’s important to factor in the finances involved with preparing the site appropriately for the Tiny House. The site must be prepared appropriately in order to ensure the longevity of your Tiny House build.

Your Tiny House builder will be able to provide you with a thorough breakdown of these costs, depending on your personal requirements.

Now that you have a grasp of the potential costs involved with building and owning a Tiny House on Wheels, let’s explore financing options that might be available to you.

As Tiny Houses on Wheels are legally classified as ‘Caravan’s – a traditional home loan is not typically an option. Below are some ways you may be able to finance your Tiny House ;

• Personal Savings: Many individuals fund their tiny house projects using personal savings. If you’ve been diligently saving, this could be a viable option to avoid interest payments and debt.
• Personal Loans: Taking out a personal loan is another common method of financing a tiny house. It provides the flexibility to use the funds as needed, but interest rates and terms can vary, so thorough research is essential.
• Specialised Tiny House Loans: Some financial institutions offer loans specifically tailored to tiny house construction or purchase. These loans may have more favourable terms for those pursuing the tiny house lifestyle.

Top Tips for Tiny House Financing Success

• Create a Detailed Budget: Develop a comprehensive budget that includes all potential costs, from construction and land to delivery and utilities. This will give you a realistic overview of your financial needs.
• Research Zoning Laws: Before purchasing land, ensure it complies with local zoning regulations. Some areas may have restrictions on where tiny houses can be placed, affecting your overall costs and plans.
• Build a Solid Credit History: If you plan to take out a loan, having a strong credit history can significantly impact your ability to secure favourable terms and interest rates.
• Reach out to the experts: We have partnered with Great Escape Finance who can give you an accurate understanding of your borrowing power and the best way to finance your Tiny Home.

Embarking on the journey of tiny house living in Australia requires careful consideration of both your lifestyle goals and financial capacity. By understanding the costs involved, exploring various financing options, and following these tips, you can navigate the world of tiny house finance with confidence. As the tiny house movement continues to grow, more financial resources and opportunities may emerge, making this dream of sustainable, minimalist living more accessible to Australians.