Are tiny homes worth it? 21 reasons why they’re a huge mistake

Reality TV shows like "Tiny House, Big Living" and "Tiny House Nation" have popularized the notion of stripping one's lifestyle down to bare necessities to reduce living space to the absolute minimum needed to get by. Depending on which definition you use, a tiny home is one that's less than 400 to 600 square feet, but some tiny homes can be as little as 160 to 200 square feet.

All the hype surrounding tiny homes piques the interest of individuals looking for a financially and environmentally sustainable lifestyle. And at first glance, they're especially attractive to millennials. But in the case of tiny homes, what looks good on reality TV might be much less appealing in real life — especially if you have children.

Here's what you need to know about why buying or building a tiny house can actually be a huge mistake.

Why you shouldn't consider a tiny home
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Why you shouldn't consider a tiny home

1. Tiny Homes Are a Fad, Not a Trend

The difference between a trend and a fad is staying power — whereas trends endure and evolve, fads are met with wild enthusiasm for a short time, but then they fizzle. The tiny home movement might've sprung from the trend toward minimalism and experiential lifestyles, but many proponents dive in with without considering the significant challenges inherent in living in a tiny space only to upsize shortly after, which suggests tiny homes are a fad, not a trend. 

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2. Tiny Homes Are Expensive

Tiny homes' small size doesn't make them much cheaper to build — in fact, the typical tiny house costs more per square foot than larger houses do, in part because of economies of scale inherent in larger construction jobs makes for more efficient use of resources. Whereas the average 2,000-square-foot home costs about $150 per square foot to build, tiny homes constructed by Tumbleweed Tiny House Company, America's largest and one of the best known tiny house builders, average around $400 per square foot.

Find Out: The Cost of Renting vs. Buying a Tiny Home 

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3. It Might Be a Home, But It’s Probably Not a House

Most tiny homes are built on trailers, which makes most tiny homes RVs. In fact, the Tumbleweed Tiny House Company calls its products "tiny house RVs" and builds its homes according to the Recreational Vehicle Industry Association certification standards. No doubt, Tumbleweed and other manufacturers put out excellent products, but by their own definition, the typical products are RVs, not houses.

Click to see tiny homes you can afford

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4. A House — Even When Tiny — Must Build to Code

Tiny homes built on foundations typically must meet the same code requirements as any other house, but the cost might be disproportionate, and even prohibitive, with the tiny home if you're working with a bare-bones budget. You'll have to prepare the land for construction, pull permits, order inspections and perhaps pay to have to bring utility service to the site. 

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5. Many Tiny Homeowners Aren’t Tiny Home Dwellers

Tiny homeowners don't necessarily live in their homes — even some well-known ones who've created public personas as tiny-house proponents. Christopher Smith and Merete Mueller, for example, filmed their transition toward tiny-home living for the film "Tiny," but they never actually moved into the home, according to Often, these owners use their homes as vacation getaways or soon trade up for larger homes. The challenges that come with living in a tiny home aren't so challenging if you're only there a few nights a year.

Find out how one couple paid off $200,000 of debt by living in a tiny home

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6. There’s a Good Chance You’ll Regret It If You’re a Millennial

Of the more than 40 percent of homeowners who regret purchasing the size home they chose, 33 percent wish they'd bought a larger one, and just 9 percent wish they'd gone smaller, according to a Trulia survey. Homeowners age 18 to 34 are the most likely to feel that way — and they're also one of the demographics most drawn to tiny homes. 

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7. There’s No Space to Expand Your Family

A tiny home that works for a single individual might not work for a couple. And what works for a couple might not accommodate a baby and the equipment that goes along with having one. Even bringing a pet into the mix can overcrowd your tiny space.

If you don't plan ahead of time, your tiny home might come with surprise expenses

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8. Tiny Homes Limit Where You Can Live

Whereas some cities have loosened zoning restrictions to accommodate tiny homes, especially homes built on foundations, most cities don't allow tiny homes on wheels to be parked in residential yards or used as permanent residences. You'll have to research local codes and ordinances before you make any permanent decisions, or park your home in an RV park or manufactured home community.

Learn About: Tiny Home Communities for Eco-Lovers 

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9. It’s a Tough Way to Live

Tiny-home living takes a lot of work. You'll have to grocery shop more often, pick up mail from a post office box and do frequent small loads of laundry in a compact washing machine. You might also have to empty out a composting toilet, climb in and out of a sleeping loft, and grapple with multifunction furniture that needs to be opened or closed or folded and unfolded every time you use it, perhaps shortening its life from overuse. "Everything in our house is worked over more, used harder," wrote tiny homeowner Gene Tempest in his New York Times article, "What No One Ever Tells You About Tiny Homes." 

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10. Tiny Homes Aren’t Very Functional

What at first glance looks like a simple lifestyle can actually be rather chaotic. Tiny houses often have low ceilings and tight transition spaces that require residents to constantly duck and squeeze as they navigate their surroundings, prepare meals, take showers and climb into bed. Even eating takeout becomes a chore when you lack adequate dining space — a frequent regret among tiny homeowners.

Read: 20 Cheap Renovations That Increase Your Home's Value 

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11. The Cramped Space Might Be Bad for Your Mental Health

An overcrowded home has been linked to stress and anxiety in families, likely due to lack of privacy and disrupted sleep. Children might also find it difficult to locate a quiet place to read, study or play in such close quarters. 

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12. You’ll Need a Place to Put It

Unless you're allowed to park your tiny home in a friend or family member's backyard, you'll have to find a place to put it — and that costs money. You can purchase land if you have thousands of dollars in cash, or lease a lot, perhaps in an RV park or manufactured home community for several hundred dollars per month. Some states allow tiny home communities and co-ops where you can lease or purchase a lot.

Find Out: How to Finance a Manufactured Home 

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13. You Might Have to Buy Land

Even if zoning laws allow you to build or park a tiny home, you're not necessarily out of the woods. Those laws might also require that you own the lot, and they can mandate the minimum size of the lot your home sits on, making it an expensive proposition. Even in a town like Spur, Texas, which is openly friendly to tiny homes, lot sales the town promotes — with prices up to $42,000 --mostly have buildings that would need demolition, and you'd still have to excavate according to town specifications and construct a permanent foundation for the home to sit on. 

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14. It Might Not Be Legal

Tiny homes generally meet International Residential Code requirements the federal government uses to set minimum living area for residences, but state and local governments have their own building codes for homes built on permanent foundations. Permanent tiny homes often don't meet those standards. Tiny homes on wheels don't need to, but many localities restrict where you can park one.

Read: 10 Biggest Perks of Living in a Tiny Home 

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15. Tiny Homes Are Bad Investments

A tiny home built on a trailer isn't real estate, even if you own the land you park it on. It's personal property, and like other personal property, such as cars and RVs, it depreciates over time. Real estate, on the other hand, usually appreciates over time, and recent trends show smaller houses appreciating faster than larger ones, making a small house a much better long-term investment than a tiny home.

Counterpoint: Financial Reasons to Never Buy a Home 

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16. You Might Get Stuck With It

In the event you want or need to sell your tiny home, finding a buyer won't be easy. Tiny homeownership has more barriers than traditional homeownership in that placing, financing and insuring tiny homes is tough — and there simply aren't that many people willing to live in 400 or fewer square feet. 

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17. You Get More Value From an RV

Unlike tiny homes, which require utility hookups unless they're made for off-the-grid living, RVs are designed to be self-contained, so they have their own water and power supplies, plus a septic tank to hold waste. Also, RVs are usually lighter and more aerodynamic than tiny homes, so they're safer and easier to tow, plus there are no surprise expenses for the homeowner — and RV manufacturers have had decades to optimize their floor plans. 

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18. Tiny Appliances Can Have Big Costs

From built-in vacuum systems to clean up pet hair, to rainwater recycling systems and rotation devices that keep tiny homes facing the sun to maximize energy efficiency, construction trends could drive your tiny home cost way up. Even for something as basic as a washer and dryer, compact models designed for tiny homes cost a lot more than basic standard models. 

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19. Financing Can Be Difficult

Unless your tiny home meets zoning and building code standards and is built on a permanent foundation, it won't qualify for traditional mortgage financing. You'll need alternative financing, such as an RV loan, personal loan or credit card, which can have higher interest rates and require a higher credit score than a mortgage loan. You need a 690 credit score for an RV loan from Good Sam, for example, and the credit requirement jumps to 740 if you don't have cash for a down payment.

Click to find out how to save money when financing RVs or tiny homes

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20. Tiny Homes Cost More Than RVs

Prices for new tiny-home construction starts about $45,000, according to Tiny Home Builders, and you'll pay even more for environmentally friendly features. Mobile — now termed manufactured — home prices, on the other hand, start at around $30,000 for a 765-square-foot single-wide with two bedrooms, and you have plenty of lot choices and fewer location restrictions. Even a park model RV might be a better choice than a tiny house. For about the same size, price and footprint of a tiny house, you get a much more livable space with full-size appliances. 

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21. There Are Better Ways to Be a Minimalist

There's a lot to be said for living simply, within your means and rejecting materialism. You can adopt that lifestyle now by selling extra belongings, vowing not to buy any more unnecessary items or even by downsizing to a smaller, but not tiny, home. At least then, you'll have a chance of building equity in your property instead of investing thousands into something that won't appreciate and that you might not even want to live in for the long term.

Next Up: The Upside to Downsizing — How to Save Money by Living Minimally 

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This article originally appeared on Are Tiny Homes Worth It? 21 Reasons Why They’re a Huge Mistake

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