The tiny house movement has taken the suburban dream, flipped it, bent it, upended it, and created a whole new approach to everyday living.

The movement involves the construction of homes that are typically between 60and 400 square feet in size and are often placed on wheels so that they can be transported wherever their owners travel. The movement is also chiseling new niches in various home building industries that can meet the needs of this subculture. 

While the shift to tiny houses so far involves a relatively small subculture, all indications point to the fact that building tiny homes is gaining momentum. In particular, two groups are being drawn into the movement: Millennials, who have minimal funds and are saddled with college loans; and Baby Boomers try to stretch their pension by finding affordable homes.

Key Takeaways

  • Tiny house living began as an eco-conscious movement, and it has morphed into a niche of the housing market.
    Tiny houses vary in size, but most are between 60 and 400 feet in size.
  • Upscale fixtures may be added to improve a tiny house's marketability.
  • Landowners have rented out acres of their property to tiny homeowners, as some houses are made on wheels, similar to a recreational vehicle. 

The Growth of Niche Tiny House Companies

To begin with, a market is opening up for the construction and retrofitting of such homes. While many tiny house homeowners have chosen to build their homes themselves, many still seek construction advice and purchase construction plans.

Companies such as Tumbleweed Tiny House Company and Tiny Home Builders are meeting those needs. Still, homeowners seek evermore innovative and environmentally sustainable ways to design their homes, thus creating a market for those willing to bring new ideas and approaches to tiny house construction. 

In fact, beyond the actual manufacturing of homes, which typically cost between $30,000 and $60,000 to build, there is an ever-expanding market for home décor and furniture that meet the specific dimensions and unique requirements of a tiny home.

Tiny Living Lifestyles

Tiny homeowners require furniture of innovative design that is multi-purpose (capable of being transformed into several pieces, with multiple functions) and maximizes the use of every bit of space. This again creates a niche in the market for designers and carpenters willing to meet this need. Those wishing to market to tiny house residents should also note two lifestyle approaches that have been observed.

Eco-Conscious

Firstly, many are environmentally conscious. In fact, it’s been noted that the movement “began as an effort by a small group of individuals to shrink their carbon footprint." Such individuals seek to build their homes using reclaimed wood and re-purposed furniture and are installing solar panels and using composting toilets. This expands the demand for such eco-friendly fixtures for the home—creating an opening for those wishing to sell or manufacture such products.

The tiny house movement is opening niche markets in the luxury home goods sector and new opportunities for custom home builders.

Niche-Market Luxury Goods

Secondly, oddly enough, the tiny house movement introduces a new luxury sub-culture within the lifestyles of the typical demographic groups drawn to tiny homes. Those in tiny houses are often well-educated (with many being artists and writers, and the majority of those surveyed saying they had at least some college education), with cultured tastes, who are seeking to live simpler lives. However, spending less on typical household expenses increases their disposable income—making them able to spend on certain luxury goods such as food, décor, and vacations that they otherwise would not afford.

The tiny homeowners include buyers who are conscious of a specific kind of upscale "tiny living" lifestyle. They often splurge on the installation of stained-glass windows, wooden floors, cathedral ceilings, and modern electronics in their tiny houses.

Real Estate Opportunities

The tiny house movement has also opened up real estate opportunities for individuals looking to generate additional income for themselves. Instead of purchasing property, many tiny homeowners rent land. Some landowners have made easy profits by renting out small sections of their property to several tiny homeowners.

Another option for revenue-generation is the construction and sale/rent of tiny houses. The time it takes to construct a tiny home would be short compared to the construction period for an average-sized house. Those who rent land to tiny homeowners can be assured that the water and electricity usage by such homeowners are comparatively low since these homes are small and are usually energy-efficient.

The Bottom Line

This article scratches the surface of how the tiny house movement could alter the landscape for real estate, home-ownership, and personal financing schemes. Its implications extend into zoning laws, possible options for dealing with the homeless, and the very culture around us. As this movement gains momentum, it will continue to impact the housing market.