INVESTMENT STRATEGY: TINY HOMES
Tiny Homes, Big Returns HERE’S WHAT YOU NEED TO KNOW ABOUT INVESTING IN THE MICRO-LIVING TREND.
LUKE BABICH
I f you’re one of the 52% of Americans who think the economy is poised for a big rebound next year, you’re probably already looking for investment opportunities. One of the safest places to put your money is in real estate, whether that means flipping a fixer-upper or buying a short-term rental. A promising real estate investment that’s often overlooked is tiny homes. As interest in off-the-beaten-path lifestyles increases, demand for tiny homes has surged. Tiny homes, however, are an unconventional investment, and they are often subject to a confusing patchwork of
regulations. Here’s how investors can get big returns from tiny homes.
But more affordable states, such as Iowa and Tennessee, also feature high-value tiny homes that offer an exceptional return on investment. The most valuable tiny home in the U.S. is a 399-square-foot home priced at $827,000 in South Carolina, where the median full-sized home costs a fraction of that. Tiny house investors can profit from either option: investing in high-priced markets where all real estate is appreciating rapidly or finding emerging markets where tiny homes might offer superior returns. There’s a lot to gain from getting into a market early. There’s no easy formula for how to do that, but
CHOOSE A KEY LOCATION
The key to pretty much all real estate is location, but in the case of tiny houses, geography is even more important than it is for conventional homes. A recent study by Architectural Digest found that the most valuable tiny homes are clustered in a few areas. Many of these homes are in California, Florida, Texas, and Hawaii—where prices for conventional homes have skyrocketed.
28 | think realty magazine :: july - august 2024
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