If you are thinking of moving from Chicago to Denver or have just moved, buying a home within your budget can be a challenge. A tiny house might just be the solution.
One option many transplants have considered since Colorado has a lot more land available is a tiny house.
A tiny house is a structure that is roughly 100-500 square feet. They’ve gained in popularity in recent years, both because they are more economical than larger homes, and because of exposure on television shows such as those on HGTV.
There are two common problems with tiny houses:
- How do you pay for a tiny house?
- Where do you put the tiny house?
How do you pay for a tiny house?
There are 2 options, cash or loan. If you have cash to purchase your tiny house – CONGRATULATIONS. You are on your way to financial freedom.
If you need a loan, you’re going to have some obstacles to overcome. Houses under 500 square feet cannot be appraised. There aren’t enough of them out there for lenders to obtain reliable appraisal based comparable sales. As popularity grows for tiny house purchases and more sales data gets out there, lenders may loosen guidelines and start offering more loans on tiny houses.
You may have the option of getting a loan through a non-traditional mortgage provider, such as a portfolio lender or a credit union. Portfolio lenders lend their own money (or money from a pool of investors) and don’t play by the same rules as larger banks. Just expect to put down more money (20% or more) and get a higher interest rate than on a traditional mortgage.
Where do you put the tiny house?
If you’re looking to move your tiny house to the City and County of Denver – Good news – they are allowed. However, some tiny houses do not align with city codes. If a RV or mobile home park isn’t what you are looking for, you will have to purchase a house that is run down and needs to be demolished or find available land. There are some cities, like the City of Loveland, that are working with tiny home owners by creating spots to place them. For one night if your tiny house is self-contained (it has a toilet, gray water holding tanks, and you need no hook-ups), try Harvest Hosts or Boondockers or Gamping.
There are several things to consider when purchasing a tiny house. Make sure you have done your research so that you follow your preferred city and county codes and regulations.
You’ll also want to talk to an expert—someone who can guide you through the process from one end to the other. As a realtor working in the Denver market, I can help answer your questions and assist you in finding the perfect home to meet your needs. You can reach out to me through my signature, or through the comments section below.