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Financial Analysis

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Financial Comparison

Tiny Home Purchase

A 2 bedroom, 600 sf tiny home would retail starting from $230,000.

If you were to finance 100% of this (no money down) this would create a new mortgage payment from $1375- $1650  per month. 

 

Condo - Purchase

1 bedroom 1 bath at around $400,000.

This property would require a minimum of $20,000 down as well as closing costs such as legals and land transfer tax (call it $25k)

The monthly mortgage payment on this new property as of today would be $2417.

Add onto this number property taxes of $200, and condo fees of say $300, your total monthly our put is now nearly $3,000

 

This is double the monthly cost of building a Tiny Home monthly, not to mention the upfront out of pockets costs. 

 

1 bedroom Rental

Lets now compare this to rental rates on a similar sized property:

Similar size dwellings range in rent from $2200-$2400 per month depending on the age, quality, etc.

This illustrates that with no money down you can generate cash flow of $550-$1025 per month, or $6600- $12,300 annually!


How does building a tiny home affect my overall property value ?

Given this new dwelling could generate rent of $1800-$2400 a month, we use a calculation involving what’s known as a “capitilzation rate” to determine the added value:

Essentially the annual rent generated from the property would be $21,600 to $28,800

Based on varying conservative cap rates, the added value to your property would be $300,000 to $320,000

This means with no money down, you can easily add $70-$90k in equity into your property!  One of the many reasons to consider a Tiny Home!

Considering building a Tiny Home on your property?

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