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Finding Land For A Tiny House

One of the biggest stumbling blocks for tiny houses is finding land to put your tiny house, it can be tough to find land that will be well suited for it.  I wrote a very detailed post that outlines all the things you need to consider when setting up your land for a tiny house, read it here.

In more rural locations this may not be as hard as land is pretty available and cheap; not to mention building codes and enforcement are often a bit laxer.  However, most people live in cities, like myself, and land is tricky to come by.

In my city, Charlotte, there is very few empty lots that aren’t in a planned neighborhood that is governed by a HOA.  Land can be very expensive and the remaining lots often are not being used for very good reasons.

In general I think it’s best to find a place where there is a house there already, then piggyback off their utilities.  This can be a really easy option if you’re in a place that doesn’t have HOAs.  In Charlotte, most of the housing is about 20 years old or less, so Home Owner Associations are pretty much everywhere here in my city.  It’s just a matter of meeting the right people who might consider allowing you to live in your tiny house in their back yard.

Tiny Houses Are Hard, But So Is Everything That Is Worthwhile

The truth is that when it comes to tiny houses, there are many things that will be difficult.  No ShortcutWe all love to dream, we all love to imagine what could be, but when it comes time to actually pull the trigger you need to grapple with some of the realities.  This isn’t to say you can’t live tiny, it is to say that it comes with a lot of hard work, but it’s worth it.

More and more I have come to realize that the things in life that are the hardest are the most worthwhile.  If you think about it, what I show you how to do on this blog or at the Conference is changing the trajectory of your life in such a radical way that it boggles my mind even today.  So when faced with having our lives change in such a dramatically positive way, it makes sense to put a lot of hard work to make it happen.  So here are three reasons why tiny houses are hard, but really worth it.

1. Its a lot of hard work

It takes a lot of really really hard work to build a tiny house.  It’s not scare anyone, but I think people don’t always grasp this fact.  While the process is easy, the scale is approachable and the learning cure made easier with the awesome resources we have now, it doesn’t make the work any easier.  So the process is easy, but the work is hard.

2.  Tiny House Bring An Inherent Risk

When you build and live in a tiny house, you’re taking a risk.  You will most likely need to do it under the radar.  In the ebook mentioned below, I show you how to mitigate the risk of flying under the radar.  In the end, when it comes to codes, people’s perceptions, dealing with neighbors, and much more: its messy.  There will be drama, sleepless nights of worry, having to move and convincing the guy from the power company that you need a panel setup in the middle of the woods, but “I promise I’m not building a meth lab” type of talks.

Our Writer Andrea had to move three times in a single year because of various things beyond her control.  I thought I found land only to have it pulled out from under me.  There is an inherent level of risk that comes with tiny houses and you need to be able to deal with that; if not, then tiny houses might not be for you.

3. Building Codes Are Sticking Point

No matter what anyone tells you, getting your tiny house legal with codes is rare and if it happens, it took a ton of legwork. I see it in the comments all the time “all you have to do is X” and while we want to to believe that its “just that easy”, it is not.  If you doubt this fact, give your code enforcement office a call and try out that person’s magic phrase or loop hole, make sure you mention you want to LIVE in a house that is 150 square feet, see how that works out.

That said if you put in the hard work, you can find solutions to building codes, but it will take a lot of time, piles of paperwork, getting variances, and maybe even go to court; only then you can get it done…. maybe.  I talk about this whole process in my ebook, so I’m not going to belabor this point much more.

 

So while these three things a very tough, they are very much worth the time, effort, and hard work that comes with it.  Tiny houses have the ability to change you life, isn’t that worth some toil?

 

Your Turn!

  • What are the tough points for you and how are you trying to overcome them?

Response To Tiny House Listings’ Tiny House Insurance Post

A while ago I did a post on the topic of Tiny House insurance, which you can read here. I have not forgot about that article and have been doing a lot of thinking around it as of late.  Then I saw the wonderful post done by Laura Moreland over at Tiny House Listings and in the end she said that she hoped to start the conversation.  So I thought it would be fun to do a response to her post!

Like Laura, I am not an insurance expert, so there is a lot to learn about the field, but I’ve done a good bit of research on this and I certainly know tiny houses, so take it for what it is worth.

One thing that Laura pointed out, as I did in my last post, was that there isn’t a real viable option for insuring tiny houses.  I have had a rare few tell me they were able to get insurance through a traditional insurance company by doing this or that.  Regardless of how the did it or arranged it, I’ll be honest, I don’t trust it.  I think if those few folks had to make a major claim they’d never see a dime; I say that not to be ugly, but to make the point that insurance companies will take one look at the tiny house, realize that they should have never said yes to it in the first place and then find a way out of paying.

The one point of contention I will take up with Laura’s post is her logic on how much a tiny house should cost to insure.  She stated

In terms of my home [900 square feet], I pay roughly $800 for insurance a year for the house and contents. It stands to reason then that I would expect to pay $200 a year to insure THO because as it stands, it is roughly ¼ of the value.

The point is a fair one in some respects, but I thought I’d propose an alternative line of thought:Insurance companies work on the premise of risk management, to be viable you must take in more money than you would expect to pay out.   They operate on the assumption that if they can have a pool of people, that only a certain percentage of them will make a claim.  In an ideal world you’d have a large pool of people who are very unlikely to submit a claim.

So essentially when you have a person you want to insure you must be able to determine the risk that insuring that person brings, meaning the likely hood they will submit a claim, how often and for how much.  The higher the risk, the higher the cost of the insurance.  Insurance companies determine this risk by developing actuarial tables that will predict the likelihood that someone will make a claim.  It’s a pretty complex process and based off of really big data sets.  The complexity and level of detail that goes into this means that insurance costs vary wildly from location to location, as well as on a ton of other variables.

So the line of thought I’d propose on price is that the cost of insurance for a tiny house should not be based off of value solely, but that of the assumed risk and that you should be collecting more money than you pay out.  I think many insurance professionals would agree with this statement.  So the question now is, how much risk does a tiny house bring?  I think if we were honest about it, the answer is a lot.  It is after all why traditional insurance companies won’t insure us, because we are too risky of a proposition.

So while the cost of a tiny house is much less, the risk is much higher.  So the costs to insure it will still be pretty high.

This isn’t what a lot of people want to here, but I have a few solutions to this that could help make swallowing this pill a bit easier, but also help keep tiny house insurance premiums lower.  The two things we’d want to achieve is to minimize risks so that the group as a whole can cover their members appropriately while being able to ensure stability for the future; second we want to weed out potential bad apples that will abuse, extort or try to game the good intentions of insuring tiny houses.

Be Transparent

I am a true believer that you need to be honest in your dealings with people and when it comes to someone’s home, there is few 44262008807272831LfIY43STcthings in this world that we care about more (of course the people matter more).  So the mantra trust, but verify is key here.  We need to build a system that is very transparent because we need to earn the trust of our members.

However we choose to structure this, we need to be crystal clear about it.  Even though I propose a non profit model, even though it should be transparent, even though this project would have the best intentions, there are some realities and decisions about those realities that will need to be made.  Things like the points I propose below are good examples.  So we need to be practical, but we also need to be really clear up front and make sure people can easily understand the minimal fine print.  If we can do that, then people can make informed decisions about if they want to join or not.  If I have learned anything from blogging it is, be honest about who you are and what you stand for and own it.

Enact standards

In order ensure that the tiny houses that are insured aren’t poorly built, we need to develop some sort of standard.  The idea being that since tiny houses are often DIY affairs, you need to be sure people aren’t making honest mistakes that could have dangerous consequences.  I don’t think this would have to be a huge set of standards, but there are some key areas of focus that we could advise on which would address safety and structural issues.

Now many people will not like to hear me proposing what amounts to building codes, but I think that if we don’t do it ourselves, someone else will at some point; I think we’d rather help determine the direction than a profiteer or politician.  Next is that these should be accessible, meaning free and easy to understand.  The should also be community driven and reviewed, meaning that people from our community help steer this process, then open it up for feedback from the rest of the community.  It should also be used a teaching tool, not as a way to penalize people; the goal should be to empower first time builders and ensure safety.

High deductible policy and diminishing rates

To help reduce the cost of plan, I think we should have it designed in a way that people only make claims on major damage and total loss.  If you break a $80 window, it shouldn’t be a claim, because small claims will lead to the insurance fund getting nickled and dimed out of existence; we need to balance being their for people in times of needs and being sure that we can stick around as that protection for tiny house people for the long term.

So to achieve this I propose a high deductible, a level TBD and one that could be lowered as the co-op grows to have more members, which will have people in the insurance co-op will handle small things on their own, but sleep well at night knowing that if their house burns down, we are there for you.  The other thing we can do is to encourage people who don’t have any claims by reducing their monthly rate after a certain period of time.  So if you have been with the insurance co-op for a few years, your monthly bill will be negligible; this will encourage people to stick with the co-op long term, but also only make a claim when it is really needed.  I will also propose an unpopular point here, if you make a claim, your rates will return to normal rates for a pre-determined period; this too will help people make claims on only big things.

Trust, But Verify

With dealing with new members to the co-op I think you should always be trusting, but being that this would be a non profit (meaning for the public good) and that existing members are entrusting you to make decisions for the group to ensure that their tiny houses are protected, you need to do your due diligence  on vetting new members and ensuring claims are legitimate.  Again, this won’t be a popular point, but if I am going to say to someone, I got your back if things take a turn for the worst, If I’m going to say I am here for you, I mean it.  So again, I think if I am transparent about the process, that it will include checks and what those checks are, then you can make an informed decision to join or not.

Okay this turned out to be a lengthy post, I had to gloss over a lot, but here are some of the ideas I wanted to put out there for the conversation.

 

The Fallacy Of A Cheap Tiny House

So over the years I have seen many people touting their tiny house as only being a few thousand dollars to build and many crying out in protest over how much some Tiny Houses cost.   While I do think there are many ways to save quite a bit of money during the building process, the fact is Tiny Houses cost money and a good bit of it.

Even though Tiny Houses pale in comparison to the cost of traditional homes, the price tag of a tumbleweed style house or similar often leaves people wondering how they can cost so much.  So I thought I’d break down some key factors that those who claim their house is only a few grand often neglect to mention.

 

istockphoto_5212090_time_is_moneyYour Time:

One of the biggest places that people often don’t assign costs to is time spent on your house; Particularly if you time spent on building your house takes the place of working a normal job.   The fact is that many people don’t have the money to build a tiny house all at once, but they do have time.  So they build it themselves and many spend time sourcing reclaimed materials.  While there absolutely nothing wrong with this, I am taking this approach, you simply cannot say that your time is free.  You have value, your time is valuable, and you are giving it up to build/source in the place of something else.

When it comes to finding reclaimed materials, dumpster diving, checking craigslist every day to find all or some of the materials you need, it takes a huge amount of time.   For those of you who haven’t tried to source materials for an entire house, it can be very hard to understand how much time.  If I were to estimate a figure, I would guess you spend twice the hours spent on building.  Additionally, the ones that do reclaim their materials often have pre-existing social connections that facilitate this that the majority of us simply don’t have.

 

Their Time:

I get a lot of people asking me how to get a tiny house built for them and for many, this is how they want to get to their dream of living in a Tiny House.  For many they don’t have the skills to build a house (though I firmly believe almost anyone can learn)or they have the time to do it.  The fact is that regardless of it being a Tiny House or a McMansion, labor costs to build a home can be anywhere between 40% – 60%.

Now there are some that criticize tiny house builders of charging $50,000 when it costs $25,000 in materials, as building in huge profit margins.  The fact is, if you sit down and really crunch the numbers for what it takes to hire workers, insurance, rent a build site, tools, utilities, and a million other things, I’m surprised that they can eek out a modest living; in fact I don’t know for sure that anyone has been able to have it as their sole job.  Even Jay Schaffer had to expand into books, classes and plans when he first started.

 

Consumables:

15839812-a-close-up-of-a-screw-in-woodSo I am going to cry foul on many people who claim they made their home for only $3-5,000 because at this point in building my Tiny House (only about 1/3 of the way built) I have spent almost $900 on nails, screws, bolts, glue, fasteners, brackets, etc.   There is no way you can get around buying these things because you can’t really reuse nails, screws or glue.  As for brackets and bolts for tie downs, you might be able to reclaim them, but in most examples (not all) I have seen, people simply were cutting corners and not adequately anchoring their houses to the trailers.

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What do we really need?

Before we even start to think about floor plans or how you will store all your stuff in a Tiny House, we first need to get down to the basics.  What do you really need in this life?  It is often a lot less than you think, but I feel it’s also important to point out this isn’t about living without, we aren’t trying to sacrifice things here, we are trying to find the happy medium.  When we understand our needs, we then can determine the form and function of our house.

I have talked before about symbols of happiness, the idea that we purchase things which remind us of happy things, of our hopes and wants, of our dreams, but they do not themselves bring us happiness.  In fact, internally, I think this actually creates inner turmoil because our desires go unmet.  A perfect example is having a desktop or screen saver of a white sands beach, it constantly reminds us of us not being there, and it doesn’t seem healthy.

So what if we were to adopt a lens to view our world through to determine what bring us joy and contentment.  With this new lens we need to do a shift in thinking as well.  We need to know what things to strive for, to know what things we must pursue, but they should be achievable with hard work.  At the same time, we need to be okay with not having things that we will never have and shift focus to the things we do.

I am reminded of a story about a man who sought the wisdom of Buddha.

It is said that the happiest people don’t have everything; they just make the best of everything.  While cute quotes such as this one may be fun, we are beginning to see there is a solid foundation in truth to them.

There have been quite a few studies that show that too much clutter has a very negative impact on our well-being.  Angus Deaton, Ph.D., a renowned economist, and Daniel Kahneman, Ph.D., a Nobel prize-winning psychologist conducted a study where they were able to determine that people who made $75,000 a year were the most happy of any salary range.  They were able to show that above that figure had no bearing on happiness and in fact, it could decrease because additional stress that comes with that job.

Now $75k seems a lot to many, but I would expect that Tiny House people could achieve this same peak happiness at a much lower salary because your money goes further. It isn’t the amount of money here that matters; it is what it affords you that is key.  At $75,000 you can afford all of you life’s basics, you can have good health insurance, a good house, some money to take trips and still save some for a rainy day.  With a Tiny House you remove the housing from the equation, which is equivalent to many people’s 30%-40% of income; in this case $23,000-$30,000.  So if we adjust that $75k we are looking at $45,000 annual salary which is much more achievable.

One way I help people determine what is important to them is propose a scenario.  Imagine you wake up one night from a deep sleep and flames are curling up the walls, your house is on fire.  You look out the window to see your family and pets screaming for you to escape with your life.  What do you grab on your way out of the house, know that all else will be lost?

There are few things in this world that cannot be replaced: those close to you and things that remind you of times with those people are irreplaceable.

Finally the differentiation between wants and needs is a tricky lesson to learn.  We are exposed to a consumer culture that makes it hard for us to even separate these things.   So this part is a gradual process that many of us still find ourselves grappling with.  It has been taught to us from a young age that accumulation of things is better.  The more stuff we have, the better we are.  The psychology of these things cannot be understated; we need to dig deep into ourselves to examine our motivations.

So hopefully this has let you understand a little bit of what truly makes you happy, what to steer clear of in terms of things that we THINK make us happy and help change our thinking to determine our needs and wants.  Once we do this we are prepared to fully determine our true needs and how to arrange our life to live in a Tiny House.

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