Would you like to live in a tiny house? Maybe you have a poor credit score that makes it difficult for you to buy the tiny house of your dreams. Don’t worry, your dreams can come true. All you need to do is sign a rent-to-own agreement with no credit check.
Rent-to-own programs are specially designed for economically savvy buyers and those who need some extra time to save for a down payment or security deposit. It’s not uncommon for tiny houses to involve this type of arrangement.
Despite being one of the cost-efficient housing options, those homes can be very nice and quite comfortable. Read on to learn how you can become an owner of a tiny home by entering into a lease-purchase or rent-to-own agreement with the option to buy the property.
Related: Learn more about Pros & Cons of Rent-to-Own
What Are Tiny Homes?
Chances are you have heard of tiny homes. These are homes ranging from 65 to 400 sq ft. They usually consist of a kitchen, living room, and bathroom. Some also contain a sleeping loft.
Think of it as a larger storage shed with appliances, plumbing, and furniture. Tiny houses are designed in such a way to let the occupants maximize the space. It’s a great option for different people. Tiny houses are particularly suitable for couples and singles. Small families can also consider living in such a home. Those who are always on the move should consider tiny houses on wheels.
Potential Problems with Tiny Houses
Living in a tiny home has some drawbacks besides many benefits. You should be aware of them before making a decision and investing money into a tiny house.
- There are different zoning regulations and laws for tiny houses – A lot of townships do not allow these homes. In some cities, local ordinances are listing the minimum house size to prevent the dwindling of property values. Tiny homes are allowed in some places only as accessories to the main house in the backyard. Even if you obtain zoning and building permits, you may not be able to live there full time.
- Raising a family in a small house can be a difficult challenge – The small space does not work well for families with two or more children due to the lack of personal space. If you do plan to have children, you can either expand the existing tiny home or build another one that will serve as a kid’s space.
- Increased urban sprawl – A typical affordable housing is in multi-family, multi-story houses. By taking up more space on the ground, it increases urban sprawl.
- Tiny homes are potentially dangerous – Smoke accumulates faster in tiny houses in case of fire. That’s because there is a small space for smoke to travel through.
Benefits of Tiny Houses
While living in a tiny home is not for everyone, more and more people embrace it because of its numerous benefits. Here are the main reasons to consider living in a tiny house:
- Buying less to upkeep and fill a smaller house while having fewer household items
- Easy to declutter since there are no many unnecessary items to clear out
- A tiny home allows you to lower your utility bills and save on energy costs
- An environmentally-friendly housing option that takes fewer construction resources and less energy
- Relatively inexpensive to build, meaning lower property taxes, down payments, mortgage rates, and interest rates
- It’s an excellent place to bond as a couple or a family
- This represents affordable housing for people on a budget
Rent to Own Options and Tiny Homes
Rent-to-own tiny homes are perfect for those who are not able to save up a substitutional downpayment. It can be a great solution if you aren’t sure whether or not you can make mortgage payments after buying the home.
In this case, you should consider renting to own a tiny home rather than applying for classic buildings’ tiny house financing. Just like traditional leasing, there is a monthly payment included. While it’s a slower path to homeownership, the rent payments are significantly lower and you will eventually end up stopping to make rent payments.
Once you qualify for a mortgage on the home, the down payment will decrease. Down payments are usually from 5% to 20% of the home cost. Since most tiny houses sell for less than $35,000, the down payment is anywhere from $1,400 to $6,200 in most cases.
Remember that living in a tiny home doesn’t work for everyone. While tiny homes are less expensive to build, easy to declutter, and budget-friendly, the owners of these houses often have to adhere to zoning laws and minimum square-footage requirements. That’s something you need to consider before investing money into a tiny house.
Making a big financial commitment is a hard decision. Short-term rentals can be a good option for people who wish to test-drive a tiny home. This enables potential buyers to try out residing in a house before they commit to it for the long term. Give it a try!