Places To Put Your Tiny Home
One of the biggest obstacles we faced was finding Tiffany a home. One thing I hear over and over from Tiny home dreamers is that the biggest halting factor is finding a place to put their home. Once I found Tiffany from Adam, I started researching my dream landscape: wide open empty land. There is something appealing about the idea of land with lots of Spanish moss...
I found that land is hard to come by if you don't have the cash. Land loans are not designed like a normal home mortgage that most are used to. I have tried just about every big bank in the book, I could not find one that would give me a land loan. I have been told that banks do not like to give land loans out for a couple reasons. One main reason is that if there is no housing structure on land it is harder for the bank to recover if an individual default on the loan. Let's break down the land loan options I found out about.
Raw Land Loan - "Unimproved “raw” land is usually the hardest to finance or get with favorable terms. Lenders consider raw land as the least desirable collateral for all land uses. Most will require more money down (up to 50 percent) and charge a much higher interest rate."
Lot Land Loan- "Lot loans are usually available from local lenders and some national lenders. A lot loan typically consists of one or more building sites for residential construction. These sites usually have been improved with the addition of sewer and water systems, streets and easy access to other utilities. Typically lot loans require 10-20 percent down, with amortization terms up to 20 years. These lots are also financed by home equity or cash out refinances on the borrower’s current home."
As you can see, land loans are much different than typical home loans. The main reason we wouldn't have been able to get a "raw land loan" is that there are usually impact fees that can range in the thousands just for adding water, sewage and electric to the land itself. Not to mention the actual cost of installing those utilities on the land. So we starting diving into "lot land loans".
Lot land loans seemed like the best option until we found out about zoning. Most counties I came across have a minimum square footage in order to consider your structure to be livable. Yes, there can be rules on how big your house HAS to be in order for you to live in. (eye roll) So if your tiny structure does not meet the zoning codes for the land you are looking to purchase, you're out of luck. One website we found to be a huge help was American Tiny House Association. This organization has a great section where you can look up your state regulations. Beyond this, call up your local zoning department for the county you are looking at, they are typically aware of what a tiny home is and can help!
Construction Loan- "Short-term (usually 3 years) real estate financing secured by a mortgage on the property being financed. This loan is meant to cover the cost of land development and building construction and is disbursed (1) as needed, (2) as each stage is completed, (3) according to a prearranged schedule, or (4) when some condition is met. Construction loans are paid off from the proceeds of permanent financing (usually for 20 to 30 years), which in turn is repaid from the cash flow generated by the completed building, and is arranged before the construction loan is disbursed. Also called building loan, construction mortgage, or development loan." Have your building plans outlined along with the costs so the lender can evaluate their risk as well as your capabilities.
A construction loan, great! Here is what stopped us from getting one.
- First, applying for the loan the first question to ask is a total dollar amount for the structure being put on the land. Well, try asking for a construction loan for a structure that costs about the same as some cars. Banks are not too happy to hear what type of small structure will be on the land in case of a default on the loan. It is a much higher risk for the banks, so scratch that off.
- Secondly, my best bud, Bryan, works with construction. He mentioned having to get a general contractor in order to get permits to build the structure. Unless you have a family friend that could do this for you (there are some high fees), you might want to look elsewhere to keep cost low. Since we didn't have unlimited amounts of funds this put a construction loan to a fast halt.
Sellers Financing- "A real estate agreement where financing provided by the seller is included in the purchase price. It is also known as a purchase-money mortgage. A purchase-money mortgage is a mortgage given to the seller as part of the buyer's consideration for the purchase of the property and is delivered at the same time that the real property is transferred as a simultaneous part of the transaction."
This is a great option if you are able to find a seller to offer you financing. For our case, we were not able to find a piece of land in our budget that offered this option. From my research, they typically ask for a large down payment up front, 20-50%. This would not have been possible.
If the land isn't your plan and you're looking to have a Tiny Home On Wheels (THOW), there are three awesome options we can talk about:
Private Land Rentals- The best places to find private land rentals is TryItTiny.com. This website is great not only for people wanting to try tiny living out, but also connecting landowners with tiny home owners. Sam and I actually tried a tiny before we bought a tiny. We made a past post about it if you click here.
- Craigslist is, of course, another great option. Landowners are sometimes looking to make a little extra cash on the land they don't need. My only caution with Craigslist is to make sure you'll have the proper hookups and to take a look at the site before hand. You don't want to get there to find out you can't get your tiny home on the land or it's not what you expected.
Privately owned land rentals can be risky in my opinion because this is typically not an established organization that is renting, so they do have the ability to ask you to leave without notice.
- Campsites/RV Resorts- This is what we ending up doing with Tiffany! We love our tribe here. We are truly grateful for falling into such a great campground. The nice part about specific tiny homes like Tiffany is that they can be registered with the state as an RV! Start with Google and search "RV resorts near me" and see what is around you. My suggestion is to write down a list of questions you can ask the campgrounds/RV resorts so you cover everything you need to know to make your choice. I offered to send an email with information and pictures of Tiffany so they can actually see the home. This is a great way to get parks more comfortable in Tiny homes as well as bring up the idea of a new revenue source for their business as well. It's a win win for both. If you're in Florida and under 55+ this will seem like an impossible task, but they are out there!
Make sure you check your county's regulation on living in a recreational vehicle. In our case, Sarasota lets people dwell in an RV for no more than six months. After that, they will ask you to move it. There are also regulations on how far you have to move it (rolls eyes again). I have seen regulations from three yards to three miles, everywhere is different. The county right above Sarasota does not have regulations for this, which allows us to live in our tiny home at the same spot all year round if we choose!
- Tiny Home Communities- View it as RV parks for tiny home owners. Not only do you get to be surrounded by tiny homes every day but you get to share ideas and tips with like-minded people! A lot of these communities have beautiful lakes or ponds on the property as well, or if you prefer a hustle and bustle setting of a city, they have that option too! We even heard a talk at the St. Pete Eco Village Tiny Home Festival about a community that had its own currency!
- Mobile Tiny- The Holy Grail of tiny home living... If you have the source of income that lets you be a digital nomad then this, in my opinion, is the best way of experiencing tiny home living. Having the right home and transportation is the #1 thing to take into account. Just like backpacking, weight is everything in this case. The ability to hop site-to-site or site-to-community should not be a problem!
If you're in the process of trying to find a place to put your home, I would imagine your struggling, do not give up. I repeat, do not give up. If I learned anything from the road block of finding a spot to put Tiffany, it is this: There is a solution to every problem you are faced with especially when trying to live tiny. The powerful Joe Rogan once said, " We define ourselves far too often by our past failures. We look at our past and say "Well that's me." That's not you. You are this person right now. You are the person who learned from those failures and you can choose to be the hero of your own movie, right now."
By no means am I am expert at this topic, but this was my experience and understanding of the obstacles we came across. Every state and situation is different, so please let us know your experience in your research in the comment section below. It could help someone make their dreams of tiny living become true!