I’ll be the first to predict it- tiny homes are the new trend in housing. Okay, well, maybe not the first. Tiny homes are popping up everywhere, along with all other forms of alternative housing. I recently saw a video of a woman who converted a semi-truck into a full-blown portable home.
Why are tiny homes and other alternative homes becoming so popular? First, there is a housing shortage that is causing housing prices to go through the roof. Second, people want to downsize their lives and reduce their tendency for consumerism. Third, there is a departure out of the major metropolitan areas because of the rise of telework. Fourth, people aren’t satisfied with living in the standard city-dwelling, paying top dollar for little perks.
Housing Shortage. Everyone can feel the housing crunch. Those with assets are getting richer by the minute. Those without are trying their best to get into the market. One of my homes appreciated 10% in the last 12 months. How is someone supposed to buy a home with a market like this? I wrote more about this top in “Millennials, Homeownership, and Kids.”
How do You Define “Being Rich?”
Minimalism. People want to get back to their roots. Sure some people still want two fancy cars, boats, nice furniture, private school, jewelry, etc. But, many have seen the light. Relationships and experiences are the waves of the future. When most folks realize this, they tend to want to downsize. I wrote more about it in “Minimalism: 7 Ways it Leads to Financial Freedom.”
Telework. The ability to telework has freed many people to travel further away from major metropolitan hubs. The hustle and bustle of the city have faded, along with long hours sitting in traffic. However, as I write in “Remote Worker Beware of a Pay Trap,” companies may be setting their employees up for failure. Businesses may start paying salaries based on where the employee is living, not where the business is located. Beware, relocating from San Francisco, keeping the pay, but living in Alabama may be a thing of the past.
Better Life. Others want to have a better life— maybe leave the city and start a sustainable farm or live on a quiet lot of land. I read about a couple living life on a sustainable farm in the book “Dirt Rich.” This couple also made their farm into a decent-sized business— the best of both worlds. I wrote about some options to run your own farm in “Buy Land, Start Farm.”
Enter tiny homes. Tiny homes could be the solution to all of these situations. Tiny homes are small (tiny) homes that exist for the act of pure living. There are not many amenities in tiny homes— the point is to get back to the basics. They are suitable for putting a roof over your head and other basics. The idea is to spend as much time outdoors, in nature, as possible.
The Advantages of Adult Children Living at Home part II
Concerns. The main concern with tiny homes is where you are going to put them. Enter the entrepreneur. As an entrepreneur, your job is to solve other people’s problems at a profit. If you have been reading some of my work, you know that finding cheap land is possible. What if we started buying cheap land and inserting tiny homes on the land? Read “How to Become a Land Millionaire” for more on buying cheap land. The book “Dirt Rich” (different from the book as mentioned earlier) details how to find and obtain land for cheap.
Other concerns with tiny homes are that cities and counties don’t like them. Maybe because of reduced taxes or something else, but for whatever reason, municipalities don’t care for tiny homes. You will need to research the rules of the land in your area. As you move further away from bigger cities, the management should become laxer. However, do your research, so you don’t get caught in a jam.
Maximum Leverage 2: Buy Homes with Zero Money Out-of-Pocket
Where to buy tiny homes. Some websites allow you to search for used tiny homes. Others will make homes built to order for you. Conduct a google search and find the site that you like best. Remember, the house is just the starting price. You also need to consider shipping, permits, foundation, sewage, power, water, etc. The costs can start to skyrocket.
IKEA is now making a tiny home. This tiny home is the one I am most interested in because it is mass-produced— it will provide the most options for part availability and support, in my opinion. Also, it looks like it doesn’t need a foundation. However, if I drop it in Florida, I am sure I will want more support with the hurricanes.
The quality of the tiny homes is something that you have to be very aware of as well. Mobile and manufactured homes have to go through a rigorous testing protocol and be certified by a government entity. Most are hurricane-rated as well. I personally do not know the rules for tiny homes, but I assume they are not as rigid as mobile homes just yet. Again, buyer beware. Conduct your due diligence before you jump too far in.
Our Most Stressful Moments as Homeowners
My plan as a young brilliant entrepreneur. For me, the best way to maximize the potential of mobile homes is on your lot of land. I own two homes with 3 acres of land each. I want to drop a few mobile/tiny homes on each of these properties. As much as I love tiny homes, buying a small mobile home may be more friendly when dealing with municipalities. It would look into something like the below-pictured home.
From there, it is just a matter of math. Let’s say I can get a tiny/mobile home financed and dropped for $80,000— my payment would be roughly $500/month. Where I live now in Florida, I can quickly get $1,100/month rent for these homes. The even better news is that with that much profit, I have many options for debt repayment. Using the home’s profit plus our cash, we could pay down the house in one year.
If you can replicate this for three to four straight years, dropping a home and paying it off, you could amass wealth exceptionally quickly. In 4 years, you could have $3,500 to $4,500/month passive income, all on your property. These methods are how people make fortunes.
Become a Private Money Lender
My wife and I currently make about $2,000/month in passive rental income, and I tell you, it is life-changing. Imagine having twice that amount. And yes, having tenants can be a headache. For me, I would rather deal with a tenant and be rich; than not deal with a tenant and constantly worry about money.
The only way to build true wealth is to serve others. The more tenants you house, clients you assist, and customers your serve— the more wealth you accumulate. Tiny homes can be your path to wealth. The goal is to find cheap land, prepare the land for living, and find a way to get tiny homes, mobile homes, or RVs installed on the land. Yes, it may be a pain in the rear, but all passive income requires some form of active work to begin.
Imagine you take on these projects with your children. You kids could be making $4,000/month passive income to start their young lives. These vivid dreams are what fuels excellent realities. I am beginning to think outside the box, not for my sake but my children.
Hopefully, I brought you some value and helped you think of some passive income possibilities. Follow my blog for more ideas and concepts on creating passive income. Also, follow the link below to find out when I will be offering some of my books for free on the Amazon Kindle platform. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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