The tiny house movement is all the big rage now; people selling 3000 square-foot homes and moving into less than 400 ft.². But can it really help you retire early, save money and free up your life.
We recently helped a retirement couple with a tiny house on Oahu. They didn’t want all of the “stuff” that a larger house needs to feel cozy. It’s time to downsize and where better to do that than on the islands?
Tiny houses are becoming a popular housing option for many Americans over the country. They want to escape that suburban life, be able to travel more and more frugally. These homes are typically between 100 and 400 ft.² and are actually a good viable dwelling for retirees according to a recent article in AARP.
For retirees who have already downsized, 64% of them so they did so for greater financial freedom. 44% said they wanted less home maintenance and a total of 40% some retirement as a chance to live in a different part of the country. This is why a tiny house in Oahu makes a great option. People can retire early and have a big cost savings. The US standard size house cost about $272,000 a tiny house cost an average of about $23,000 if it’s built by the homeowner. If you’re considering a tiny house there are some factors to keep in mind.
There are seven factors to consider if you’re looking into a tiny house or home on Oahu.
#1. Be on the same page as your partner.
The last thing you want is to be stuck in a small space with someone that really doesn’t want to be there. You have to make sure that you and your partner or whomever is living in this small space is just as much on board as you are. If not, trust me, don’t do it.
#2. Understand how much you can really afford.
The goal of a tiny house is to save money so don’t think that you can just throw thousands of dollars into different designs when the goal is really to save the money. Figure how much money you need to save to retire early if that’s the plan and look for a tiny home that fits into your budget, not just for the initial purchase but for ongoing expenses as well. You may have land costs, rental fees or other monthly charges such as utilities, even though they won’t be nearly as much as a larger or standard size house.
#3. Start saving now.
If you plan on retiring early you want to start saving for a tiny house and be ready to purchase the property when you get here. If the goal is to retire early savings are paramount. You want to set a budget and start saving now so that you can enjoy your home sooner. As Dave Ramsey says, “live like no other so that you can live like no other”. Meaning it might take living below your means now to live comfortably at a later time.
#4. Make a list of all the items and necessities that you will need.
Simply start out by making a list of all the things that you will need ahead of time. Then, start trimming that down into things that really are not as important. You might be surprised as to what you can actually live without. Several on a few things that are paramount to living in a tiny house and then talk to your contractor about implementing them in a creative and space-saving way.
#5. Begin to downsize now.
Downsizing from a 2000 square-foot house to a 300 ft.² house is going to take a lot of purging. Start now by getting rid of things that you just won’t need in the new house. Start selling them and using those funds as a savings account for the house. A lot of these tiny houses will have built-in furnishings so you may not even need a table, chairs or couches.
#6. Consider the location.
My buying a small lot on Oahu you have a greater choice of where you want to be located. Lots right next to the beach might be ideal and because you’re not buying a half acre, you can really save money on the lots, land and by exactly where you want to be.
#7. Consider what you’re doing with your old house.
Are you going to sell it or rent it? Are their home improvement projects to tackle prior to turning it over? Do you need to upgrade certain rooms so that it sells at top value? By putting a little bit of your funds into the upkeep and upgrading of your existing house, you can have more funds at the end of the sale to put into your new tiny house adding to your retirement.