Who could blame you if you suddenly decided you want to try living in a tiny house? They’re cozy, cute and a one-way ticket to a minimalist lifestyle. Moreover, housing prices aren’t making traditional homes attractive, so going small could be good for your wallet too. However, living in a fraction of the space you’re used to can be a challenge – you need to rethink how you organize your household and even adjust your lifestyle if you’re going for this type of house.

Here’s the complete guide to tiny house living, including some basics about what tiny home living is and how to get ready for the transition.

1. What’s a tiny house?

If you’re wondering what a tiny home is, you should know there are multiple designations – it can be classified as an accessory dwelling unit (ADU) or an RV, depending on location. Essentially, they’re a scaled-down version of a typical home, complete with all the trimmings and amenities. To get a clearer picture on size, tiny homes typically have about 400 sq. ft. per the International Residential Code specifications. That’s only a fraction of the typical American home, which is about 2,300 sq. ft of space, according to U.S. Census data.

Tiny homes appeal to those looking to live simpler lives, but also if you’re trying to use it as an in-law living arrangement on your property.

ADU on a Property

2. Types of tiny houses

Tiny houses come in two main types of structures:

Wheeled tiny homes

They can be moved, just like RVs or trailers. They can be custom-made or can be conversions – buses, van or even shipping containers can be thus repurposed.

Mobile tiny house

Stationary tiny homes

They’re tiny homes built with a foundation, meaning they are fixed to a certain location.

Deciding which type is the best for you depends on your lifestyle. If being on the road appeals to you, then a wheeled tiny home is probably your best option. A stationary one comes, however, with the benefit of accruing equity.

3. Why turn to tiny house living?

Before diving into the tiny home lifestyle, you should know what benefits it brings. Here are some of the main reasons behind the hype around tiny home living:

  • It’s a money-saving solution

With homes being less affordable, a tiny home is sure to cut down on your housing budget. They’re much cheaper than a typical home because they obviously offer only a fraction of the living space a regular home does. Plus, if you’re downsizing from a bigger home, you might even get to live mortgage-free and enjoy some extra money for other investments, travel or retirement.

  • Live a minimalist lifestyle

If going minimalist sounds like you, then a tiny home is right up your alley. Reducing your belongings can help you enjoy life more and help you prioritize what’s truly important to you.

Ultimately, living a minimalist lifestyle is all about sticking to the essentials to free up time for the things that truly matter to you. Linda Chavez, founder and CEO of Seniors Life Insurance Finder also seems to find this true for herself: “The primary benefit of living in a tiny home is the feeling of freedom it offers. From being able to move around easily to having fewer possessions to take care of, tiny home living can be liberating.” An important consequence of adopting a minimalist lifestyle is that it helps you to focus on organization and structure. “Living in a tiny home has forced me to become more organized and mindful of the things I use and need on a daily basis,” Linda added.

  • More travel time for you

If you’re going for a wheeled tiny house, you get to enjoy the perks of traveling. As you get to spend less money on utilities and other home-related expenses, you can use that extra budget for vacationing in a new spot. Also, if you’re a digital nomad, you get to take your home with you everywhere you go.

  • Care for the environment

You could also do your part to help the planet when you go for a tiny home. Many of them incorporate a solar panel roof, are made out of recycled materials and typically require less material to be made. Moreover, their size automatically reduces your utilities and, thus, your carbon footprint. This idea also resonates with Linda Chavez. “I appreciate the environmental benefits that come with tiny home living, such as reducing my carbon footprint and utilizing fewer resources,” she told us.

4. Find out if the tiny house lifestyle is right for you

The tiny home lifestyle sounds great on paper, but it is right for you? Start by thinking about your belongings – are you ready to part with a good chunk of them as you’d have to seriously downsize? It can be a drastic change, and envisioning potential challenges might help you decide whether this lifestyle is for you. “I wish I had known that it requires a significant downsizing of possessions and a shift in lifestyle,” Brian Clark, BSN, MSNA and Founder of United Medical Education, shared his thoughts about what you should know before taking the plunge to tiny home living. “It was challenging to adjust to the limited space, and it was important to consider whether it would be a suitable long-term living arrangement,” he also added.

If you live with a partner or have a family, how well do you think you could live together in small quarters? After living in a tiny home herself, Linda Chavez sees value in planning your everyday life to make sure everything goes smoothly. “The first thing I wish I had known before turning to tiny home living is that it requires a lot of planning and preparation. From choosing the right location to figuring out how to minimize your belongings, there are many decisions to make when transitioning into the tiny home lifestyle,” she let us know.

From above- looking down onto a living and kitchen area of a tiny house with large windows and wood floors with lots of natural sunlight

Moreover, if you enjoy throwing parties and having friends over, would you be able to give that up? Ultimately, you could do a test run to see if the lifestyle is right for you. You can rent a tiny house on Airbnb for a week to try it out.

5. Consider the costs of living in a tiny home

While tiny home living comes with a smaller price tag than living in a regular home, you should be aware of the costs involved before taking the plunge. Unless you’re paying the cost of the house yourself, you will need to take out a loan. Since banks typically don’t approve a typical home mortgage for a tiny home, your best bet is to consider alternative funding options.

Beyond the cost of acquiring the home, there are also other expenses associated with tiny home living. According to Linda Chavez, “Although a tiny home can be a more affordable option, there are still costs involved in the build, maintenance, and upkeep of a tiny home.”

Let’s take a look at what it takes to take on the full tiny home lifestyle in terms of types of expenses:

How much is a tiny home?

A tiny home costs, on average, between 30K and 60K. However, the costs of a tiny home may vary depending on many things, including the type of unit, location and whether you’re buying or you’re building it yourself.

You can also consider buying a ready-made tiny home – pre-built homes are available for sale. You can order them online. As for pre-owned homes, you can probably find a listing on a real estate website or on eBay. Additionally, Facebook groups and the Tiny Home Builder’s Marketplace also offer options for future tiny homeowners. They’re typically cheaper and can cost around $30K.

If you’re able to pay for it upfront, you’re basically debt-free. That’s an aspect that’s obviously appealing to everyone. When Tim Connon, founder of Paramount Quote, turned to tiny home living, living mortgage-free was a much appreciated perk. “The main thing is debt-free living; knowing that I own my shelter is a breath of fresh air,” according to Tim.

When going the building route, you can completely customize it to your taste. Keep in mind that building materials can also cost too. Materials can cost anywhere between 20K and 60K. Moreover, mobile tiny homes tend to be cheaper than stationary ones. Buying the land and building one from scratch in Idaho can cost you around 34K. In this particular case, turning the home into a full-time Airbnb has paid off well, with the owner cashing in on close to 50K a year.

Deciding whether to build or to buy a tiny home – and also whether you’ll use it to live or turn it into a business venture – is ultimately a matter of balancing your expectations and your budget.

Tiny House Interior With Sofa, Kitchen, Dining Table, Bedroom And Garden View From The Window

Homeowner’s insurance

You’ll need to consider homeowner’s insurance, which can vary based on your home’s size and value. If your tiny home is situated on your existing property next to your already existing home, you can probably include it in your main homeowner’s insurance. If you’re getting independent tiny house insurance, it can cost you in the $400 – $1,500 range per year.


Your main utilities are water and electricity. You might be able to connect to local utilities depending on your location. If you’re mobile and traveling, you should consider alternative sources of energy, such as solar panels. Installing a septic tank might also be necessary.

Parking fee

Other expenses could include renting (for the land if applicable) or parking, which can be anywhere between $120-$500/month.


If you’re going for a mobile tiny house, you should also factor in the cost of transportation. That includes the cost of a towing vehicle and gas for the trips you’re taking.

New furniture and appliances

Unless you’re buying a tiny house that comes with all the trimmings, you will need tiny house-sized furniture and appliances. While some of your full-sized pieces could be reused in your new setup, chances are many of the regular home furnishings and appliances will not fit into your new home.

Rustic tiny house interior design with kitchen, living room and bedroom in mezzanine floor in warm sunset light

6. Places you can live in a tiny house

Tiny home living might be catching on fast, but not everywhere. Introducing one in a certain area poses a number of legal issues. That also happened to be the case for Brian Clark. “I wish I had researched local zoning laws and regulations regarding tiny homes to ensure that it was a legally viable option in the chosen location,” he shared with us.

Depending on where you live, you may or may not be permitted to live in one. You can consult the American Tiny House Association to glean some guidance, but remember to check local regulations for the final say. Some states are more tiny house-friendly than others, with some Californian counties passing laws that recognize tiny homes as real residences.

If you’re going for a stationary tiny house on your land while you already have a house on your property, the new construction can legally fall under an ADU (accessory dwelling unit). It can serve as an in-law suite you can rent or have family live in.

For the mobile tiny homes, you can also look into tiny house communities, where you can join groups of people who appreciate the tiny home lifestyle. Be sure to check their rules before joining them.

7. Pick your home design

Before moving in, think about the design of your home, especially if you want to customize it to your needs. You also have a more compact space at your disposal, so making the most of it in terms of furniture size is key. Tim Connon has also experienced the challenges of picking the right furniture size for his tiny home. “I wish I had known that tiny home living would require accurate measurements of furniture I intended on having in it. Every bit of space is valuable, and I did not know I would have to be so meticulous about my measurements,” he told us.

Mobile tiny house with floating shelves

Another thing to consider is multi-functional furniture and appliances. Your dining table can be used as a work desk. Add sliding or removable pocket doors for privacy. Pick stools with storage – they can come with removable lids for easy access. Additionally, go for a convertible couch and floating shelves to help you make the most of the space.

If you enjoy cooking, you might consider getting full-sized appliances if the space allows it. Also, consider adding a Murphy bed if you ever have guests over.

To create an airy space, go for a light color scheme – white might be the first color to come to mind, but pastels and light green or blue could also open up the space and help you enjoy your new home more.

8. Before moving into your new tiny house

Assuming you’re moving from a full-sized home, you will have to do some serious downsizing prior to moving into your new home. Here are some steps you can take to do that:

Decide what you want to keep

You can go through your clothes, kitchen items and other non-essentials first. Select items that you always use and must have to put in a “keep” pile.

Donate to goodwill

As for the items that you do not need and are still in good condition, you can put them in a “donate” pile and take them to your local Goodwill store.

Turn to self storage

For the items that you don’t use on a daily basis but still need, you can turn to self storage. Outdoor furniture, including chairs and tables that perfectly complement your RV patio in the summer, can easily stay in a storage unit until the weather allows its use again. Seasonal clothing can find a good home in storage, as well as your book collection, any heirlooms that bear sentimental value, or sporting gear. This way, you can keep your home tidy and uncluttered, and you can still enjoy the things that you love. For smaller items, such as clothing and outdoor gear, you can probably use a 5’x10’ unit.  If you need to store furniture or appliances, you’re better off going with a 10’x10’ or 10’x15’ unit. To get a better idea of the type of unit you need, you can check out this storage unit size guide.

Renting a storage unit might cost you differently, based on location, with some cities having more competitive rates than others. For instance, renting a San Francisco storage unit can cost you $263/month, while an Austin storage unit can go for as little as $120/month. You’re likely to find more affordable rates in cities such as Phoenix, AZ, ($124/month), Cleveland, OH, ($110/month),) or Kansas City, MO, ($107/month).

Check out self storage prices in other cities too:

Now that your tiny house living basics are covered, an exciting new beginning awaits you. Let us know how your tiny house journey is going in the comments section below.


Mirela is a real estate writer and lifestyle editor for Yardi. With an academic background in English and translation, Mirela now covers a range of topics including real estate trends, lifestyle and economy. Her previous experience in proofreading academic articles has inspired Mirela to choose a writing career path. In her free time, Mirela enjoys reading, but also hiking and creating art. You can contact Mirela via email.

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