Is it Good Business to Build and Sell Tiny Houses On Wheels in the USA? (Pros and Considerations)

Last Updated on July 10, 2023 By Emma W. Thomas

Building and selling tiny houses on wheels is a viable business in the US that can earn you a decent income in the long run. They are preferred due to their affordability, flexibility and are not subjected to building codes in some states. Besides, many customers like them due to their ease of managing with reduced expenses. 

Reasons Why Building and Selling Tiny Houses On Wheels is a Good Business Idea

Building and selling tiny houses on wheels can indeed be a good business idea in the USA. Here are several reasons why, supported by statistics:

• Growing Demand: The demand for tiny houses has been on the rise in recent years. According to a report by Research and Markets, the global tiny house market is expected to grow at a CAGR of 6.99% from 2020 to 2027. This trend is mirrored in the United States, where the tiny house movement continues to gain popularity.
• Affordability: Tiny houses offer an affordable housing solution for many people. With rising housing costs and increasing student loan debt, younger generations are looking for more cost-effective alternatives. According to the U.S. Census Bureau, the median sales price for new houses sold in May 2023 was $374,400, while the average cost to build a tiny house can range from $20,000 to $100,000, depending on the level of customization and materials used.
• Minimalistic Lifestyle: Many individuals are attracted to the minimalistic lifestyle that tiny houses promote. A survey conducted by the National Association of Home Builders (NAHB) in 2023 found that 69% of Americans would consider living in a house smaller than 600 square feet.
• Environmental Sustainability: Tiny houses are often built with energy-efficient features and sustainable materials. They require less energy for heating and cooling compared to larger homes. According to the U.S. Energy Information Administration, residential buildings accounted for about 20% of total energy consumption in the country in 2023. Tiny houses can help reduce energy consumption and promote sustainable living.
• Mobility and Flexibility: One of the key advantages of tiny houses on wheels is their mobility. They provide the opportunity for homeowners to travel and explore different areas without sacrificing the comfort of their own home. This mobility factor appeals to digital nomads, retirees, and adventure seekers. The flexibility to move the tiny house can also be advantageous in cases where individuals frequently relocate for work.
• Innovative Market: The tiny house market is relatively new and innovative, providing opportunities for creativity and unique designs. This sector allows builders and sellers to showcase their craftsmanship and differentiate themselves in the market. By offering customized and well-designed tiny houses, businesses can attract niche customers looking for something unique.
• Tourism Potential: In addition to selling tiny houses, there is potential to tap into the tourism market by renting out these homes on wheels. Many travelers are interested in experiencing the tiny house lifestyle for a short period. According to the RV Industry Association, RV and camping vacations in the U.S. generate an economic impact of over $114 billion annually. Tiny Houses on Wheels can cater to this market and generate additional revenue streams.

How to make money from tiny homes?

Is it possible to make money out of tiny houses? Well, the answer is yes. Below are several ways you, as an investor, can make a respectable amount of money in the tiny house market. 

Rent those houses traditionally 

You can get money from your tiny house by leasing or renting it out to tenants. When you purchase or build a small house, you should consider making it a rental property to create a source of income for yourself. 

This offers you a reasonable return on investment- depending on where it’s located.   If you want to make considerable progress in this business, make sure you invest in an area with high demand for this kind of real estate property. As a result, you can effortlessly get a tenant, and perhaps the rental rate will be decent.

Before you rent out tiny houses traditionally, it’s good to understand that it’s not fit for everyone. For example, a tiny house that works for one person would not work for a big family. Thus, it would help if you were true about the tenants you will accommodate in your rentals. Otherwise, you will rent to someone only for them to realize that tiny houses aren’t fit for them, leaving you with an empty rental. This way, you will not generate income. 

Rent out to individual on vacation

Whereas purchasing or building a tiny house on a wheel and turning it into traditional property is a decent investment plan, renting it to individuals on vacation is even better for most real estate investors. Nowadays, tourists prefer to stay in non-traditional houses rather than lodges, RVs, or hotel rooms throughout their vacation since it gives them a unique experience. So, if you are planning to start an Airbnb business to vent into real estate and earn more income, tiny vacation houses are the best thing to consider. 

You need to research and know what is desired in your area before venturing into this business. Certain cities in the US have stringent regulations concerning what kind of real estate property can be rented out on Airbnb and similar establishments. Also, there might be a limit on the period one can rent out to a short-term guest. With such regulation, the money you get from your Airbnb rental is affected. So, it’s essential to know which cities in the US will suit your plan.

Rent the land 

You can buy land and rent it out to tiny house investors. This will enable you to earn monthly income and thus, makes quick proceeds. If you are an investor in those tiny houses built on wheels, you can rent the land where your property sits. 

Tiny Rv camper house/ Apartment to-go

If you lack enough space to store your tiny home or space to take it around, you can rent it out to individuals who have both. The individuals who rent it should care for it on their property or at the campground. Do a background check on the tenant and connect a GPS locator to the trailer. This will guarantee you the security you need.

Flip them for profit 

The media have excited tiny houses, and as a result, it has opened investment opportunities for house flippers. Flipping real estate has become the desired strategy for getting more money in real estate, and many people are venturing into it. Though, housing obtainability is decreasing- which can be equally good or bad for flippers. This shows that while flipped houses will sell faster, they are harder to get. Therefore, house flippers have opted to be more innovative in discovering investment properties. That is why many have decided to flip tiny houses. 

There are two means of flipping tiny homes. The first is to buy a small house, renovate it, and then sell it for the proceeds. There is no doubt you will get a lot of buyers given that the demand for tiny houses is higher. The second way is to purchase a movable home park and turn it into a tiny house. This will increase the value and demand of the park; hence you can sell at a large profit margin. 

Transform it to be a backyard office

You can opt to transform your tiny house to be a backyard office. This will allow you to work from home and keep your family life and profession separate. As well, you will protect your vehicle from wear and tear. 

Moreover, you can rent it to serve as an office and earn some income. 

Long-term backyard rental

Instead of renting your tiny houses to short-term tourists, you can opt to rent out for long-term individuals. This way, you can generate a steady income for yourself. Long-term tenants can be college students or in-laws.

Advantages of starting a tiny house building business

 Flexibility 

With skills and experience, there is no doubt you can do a lot of business stuff with your tiny house. You can rent it out and use it as your office. So, it is flexible for different kinds of businesses. What makes it even more impressive is that you can easily manage independently. 

You are likely to have a lot of customers

With the current positive trend of tiny houses on wheels, there is no doubt customers will invest in your product. This way, you will generate profit from it. 

Limitless income potential 

Venturing into the tiny house-building business is a good thing as there is no limit to how much income you can generate. If you have stronger business skills and put more effort into your profession, you will make more money. 

Outcomes and revenue happen faster!

Unlike other businesses, starting a tiny house business is simple. This is because it’s relatively cheap, and you can quickly build it yourself. So, many investors find it easy to start and run, thus seeing results and revenue faster.

Gain experience and exposure

The venture allows you to acquire a lot of experience working for various businesses, which will enable you to gain exposure. 

You can take control of the workload

Unlike other businesses, the tiny house-building business enables you to choose how many tasks you want to undertake. You are the one running the venture, and it’s upon you to decide how you will work. With such freedom, you can turn down projects you are not interested in and focus on those you want to work on. 

Foreseeable income stream

With a small house-building business, you can easily predict your income provided you know the number of clients you have signed up for. This makes your financial planning a bit seamless. 

Travel opportunity 

With a small house-building business, there is no doubt you will have many travel opportunities. You will be required to travel and market destinations you settle on. 

Things to take into consideration before investing in a tiny house 

The regulation set for tiny houses 

If you plan to build a tiny house, know that state and local governments have building codes to be adhered to by small homes built on a foundation. Tiny dwellings constructed on the foundation must meet the exact requirement of big residential dwellings. For instance, you may be required to have prepared land for building, have a permit, order inspection, etc. So, it is good to always check the codes for tiny houses in your area before building them.

Whether they appreciate it with time

A tiny house constructed on the wheel isn’t considered real estate. They are considered mobile personal property like RVs and cars. So, they depreciate with time, unlike traditional investment property. Put this info into consideration before venturing into the business. 

Stiff Zoning Regulations 

Apart from building codes, several cities in the US have zoning regulations concerning tiny houses, which can be stiff. Some need you to have land where you wish to construct and rent out tiny houses. So, it’s always good to check out the zoning regulations before venturing into the tiny homes business. 

Final Words

The tiny homes market is constantly growing due to the demand for such structures and is, therefore, a good investment option. You only need to put in the hard work required to succeed and be profitable in any business. Do a lot of research about regulations and zoning laws in your state of interest to avoid being on the wrong side, leading to losses.

References:

https://www.homestratosphere.com/tiny-home-profit-margin/

https://howtostartanllc.com/business-ideas/tiny-house