Top 5 Problems with Tiny Homes (And How to Fix Them)

Top 5 Problems with Tiny Homes (And How to Fix Them)

It’s easy to get excited when jumping into a new investment, but there can be some problems that arise with purchasing or building tiny homes.

Even with tiny homes growing and becoming more popular, there are still many rules and regulations, from financing to choosing your builder or where to put the house.

Here are the Top 5 Problems with Tiny Homes and How to Fix Them.

Financing

Problem #1 with tiny homes is getting financing.

Since most tiny houses are under 400 square feet, most banks will not do a loan for a 30-year mortgage. Instead.

You may need to consider a personal or RV loan.

Personal Loans

Personal Loans usually have a length of 7 years to pay off and have an interest rate of 3% to 36%. They also require good credit, and the payments are higher due to the shorter life of the loan.

One benefit of personal loans is that banks don’t hold anything for collateral. This type of loan is an excellent option for tiny homes with foundations.

RV Loans

If the tiny home will be on wheels (THOW) and will not be placed on a permanent foundation, it will likely qualify for a 20-30 year RV loan with an interest rate of around 4%-8%.

To get an RV loan, the tiny home will need to be inspected and approved by the U.S. Department of Transportation’s National Highway Traffic Safety Administration to get an RVIA tag (Recreational Vehicle Industry Association).

Zoning and Permits

Understanding the zoning and permitting laws surrounding a tiny home is essential.

Each state has different laws, sometimes even down to the county, so make sure to do the research. If the tiny home is on wheels, there might be laws around how long it can be occupied on a specific property type. However, if the house is on a foundation, it will need to abide by standard housing regulations.

Texas is one of the most open-minded states for tiny homes, for those attached to a foundation and on wheels. As tiny houses become more and more popular, other states are jumping on board.

To avoid any problems with tiny homes and the location, do research in the area before purchasing to make sure it meets all the guidelines.

Ventilation

Ventilation is a problem that is often overlooked with tiny homes, especially when they are DIY built.

Due to the space inside of a tiny house being so small, the oxygen in the home doesn’t have as much room to move around. Ensuring that there is proper ventilation in the home can reduce the risks of black mold by reducing dangerous humidity levels and overall indoor air quality.

Getting Good Airflow

One way to ensure good airflow in the tiny home is to crack windows when cooking, using propane or kerosene heaters. This allows for oxygen flow, reducing the risk of deadly levels of carbon monoxide and other toxic gasses.

On cold days, tiny homes often experience high condensation levels, which can transfer into black mold, so ensuring the home is adequately vented will help reduce the humidity. Also, providing proper airflow under the mattress, which can be done by keeping the bed off the ground or using an air condensation mattress underlay.

TIP: Make sure to have carbon monoxide detectors to reduce carbon monoxide risks.

Selecting a Tiny Home Builder

As the tiny home trend continues to grow (one builder has seen a 200% increase over the past several years), more builders are joining the market. For the tiny home to see a 50-60 year life span, it’s key to be confident in the company building it.

Understanding the materials they use, if the home can be customized, what kind of warranty the builder has, etc., can make a big difference in how long the investment will last.

Using materials like SIP panels to allow for proper insulation and ease of maintenance and pressure-treated wood are just a few of the items that we recommend.

We’ve put together a list of questions to take with you when talking to a builder!

Choosing a Tiny Home Community

Finding a community of tiny homes with the best amenities can be a way to avoid problems that often arise with zoning and regulations.

These communities have already done hard work to get the location approved.

Some communities have tiny homes already placed on lots for sale, or you can choose a model to be placed on a lot. Others have spaces available for rent, which is perfect for those wanting to move their tiny home to different locations.

Most of the communities we’ve found in Texas have some incredible amenities such as a swimming pool, garden, laundry facilities, gyms, and more.

Tiny house communities can be an excellent option for those looking to live alongside like-minded people!

Choosing a Builder

Even with the problems that tiny homes can come with, there are ways to work around them and still enjoy the life of tiny living or create a profitable business such as an Airbnb rental.

We hope that we’ve provided some excellent guidance to help you along the way.

Turn Key Fabrication takes pride in making sure our customers are 100% satisfied with their build and purchase, so contact us today so we can get you started!

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Tiny House Financing & Insurance

Tiny House Financing & Insurance

Even with the spike in tiny house purchasing across the United States, the process of financing and securing insurance for said homes is still misunderstood.

Locating financing and insurance is a step that you won’t want to skip when looking into investing in a tiny home, along with researching the builder.

Financing Options Broken Down

A traditional 30-year mortgage is unlikely for a tiny home since they generally cost between $30,000 and $80,000. The best avenues to research are looking into a personal loan, a home equity loan if this is a secondary residence or investment property, or financing through a lender partnered with a tiny house builder.

It’s important to ask questions about what the lender will require when researching which loan is best:

  • Does the loan require a permanent foundation?
  • Is there a square footage requirement?
  • What are the minimum and maximum amounts for financing?

Personal Loan

These loans are typically unsecured, meaning the bank doesn’t hold anything for collateral. A personal loan has an annual percentage rate between 3-36%, with good credit. Personal loans usually have a length of seven years to pay off.

Builder Financing

Some builders can offer in-house financing for tiny homes.

In-house financing is done through a builder’s partnership with a third-party lender, so requirements and qualifications will vary.

RV Loans

Purchasing a THOW (Tiny Home on Wheels) opens up the option of an RV loan since it won’t be placed on a permanent foundation and can be moved around.

The Tiny Home will need to pass an inspection to prove it meets the standards set by the U.S. Department of Transportation’s National Highway Traffic Safety Administration and get an RVIA tag (Recreation Vehicle Industry Association).

One benefit of an RV loan is that they are often financed for 20-30 years so that the payment will be smaller than a personal loan.

RV loan rates are also lower, usually around 4%-8%. A con of this type of loan is that the tiny home will be used as collateral for the loan, so if it is defaulted on, the tiny home can be repossessed.

Financial Company Options

Lending Club

Estimated APR 6.34% – 35.89%

Loan Amount $1,000 – $40,000

Minimum Credit Score 600

SoFi

Estimated APR 6.99% – 22.28%

Loan Amount $5,000 – $100,000

Minimum Credit Score 680

LightStream

Estimated APR 4.99% – 19.99%

Loan Amount $5,000 – $100,000

Minimum Credit Score 660

Operation Tiny Home

Operation Tiny House is a matching grant program, which could be up to $12,000 of the down payment.

To qualify, someone in the house must be a community hero or struggling with hardship. Check with Operation Tiny Home to see if qualifications are met or get on the waitlist for the next round of grants.

Examples of past Grant Qualification includes:

  • Military / Veteran Status
  • Law Enforcement
  • Fire Fighter
  • Pre-K – 12th Grade Teachers
  • Lives in an area affected by hurricane, wildfire, flooding, or other natural disasters
  • Aging out of Foster Care

Insurance

It is essential to secure proper insurance on a tiny house like any home.

Natural disasters and other tragedies (fire, flood, vandalism, etc.) are always a possibility, it’s essential to make sure the investment is covered.

There are a few options to obtain insurance:

RV Insurance

If financing the tiny home via an RV loan, this would be the best bet for getting insurance. RV Insurance is also great if your tiny home is on wheels and will be moved frequently. Extra insurance coverage that is included with RV that isn’t from traditional insurance are:

  • Collision
  • Comprehensive
  • Liability
  • Uninsured Motorist
  • Personal Property
  • Medical Payment

Mobile Home Policies

Mobile Home Insurance is an excellent option if the home will be on a foundation or rarely moved.

A comprehensive mobile home insurance policy, similar to homeowners insurance, will cover:

  • The Home
  • Personal Property
  • Liability Claims

If this route is taken, get a transit endorsement, so the tiny home is covered while transported.

Tiny House Insurance Specialists

With the tiny home boom that keeps growing, we will likely see more and more tiny house insurance specialists come on board.

Insurance Specialists usually offer coverage for traditional and alternative living structures, such as off-grid cabins, micro homes, storage containers, and Tiny Homes.

Insurance Company Options

American Modern Insurance Group

American Modern Insurance Group offers tiny home insurance as part of its manufactured home policies. They generally cover liability, personal property, water damage, and more.

American Family Insurance

American Family Insurance covers everything someone would need insurance for – life, business, homeowners, and auto. AFI can help find the right category for insurance coverage on your tiny home with their different policy types, including RV insurance and manufactured home coverage.

State Farm

If the tiny home is in the purchaser’s backyard, State Farm is an excellent option. They can add coverage with standard homeowners insurance and list it as a detached dwelling.

Foremost Insurance Group

Foremost offers specific coverage for tiny homes for full-time tiny home dwellers. Insurance is available through its Travel Trailer Program if the tiny house meets RVIA standards or is certified by NOAH (National Organization for Alternative Housing).

Liberty Mutual

If the tiny home will be an investment property, such as an Airbnb, Liberty Mutual is a great option to look into, with options for short-term rental coverage as well as mobile home insurance. Liberty Mutual builds the insurance policies to fit each individual’s needs so that you can add on to the policy as necessary.

Taking the Next Steps

At Turn Key Fabrications, our passion is helping you customize your tiny home, and that includes financing and insurance.

Contact us today, and let’s get started!

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Can you Customize a Modular Home?

Can you Customize a Modular Home?

A question we get asked all the time- can you customize a modular home? The answer is yes! A modular home is not the same as a mobile home and can be fully fit to meet the individual needs of the buyer.

For many people, it’s exciting and desirable to customize their own home. Choosing your layout, finishes, and foundation attachment can be important when deciding which builder you want to move forward with. Customization can make your home feel truly unique to you! Since modular homes are built off-site, it allows you to have more control over the ultimate build.

Designing a modular home or tiny home is a great option that also makes for a solid investment. Read below to find out more details on how you can build the modular home of your dreams.

Interior Trim

When choosing your interior trim, remember that this is what you will see most often since you’ll ultimately be inside your house. You want to make sure you love what you see daily. You can customize the flooring and countertops, and you can also choose the fixtures such as sink faucets and lighting.  

You can also customize for natural disasters such as fires and hurricanes with a modular home. You want to ensure that the best type of insulation is used for the climate of your unique house.

At Turn Key Fabrication, we offer tiny rooms! This is an excellent option if you already have a home but are looking for a space with a specific use, such as an art or yoga studio, or guest bedroom.

Exterior Trim

Never underestimate the power of trim. A curbside appeal can play a big part in your decision on how you want the exterior of your home to look. Not only so that you are happy with the look of your home, but looking ahead for planning about resale value. 

Exterior customization can be about how many windows you want around the house if you want a front or back porch, or what type of patio you may wish to. A wide variety of siding and trim packages can be selected based on the environment of your home and your price point. You can also choose what kind of siding you’d like and your roof style.  

Energy Efficiency

Energy Efficiency is a big topic these days. With people wanting to get smarter about the energy they use for power and heat, many alternatives are available now.  

A great way we have discovered to help keep energy costs low is with Structural Insulated Panels (SIP). These lightweight, self-supporting, energy-efficient panels can be used for walls, floors, roofs, foundations, and basements.  

Because of the material used in SIPs, they are estimated to be up to fifty percent more energy efficient than traditional wood framing. They are air-tight, maintain excellent indoor air quality and help with heating.  

Check out more information on the SIP panels we use here.

Layout

Layout options with modular homes are endless. When you contact a builder, they’ll generally have a few layouts to get you started. Then you can discuss your individual needs with the builder and make changes as you see fit. Maybe you’d like to add or subtract rooms, make rooms larger or smaller, and add windows or patios. All of these options are available when building a customized modular home.

If you are looking for a tiny home, our Turn Key Tiny’s are a great option. They are designed to be fully livable structures with bathrooms, kitchens, and anything else a typical house may have. Check out more details on our website.

With or Without Wheels

Most modular homes are built and then fixed to a solid foundation.

For others, having a home that can move is the ultimate goal. This is where tiny homes come into play. Tiny houses can be attached to trailers to be moved often (or they can be fixed to a solid foundation if you choose). Depending on the lifestyle that you’re after, you can customize your home to be mobile or fixed. 

Get Started

Your dream home doesn’t have to be out of reach. A modular home is a great option to customize your home and pick your style and details. Turn Key Fabrication would love to help you design your custom home today. Send us a message for answers to all of your questions and free quotes on custom modular homes and rooms.

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