Tiny house leads to Gen Y riches

Via Business Insider:

Ryan Mitchell, age 35, completely underestimated the positive impact moving into a tiny house would have on his life.

Mitchell, who runs the blog The Tiny Life and is based in North Carolina, told Business Insider he began building his 150 square-foot tiny house seven years ago. While he spent $US30,000 on building costs (including solar panels) over the first two years, he’s since netted more than six figures during the following five years.

“Even after accounting for the cost of the house, I’ve saved over $US100,000 going tiny, and it’s been a great experience,” Mitchell said. When asked about his savings strategy, he said: “It really was as simple as moving into the tiny house.”

Before moving into his tiny house, Mitchell, who previously worked in non-profits and human resources, was spending about $US1,500 a month on rent, utilities, insurance, and other standard living expenses. He said that most Americans spend 30% to 50% of their income on housing costs, including rent or mortgage, upkeep, utilities, taxes, insurance, cable, and internet.

“I knew if I could eliminate housing costs, I’d win big,” he added. “When people think about saving and budgeting, too often people try to ‘cut out the lattes.’ You saving $US4 on your coffee isn’t going to move the needle; you taking your rent from $US1,500-plus down to $US30 per month – that’s huge.”

Mitchell’s total living expenses right now are less than $US1,000 a month.

By reducing housing costs, Mitchell created a lower cost of living – ultimately putting more money in his pocket. He estimates that he has saved about half of his total income every month to reach $US100,000. But in addition to aggressively saving, he also used some of the extra money he shaved off his living expenses to start up a new business. He later sold that business, further increasing his income. He used the profits to buy his own land, he explained.

But creating and selling a business wasn’t Mitchell’s only source of income. Running The Tiny Life earns him a little more than enough to cover his monthly expenses and allocate about half of his overall monthly income to savings, he said, adding that he only has to work about five hours a week to meet all his bills, savings, and retirement needs, which gives him “a great lifestyle.”

Questions:

  • Where’s it parked?
  • Where will the kids go?
  • How far behind wider house prices has he fallen over the five years?
  • Did he lose all his friends as the social stigma of “trailor trash” took hold?

Comments

  1. HnH – it says he bought his block of land, kids (if he ever has them) would be problem space wise but then he could build another module …. but no, ‘trailer trash’ here in the US (especially in the South where I am) is a whole different demographic … all that said, it is possible to buy perfectly good houses here (in Alabama) for around $100k, or even less if you don’t mind older structures ….

    while housing here is booming, there is s shortage of ‘affordable’ category new housing – though did see an article last week highlighting DH Horton excellent profits as they aggressively expanded their ‘affordable’ brand developments. Tiny houses are a niche product here, but your underlying point is valid – why shouldn’t ordinary young people be able to buy a properly built and decent sized home without going into a lifetime of debt servitude ….

    feel very sorry for the younger folk back in Oz but remain totally puzzled by the lack of political action and protest ….

    • David, “younger” people here (less than 40 years old) have been “gaslit” their entire lives, especially on the issue of housing – they believe the insane housing system we have is normal and they actually generally believe what they have been told.

      Every time they have an inkling of something being awry they have been told to STFU, accept the system, stop “whining” (which, in Australia, is having a problem at all with anything), stop being a Snowflake (or contemporary equivalent) and get back on the treadmill.

      The generation legacy here is actually quite poor and toxic…..but “normal”.

  2. I’ve thought about buying a few acres, putting up a tiny home on the lot and that way not paying rent. I found about 5 acres 12 mins drive to last train stop for about $350k. Slap up a tiny home and then set about building a larger mudbrick home on the lot over a few years. Since I’d be paying no rent I’d be able to work less and focus extra time on building etc..

    I could blog about it on YouTube showing others how it’s done or make videos on how to do things on my cars for a passive income on YouTube.

    I’m sure Reusa would call me a looser for having such a hippie lifestyle and not a proper job, but maybe that’s ok?

    • Here’s the travesty. Those several acres outside the urban planners arbitrary boundaries, cost you a fair price per unit of land. In US cities that don’t have those arbitrary boundaries, the price of all land in the urban economy is suppressed so that land cost is a minor component of housing costs. A McMansion is $250,000 and a tiny house, fully serviced, is $40,000. Of course young Americans can get ahead financially with this kind of cost minimization.

      For young Australians, the tiny house is becoming the “only choice” and it is simply actually a “normal house” price – no real savings represented at all, just less of a loss to the gouge on urban land cost.

      • even in most of large US cities with urban boundaries one can find a block of land larger than 1/2 acre not that far from city for $50k
        has little to do with boundary and more to do with bubble ponzi financing

      • So you say the USA doesn’t have financing just as prone to goose urban land prices, as Straya? If you look at the circumstances of each urban area in the USA, you will find that there is sufficient regulatory freedom to convert land to housing, if the median multiple is around 3. When the median multiple is higher, there is a lack of such freedom in some way. For example, you might be ‘allowed to develop” but lot sizes must be 4 acres. This might as well be a Green Belt, for the practical effects on housing supply.

        The de facto boundary or green belt policy is often a lot harder to pick in parts of the USA because they don’t call it that. Often it is the “self determination” of municipalities surrounding a city, to “preserve their rural character”. The States that don’t have a housing affordability problem, have legal mechanisms to break through those barriers.

      • Dale SmithMEMBER

        Exactly Phil. He has only made a saving relative to his other housing options being too expensive. The real question is, if he could live in a larger house that cost him no more than what it cost and is spending now, would he.

        The research statistically says yes he would.

        The incentive to go smaller is generally driven by price, not because that is a better amenity choice.

        And as much as his tiny house costs, he is still paying too much.

        Personally I would prefer the better amenity at the lower price.

  3. even in the most expensive cities in N Carolina one can buy a nice house in a nice subrurb for $150k
    this is just fashion like expensive and uncomfortable shoes

    • Plus you get a great music scene, fun wilderness, myriad craft breweries, and a couple decent bookstores. But look here, Ryan only has tiny friends, five foot max, who fit ever so neatly into his tiny house.

  4. So the elites have so ‘splained to the plebs that:
    – multiculti GOOD
    – tiny homes GOOD

    Currently working an angle on:
    – traffic congestion (more time to listen to the ABC news/views)
    – lengthy hospital waiting times (make new friends while you wait – lots of them)
    – overcrowded schools (learn to work in large teams in a bustling environment)

    The future just gets better..

    • Funny how you didn’t complain about multiculti when the Greeks and the Italians landed here even though the culture is completely different from the English. *cough* because they are white *cough*

      Stormfront is that way boss 👉