Bob's Tiny House Pipe Dream: February 2014

Monday, February 17, 2014

Berkeley's backyard tiny house adds income & affordable housing

Renting land for a tiny house

This is when to buck conventional wisdom. There are a lot of great books on being mortgage free. “Buy the best land possible with the least amount of money” is some advice often given. If you search the phrase “When NOT to buy land” or something similar, your effort would result fruitless. So I am writing the first article on the web EVER about when NOT to buy land. *disclaimer….I often exaggerate.

When we decided to get our tiny house, the first questions asked was “Where ya gonna put it”?”. Good question. I thought I wanted land. My own land. You are supposed to own land. So off we went to look. Here I what I found:

In our area, where I WANT TO LIVE, land is going for $15,000 to $30,000 an acre! Thank you Wal-Mart. 20 years ago my parents bought land for $500 an acre, 10 acres total. That land just sold for $15,000 an acre.

Our county requires a minimum of three acres per house if you want to build in the country.

debras tiny house video tour Tiny House Living: Renting Land Versus Owning Land

To build in the country, often there is no access to water, and you must dig a well. My parents water well cost them $10,000. Here is a good article I read on calculating the cost of digging a water well: Digging a Well, What You Need To Know

Sometimes the land does not perk. If you are fortunate, and it does, you have to put in the septic tank. This will cost between $3,000 to $7,000.

So here is the breakdown:

$40,000 minimum for land
$4,500 for septic tank
$6,500 for water
Electric hookup, this will vary depending on how far in you want your house. Up to $75.00 linear foot.
Property taxes. We paid $960 a year three years ago on a 2,000 square foot home.
Factor into all this our ages. My husband is 60, I am 45. I do not need land, I need savings. My son needs savings for his education.

These obstacles are not insurmountable, it is just that I do not want to exert that much effort when my real goal is to TRAVEL!

Now, this is what it ‘costs’ us to rent:

$125.00 a month. In the summer we rent for free, since the land we rent has a good garden plot, we are able to grow our own vegetables, saving at least that amount per month. So, in reality, we only pay about $80.00 per month, (possibly less) for space to park our home.
The next reason we do not own land is freedom. For this reason alone many people rent. You can pick up and go, not have to deal with selling your land. If I leave after three years (which I may. My ageing mother-in-law may need help, we have freedom to go), I only have ‘invested’ $3,000. If I sell my house and land (supposing I purchased), I will likely have to pay that much in closing costs and fees.
Property taxes – $0.00 Just because that is the way it is. The savings on property tax alone would pay a significant part of our rent.
Low overhead for our business. I split the rent between our business and our personal expenses. How many business rent a space for $40.00 a month?