If you're looking to downsize your living space and expenses, a tiny home might be a great fit for you. Many of them come with energy-efficient features, beautiful, modern designs and are in areas you want to be.
However, there's another side to that coin: They're much smaller. So even if you plan to downsize, it's important you have enough space devoted to the things you need like storage.
How big is a tiny house?
While there isn’t a standard size, tiny houses are usually between 100 and 400 square feet and rarely exceed 500 square feet. By comparison, the median size of a new, single-family home was 2,480 square feet, according to Bankrate.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
How much do tiny houses cost?
The average price of a tiny home is about $30,000 to $60,000 versus the average price of a normal-sized house, which is $419,200. However, location, size, customization, furnishings, zoning laws and home insurance costs are all factors that can drive the overall price of a tiny house higher. Whether you buy a pre-existing tiny house or build one from scratch plays a role in the pricing too.
Why live in a tiny house?
Tiny houses are cozy, energy-efficient, vertically and horizontally-challenged and wildly popular — and the interest in them is only gaining momentum. Still, the price and the experience of living in one can vary widely depending on many factors, including location.
So which states are the best for tiny house living? Here are the ten best (and ten worst) based on the LawnStarter survey.
10 best places for tiny house living
| Rank | State | Overall Score | Legality Rank | Urban LIfestyle Rank | Remote Lifestyle Rank |
| 1 | Vermont | 89.07 | 1 | 2 | 15 |
| 2 | Kentucky | 85.34 | 1 | 14 | 3 |
| 3 | Arkansas | 84.60 | 1 | 5 | 16 |
| 4 | Maine | 83.80 | 1 | 4 | 20 |
| 5 | Minnesota | 78.32 | 1 | 21 | 4 |
| 6 | Montana | 76.39 | 1 | 18 | 10 |
| 7 | Alabama | 74.45 | 1 | 6 | 28 |
| 8 | Georgia | 73.40 | 1 | 12 | 23 |
| 9 | Texas | 72.91 | 1 | 39 | 2 |
| 10 | Kansas | 70.35 | 1 | 37 | 7 |
10 worst places for tiny house living
| Rank | State | Overall Score | Legality Rank | Urban Lifestyle Rank | Remote Lifestyle Rank |
| 41 | Maryland | 42.94 | 1 | 38 | 47 |
| 42 | Nevada | 36.74 | 1 | 50 | 45 |
| 43 | West Virginia | 43.31 | 4 | 9 | 21 |
| 44 | Iowa | 43.16 | 4 | 28 | 1 |
| 45 | Wisconsin | 40.60 | 4 | 17 | 14 |
| 46 | North Dakota | 37.16 | 4 | 32 | 8 |
| 47 | Louisiana | 35.49 | 4 | 15 | 25 |
| 48 | Alaska | 29.31 | 4 | 7 | 43 |
| 49 | New York | 14.31 | 4 | 35 | 41 |
| 50 | New Jersey | 5.27 | 4 | 43 | 50 |
Key Findings
- Vermont (No. 1), Arkansas (No. 3), and Minnesota (No. 5) offer the most ideal conditions for compact dwellings.
- Eight states ban tiny homes or at least require very strict guidelines. They are Alaska, Iowa, Louisiana, North Dakota, New Jersey, New York, Wisconsin and West Virginia.
- Iowa (No. 44) leads all 50 states in off-grid lifestyle-friendliness.
- Tiny homes can cost as little as $15,000, according to Realtor.com
Thinking about downsizing?
If you think tiny house living is the right lifestyle for you, there are several questions to ask yourself.
- Are tiny houses illegal in my state?
- In your state, is there a minimum or maximum size for a tiny house?
- How much does the average tiny house cost?
- How do you finance a tiny house?
- Can you insure a tiny house?
- Can you buy a tiny house or do you have to build a tiny house yourself?
- Can you truly live off-grid in your tiny home?
- Where can you store all your stuff?
- Are tiny houses a pathway to financial independence/early retirement?
Reducing your carbon footprint
Tiny homes won't take as much energy to heat and cool because of their size. On average, a tiny home consumes 3-4kW of power daily, whereas the average home can consume between 26-33 kW, according to Ecobee.
Size alone isn't the only benefit you'll receive with tiny homes. They feature smaller appliances, placing less stress on the overall energy infrastructure. And many come with smart home features, like smart thermostats to make it easier to manage energy usage.
The bottom line
Tiny homes offer an affordable and cozy alternative to traditional homes. Before considering one, make sure you live in a state that allows them. Also, it's ideal to factor in any challenges that might arise from less space, such as fewer storage options and not as much private space. Overall, tiny homes offer a ton of advantages for homeowners looking to downsize and save on home and energy expenses.
Related Content
-
Markets Are Quiet Ahead of Fed Day: Stock Market TodayInvestors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
Quiz: Test Your Knowledge of the OBBB, Wealth Transfer and Early RetirementQuiz The financial professionals who contribute to Kiplinger's Adviser Intel recently wrote about the OBBB's impact on retirement, how to ensure your wealth passes to your family and early retirement questions.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
I'm 57 With $4.1 Million and Plan to Retire Abroad in a Few Years. Can I Stop Contributing to My 401(k)?We ask financial experts for advice.
-
I'm an Investment Strategist: This Is How the Fed's Next Rate Move Could Impact Your WalletInterest rate cuts might be coming, which could affect everything from your credit card debt to your mortgage. It's smart to prepare now — here's how.
-
Can You Afford a Million-Dollar Home on a $250,000 Salary?It’s more than the sticker price — mortgage rates, down payments, taxes and debt all factor into whether a million-dollar home fits your budget.
-
Why a Landmark Real Estate Commission Settlement Hasn’t Lowered Costs for HomebuyersThe 2024 NAR settlement promised commission transparency and negotiation —but one year later, average fees remain unchanged. See why change has been slow and what it means for homebuyers and sellers.
-
I'm 65 and My Property Taxes and Insurance Keep Going Up. How Can I Afford My House in Five Years?The costs of homeownership may continue to rise in retirement. Here's how to manage that.
-
The Risks of Forced DST-to-UPREIT Conversions, From a Real Estate ExpertSome new Delaware statutory trust offerings are forcing investors into 721 UPREIT conversions at the end of the hold period, raising concerns about loss of control, limited liquidity, opaque valuations and unexpected tax liabilities.
-
Lock or Float? How to Decide on Your Mortgage RateMortgage rates move daily, here’s how to know if you should lock in a rate now or let it float until closing.
