Monday, August 24, 2020

Pros and Cons of Owning in a Tiny House or ADU

With more local jurisdictions allowing small dwellings on properties that used to be zoned only for one dwelling, many people are jumping in with both feet for a variety of reasons and putting Tiny Houses and Auxiliary Dwelling Units on their land.

As with all things in life, there are Pros and Cons to adding another dwelling to your existing home’s backyard.

Auxiliary Dwelling Units


  • Extra income. It's a great source of income. 

  • If you sell, it should add value to your home.

  • More usable space for a Workshop/studio space/home office

  • An extra guest suite for visiting family and friends

  • Permanent living space for In-Laws or an older child


  • Losing basic storage if you convert a garage

  • Responsibility of being a landlord

  • Cost of construction is high because the expense stuff like kitchens and bath are in a much smaller area.

  • Usually has to be inspected several times during construction and may require it to be built to tough building codes

  • Might need to be removed if property is not zoned for ADU

Tiny House Pros and Cons


  • Spend less money on energy as solar panels can be mounted to the roof.

  • Great for empty nesters and young singles and couples without children living at home.

  • It would cut down on all the junk that one accumulates.

  • A energy efficient single split Heat/AC unit would be ideal.

  • Cleaning the house would be easy and quick.

  • They are relatively inexpensive.

  • They would encourage a more active lifestyle.


  • Lack of storage space

  • Need special furniture that works well in a small area.

  • Entertaining would be tough, especially in the Winter

  • Tough to cook if both of you

  • No dishwasher but dogs make a great prewash cycle

  • Lack of privacy

  • They are vulnerable to extreme weather.

  • Finding land to set up the homestead

  • Tough to get a mortgage. It would have to be a personal loan.

  • Zoning and Codes restrictions

  • Your friends might not approve

  • Selling the tiny house at a big loss when ready to move up or out.

Even with all the CONS listed for both, it appears the PROS are winning out as attested to by all the new modular factories popping up across the country to meet the demand. 

In an earlier post about ADUs, Bill Murray, a well respected consultant in the modular construction industry, commented on a modular factory that’s available for building ADUs. 


“I read with great interest several articles that you have posted recently regarding the viability of ADU’s for modular production. Although there are challenges in mixing these units online with standard single family or commercial production, they can in my opinion be an additional market for the right manufacturer to develop. This Covid situation is without doubt reshaping the way we work, relax, and play……ADU’s other than those used as primary living units can be a plausible answer.

As an aside I want to also pitch an opportunity for any entity looking to enter the off site construction industry. I am assisting in the sale of a long time established modular manufacturing facility. It is not a distress sale by any means. It is an asset sale so there is no inflated value typically associated with intangible assets, added to the asking price. 

The asking price reflects the value of the assets and the excellent reputation that has been built is a free addition. Owners will consider leasing the facility and equipment (which is all in excellent condition). Having been in the industry for over 40 years I believe this to be an excellent value and one that is ready to produce immediately. ADU’s would be ideal considering the plant proximity to major metropolitan markets.

Interested parties should contact me via email: for more info.”

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