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How to Buy a Tiny Home Online

Buying a modular home online is a great option if you are considering purchasing an accessory dwelling unit but do not want to go through the process of building it. This is because prefabs are remanufactured in separate sections off-site, then assembled on-site. Additional benefits include a fixed cost, faster construction within a fixed timeline, architect grade design, and increased overall value of your property when it’s time to sell it.

Rules and Regulations to Consider

Before beginning your search for a prefab home, you should make sure you know what your city code and HOA allows. Your city code will list what setbacks, number of stories, and square footage are allowed, as well as stylistic regulations in your neighborhood for historic preservation.

A homeowners association (HOA) is an organization that creates and enforces rules for residents within local communities or condominiums. HOAs are comprised of local residents and a board of directors who oversee and enforce the rules and regulations, which are usually listed in a document called the Declaration of Covenants, Conditions and Restrictions (CC&Rs).


Another thing you need to know before looking for a prefab home is how you will choose to finance it. A renovation loan consists of both the purchase price and renovation costs combined. This is especially helpful if you’re struggling to find an affordable home, because it is generally less expensive to buy and repair a worn out and outdated home.

An FHA 203k loan is funded by the Federal Housing Administration, and you can choose either a limited or standard loan. The limited loan is for renovations that don’t require major changes in the construction process and cost $35,000 or less.

Standard 203k loans are for renovations that cost over $35,000. A standard loan also requires that you receive help from a HUD consultant which will most likely be an architect, inspector or contractor.

Homestyle loans are another option, with minimal restrictions on construction other than requiring that your tiny home should be permanently attached to the main home. If you have home equity, meaning the market value of your home is higher than your mortgage, you may be eligible for a home equity loan. The loan amount is determined by the difference between your mortgage and your home’s market value.

Homeowners must also calculate return on investment. ROI helps you measure how much profit you will gain from an investment (such as a home) in comparison to the initial cost. This will help you decide whether the investment is the right choice for you.

Searching Online

When searching for prefabs online, don’t forget to verify the manufacturer before picking a tiny home. You can verify them by looking up reviews on websites like Facebook and Houzz, and learning more about past projects they’ve done.

You should also make sure you know the true cost, by getting an estimate that includes site analysis, permits, transportation, and site prep.

In order to make sure you found a tiny home that you certainly want in your backyard, drive or fly to the city in which the factory is located to see the model in person so you can get a feel of the layout and materials used to build it.

Optimizing Your Tiny Home

Renting out your prefab is a great way to earn passive income as long as it generates more income than expenses. Even rental income that’s only 1% of your property’s total value ($350,000 home = $3,500/month in rental income) can add up to a large sum of extra money. If you want to rent out your prefab through Airbnb for example, consider a two bedroom if that’s a viable option because it will increase your reach for potential renters.

A prefab tiny home can also be used to house elderly loved ones as a cheaper alternative to elderly homes. If you don’t have enough room in your home for an office studio, a prefab can give you the extra space you need. Having an office within your prefab canal so make you eligible for tax tax deductions.

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About the Author
Stephanie McQueen
Stephanie McQueen
Stephanie is the content curator and resource hoarder of all things tiny houses. She believes everyone can live a sustainable lifestyle, no matter the size of your house. Connect with Stephanie through LinkedIn or her done-for-you branding agency, Employed By Life Online.
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