The Tiny House movement has proven that regardless of the initial setbacks, this is becoming a normal way of life for thousands of people. Yet one of the burning questions still on people’s minds is — is owning a tiny home in Canada considered a real estate asset? In an economy that relies heavily on the success of real estate investing, coupled with a housing crisis faced by Generation Squeeze, we wanted to take a closer look at this question. The answers came when we learned about a building company in Ontario called GreenTerra.
Established June 2012, Green Terra Homes (GTH) is the first and only CWB CSA certified steel frame home factory in Canada. They are also one of the few facilities in Canada with multiple CSA Certifications for the production of RV Homes, Mobile Homes, Modular Homes, Park Model Homes (tiny) and prefabricated kit homes. This means that they offer the perfect variety of models for comparison when considering real estate assets.
In terms of resale value tiny homes are essentially treated like RV’s and cars. That is — as soon as the leave the lot, they depreciate in value. In this sense they don’t compare to traditional homes which generally retain or increase in value. However that is only the current scenario and as we’ve seen; things are always changing as bylaws, zoning and regulation open up.
Looking closely at GreenTerra we learn a few things. Firstly — they offer an RV Series Tiny Homes , small prefab Tiny Homes that are complete QAI Certified to CSA Z240 RV standards, meaning that they provide the highest level of security as far as getting insurance, loans and finding a place to park your tiny home.
They also build with steel frames — lightweight steel is 100% recyclable and the most recycled product in the world. Steel frame homes are unaffected by humidity or temperature changes which make them energy-efficient, resulting in money saved on fuel costs. It takes six recycled cars to build one steel frame home (vs. 40-to-50 trees to build a timber home), and steel does not absorb moisture so it will not rot or grow mold. Their tiny homes also come with optional features such as porch, deck, landscaping, live roof, solar & wind power, gray water recycling, composting, atmospheric water generator (AWG) and other green features.
Prices for these tiny homes range from about $42, 000 and up.
All of this said; tiny homes are still not treated as traditional homes, meaning that their resale value decreases once they are off the lot.
Manufactured Homes- A Comparison.
The Canada building code (section 9) requires that a “home” be a minimum 400sq ft in size. On top of this, in order to keep their tax base up — most municipalities require additional square footage (of heatable space, not including walls). In that sense, tiny homes will not generally be accepted by local municipalities and this is why there is so much push to change these regulations and to adapt Tiny Homes so that at some point, there is a meeting point where Tiny Homes are accepted. Until then there are several alternatives:
1- As explained in our Resources Section, one way to get around this is to add a heatable wrap around patio that increases the square footage of livable space. Cooperation is always best when you want a Tiny Home in an urban area.
2- You can always take your chances and live in a tiny house that doesn’t meet local municipal regulations — thousands of people in Canada and the US already do this. Because of the community support and the mobility of tiny homes, for them the lifestyle benefits outweigh the hassles.
GreenTerra Homes not only manufactures Tiny homes, but they also offer another solution that does retain and/ or increase in value. These are called their manufactured homes (they used to be referred to as mobile homes).
Manufactured Homes are considered a viable alternative for those looking for long-term investments because they meet the Canadian Building Code.
The steel frame Manufactured Home Series ship complete and are built to far exceed CSA Z240MH standards. They are available in sizes from 10′ to 16′ wide and from 40′ to 76′ in length and offer from 1 – 5 bedroom models, including options for all appliances including washer/dryer, full 3 piece washrooms with shower/tub combo, along with all the necessities of home at affordable prices. If you ever want to increase the size, you can purchase addittional modules for the home.
Like their 24ZO Tiny Home models they also have removable axles and tongue. They also come on a steel frame chassis which means that you won’t need a crane, instead simply drive it to your property and just lower it down onto your pad. The Z240MH meets all the requirements of a standard home as per the national building code (part 9), and they can be built as small as 400 sq ft. The home leaves the factory with its own red I-beam chassis which can be placed onto posts meaning that you don’t need to build a foundation.
Compared to their Tiny Homes — the manufactured homes from GreenTerra are more spacious, allowing for additional features. They also include builders standard kitchen cabinets, standard plumbing fixtures, standard laminate flooring throughout, tile in kitchen and bath, standard energy efficient windows & doors. They are backed by a 25-year structural warranty program against any manufacturers defects.
Cost and Investment Analysis
As far as the housing industry in Canada (and related codes and regulations) — if you are looking to build an asset than a manufactured home like the Z240MH Manufactured is the way to go. The folks at GreenTerra say that on average, the typical homeowner/ builder can expect an average about 40% equity on these homes.
Building costs are also lower on the Z240MH, with an average of under $100/ sq ft compared to $175/ sq ft and up for a Tiny House. And if you purchase the 400 square foot model you are only increasing the size of a Tiny House by about 160 sq ft — and the unit is still mobile.
With more square footage than Tiny Homes, these are considered an “actual” house and therefore they are treated like a traditional home in the real estate market.
For Modular, Manufactured, Park Model, Tiny, Mobile, and RV homes, Green Terra Homes ships a complete, finished home that is built in a climate-controlled factory. This includes electrical, plumbing and ventilation work, insulation, drywall, installation of doors, windows, interior trim, kitchen cabinets, bathroom fixtures, light fixtures, furnace, and heat recovery ventilator (where applicable). All appliances and furniture that may have been purchased as optional cost items are installed in their factory prior to shipment. Their team of engineers, designers, architects, developers and tradespeople have over 200 years of combined experience in the building industry.
What Are Your Goals?
Making the decision about how to invest your money is an important process. At Tiny House Listings Canada we really want to see that ALL Tiny Homes are built with industry standards that make them sustainable, affordable, safe, high-quality and of course, a great investment in the long-run. We also want federal and municipal governments to make sustainable living easier for those who want to break free from high mortgages and the burdens that come with traditional living. However in the meantime, we are happy to see that Canadians have options when it comes to living green.
If you are looking for a long-term real estate investment that builds you equity, then take a closer look at the Z240MH Manufactured Home from GreenTerra. The smallest size- 12’x40′, comes in at about $56,000.00 before tax. If you are more interested in Sustainably Built Homes that are smaller and more characteristic of RV’s- then Tiny Homes are the way to go.
We wish you all the best in your decision-making.
Questions? Please let us know here.