When deciding on the size of your home, bigger isn’t always better. As property values continue to rise, affordability is becoming an issue for many homebuyers. Smaller homes offer a range of advantages and come at a lower cost.
A small home is not the same as a tiny home and is much more similar to traditional single-family homes. These types of homes usually are around 1,000 square feet or less, making them a great option for newlyweds, empty-nesters and retirees.
While a smaller home may not be your first choice, it could prove to be a wise investment in the long run.
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Is it a good idea to buy a small house?
A small house can be an excellent option for those interested in minimalism, energy conservation, downsizing and specifically, first-time homebuyers. Small homes allow young individuals to experience all the responsibilities involved with homeownership without breaking the bank.
Aside from the monthly mortgage payment, you’ll need to consider all the costs of homeownership, including utilities, property taxes, furniture and more. In most cases, a smaller home is more affordable and presents less financial risk.
Let’s take a look at how a smaller home compares to a larger home.
Small House vs Big House
| Small Home | Big Home |
|---|---|
| Smaller down payment and mortgage | Larger down payment and mortgage |
| Lower maintenance costs | Higher maintenance costs due to more space/features |
| Lower energy costs and fewer rooms to furnish | Higher energy costs and more rooms to furnish |
| Wider range of potential buyers | Can be challenging to sell due to affordability |
| Limited storage space | Ample storage space |
5 Benefits of a Small House
If you’re looking to downsize or find a more affordable option, here are 5 benefits of buying a small home.
1. Buying Smaller Saves More
Opting for a smaller home can save you money upfront and in the long run. You'll face a smaller down payment and monthly mortgage payments, avoiding the financial strain of hefty debt.
Smaller homes often cost less, allowing you to invest in unique features or advanced technology within the same budget as a larger home. A lower purchase price also means you can put more towards your down payment or closing costs, reducing your monthly mortgage and starting you off with greater equity for a potentially lower mortgage rate.
2. Lower Maintenance Expenses
Owning less property translates to lower maintenance and upgrade costs. Smaller homes mean fewer windows to replace and less area to heat and cool, significantly reducing your energy bills. With less space, you won’t need as many televisions or appliances, saving you money on your electricity bill. Additionally, smaller homes often focus on efficiency, enhancing the effectiveness of heating and cooling systems while using less energy.
3. Decluttering Made Easy
Moving to a smaller home can be a great time to downsize. Having a ton of storage space is great, except when you're storing things that you haven't used or even looked through in years.
Buying a small home allows you to prioritize what you need vs want. If you don’t have room for certain items, you may be less inclined to purchase them in the first place. This not only saves money but also minimizes the time and effort spent on upkeep.
4. More Room for Improvements
A smaller home leaves more room in your budget for higher-quality furniture and home improvements. You can invest in durable, long-lasting items rather than cheaper alternatives, saving you more money in the long run.
More room in your budget also means you can afford home improvements that enhance your home and increase the property’s value.
5. Become a Homeowner Sooner
Opting for a smaller, more budget-friendly house means you don't have to save as much for a down payment and upfront costs of owning a home. This approach simplifies and speeds up the homebuying process, letting you become a homeowner sooner. In fact, many renters are drawn to smaller homes because they are less expensive and can start building equity quickly.
Are small houses hard to sell?
Home prices typically depend on the square footage and size of the house. Smaller homes often attract a broader range of buyers due to their affordability, making them more likely to sell.
However, this heavily depends on the specific home and area. Smaller homes in metropolitan areas may tend to sell faster than in rural areas because of affordability and demand.
If you’re struggling to sell a small home, it’s essential to show potential buyers the perks of small house living. Whether it be the great surrounding neighborhood and amenities or the minimal upkeep, small homes offer many benefits for all types of homebuyers.
Talk to a Veterans United loan expert at 855-870-8845 to see how you can use your VA benefits to buy a small home!
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