21–30 of 212 posts
$20,000 is impressively cheap, but like with the iphone making smartphones popular or the Tesla making electric cars popular, I think smartly built houses aren't gonna take off until their design and specs are top notch.
I love things like this, but also saddened that in the UK the land to put it on would cost at least ten times that amount. The planning system here is a disgrace.
UK housebuilding companies are sitting on (by various estimates) 400,000-600,000 plots of land which have planning permission, but they haven't built on. That's about 3 years' worth of new houses. The reason is to hold up prices, and because (with "ever-rising" prices) if they build in the future they will make more profit. There are problems in the planning system, certainly, but at the moment we need an undeveloped…
I love things like this, but also saddened that in the UK the land to put it on would cost at least ten times that amount. The planning system here is a disgrace.
UK housebuilding companies are sitting on (by various estimates) 400,000-600,000 plots of land which have planning permission, but they haven't built on. That's about 3 years' worth of new houses. The reason is to hold up prices, and because (with "ever-rising" prices) if they build in the future they will make more profit. There are problems in the planning system, certainly, but at the moment we need an undeveloped…
Not just this but also because they still need capital to finance the construction process. Borrowing short term is a model that works for them when demand is high - they don't want to be sat holding empty properties after all.
Longer term finance, allowing houses to be built for rental, is one solution that's slowly gaining traction with pension funds and the like.
Of course, as you say, the status quo suits the major housebuilders just fine so there is a lot of inertia when it comes to adopting new and innovative business models.
Earlier quoted context omitted.
As noted in the article, the current mortgage situation isn't good at all. I wanted to buy land a couple of years ago, to build a tiny house on. I went in willing/able to put a 30-40% down payment on the property, with plans to build my own tiny house completely self-funded over the next year or so. The banks were simply not at all equipped to address that. Despite my excellent credit (high 700s) and low debt, and th…
If you're interested in knowing why, it's because mortgages are sold as securities these days (and have been since before the Big Collapse). If your mortgage is significantly not like the other mortgages, it can't be bundled and sold into the pool of other securitized mortgages. That means your lender has to carry the note itself and the overwhelming majority of lenders--banks and brokers--don't do that. The other pr…
On this point:
"What you're looking for is a "portfolio loan," where the financial institution keeps your loan on its own books. Some credit unions do this (mine does) in situations like yours. The interest will be commensurate with the credit union's guess of how easy your property will be to resell (both in the opinion of the underwriter and of the outside, independent appraiser) to pay for the risk but it can be done."
It was the credit union that said, "We could maybe get you a loan on the land if you can put 50% down." The bank I've been using for 20 years flat out said "no way, we only do land loans for businesses for new construction, and they have to have a plan and funding lined up to complete the construction".
It all seems vaguely rotten and corrupt, to me...but, well, I don't know the motivation for it. I'll just keep saving, and pay cash. Or maybe I'll buy land where it's cheaper. Maybe I won't always value living within biking distance of a city with good live music as highly as I do now.
Earlier quoted context omitted.
As noted in the article, the current mortgage situation isn't good at all. I wanted to buy land a couple of years ago, to build a tiny house on. I went in willing/able to put a 30-40% down payment on the property, with plans to build my own tiny house completely self-funded over the next year or so. The banks were simply not at all equipped to address that. Despite my excellent credit (high 700s) and low debt, and th…
It falls down to the value of your proposal, eg: Land: $25,000 Resale at $20,000 to $30,000 Tiny House: $25,000 Resale at -$5000* to $35,000 Normal House: $100,000 Resale at: $75,000 to $125,000 * Next owners may want it removed A $50,000 loan doesn't make sense / is too risky. I know the above is grossly over simplified, and there's hundreds to thousands of factors going into a risk / valuation but currently banks a…
I think you're assuming I was trying to get a loan to build the house. The loan was for the land itself, and I planned to self-fund the house construction. So, I was looking at property that cost around $75k, and was hoping to get a loan for $50k of that (with $25k down). The tiny house was not at all part of the equation on the loan (except in the sense that had I been planning to put a big house on the land and was contracting a home builder to do it, the bank might have treated it more like a regular house and been willing to loan me money).
But, yes, part of the problem is that land has much less predictable resale value than houses, and that was the usual answer I got when being told, "No".
At the end of the day, the aim of this house is "a home that someone living below the poverty line can afford."
Look, i'm more than supportive of innovative design and doing things cheaply, but for an article that was heavy on "the house is so cheap", and "its built kinda more like a airplane", and "it uses all this innovative stuff", there's a startling dearth of information.
Sqm, plans, insulation, facilities, utilities, safety? Is it a house I'd want to live in or build, or is it a $20,000 shed with furniture? I'm not being snarky, I really want to know!
Even on Iceland which has vast amounts of space and tiny population, house prices are high because the areas where people want to live is in high demand.
Now if you could just build your house at any arbitrary location on Iceland then that would not be a problem. But people needs schools for children, hospitals, jobs etc. That limits the options.
The US has fairly cheap land because it is flat, it is easy to build infrastructure and there are a lot of roads everywhere which you can connect to. The city planning also space out things a lot leaving a lot of land for building.
It's kind of hard for me to tell whether the house is nicer than mine when there's so little detail in the article on the actual house. Look, i'm more than supportive of innovative design and doing things cheaply, but for an article that was heavy on "the house is so cheap", and "its built kinda more like a airplane", and "it uses all this innovative stuff", there's a startling dearth of information. Sqm, plans, insu…
It's kind of hard for me to tell whether the house is nicer than mine when there's so little detail in the article on the actual house. Look, i'm more than supportive of innovative design and doing things cheaply, but for an article that was heavy on "the house is so cheap", and "its built kinda more like a airplane", and "it uses all this innovative stuff", there's a startling dearth of information. Sqm, plans, insu…