Many of us love the idea of tiny homes, but probably wouldn’t live in one. While tiny homes are unlikely to be the future of housing, they do have a few main strengths that could enhance the housing sector. This essay examines the benefits of tiny homes, extracts the best aspects, and shows how someone gains those benefits by renting through Provito’s Rent + Equity platform.
It’s no coincidence that Tiny Homes are being built more regularly and have seen increased discussion. In the graph below, you’ll see this Google search trend data blast up and maintain at a high level over the past four years.
Tiny Homes matter to different people for different reasons, but it doesn’t take a SpaceX or Tesla employee to discover the best parts of tiny homes.
Benefit 1: Tiny Homes cost less to build and own
People love the idea of owning a tiny home, in large part because they’re often at a price that is affordable for a home. The material costs are low and can stay under $100,000, which helps excite people to consider one. The inconvenient truth is it’s hard to actually get to that ownership position. This difficulty comes in large part because there aren’t great financing options to build or even buy a tiny home. Most people actually have to pay between 50-100% of the money up front to actually build/buy one as it’s not a standard option for many lenders. So the lower cost serves as a tease, but on further investigation, most people aren’t in a position to buy or build a tiny home. Even if someone could put 100% down on a tiny home, that’s like having a huge wad of cash tied up into one stock.
HOW DOES PROVITO RENT + EQUITY COMPARE?
Unlike a tiny house that requires a ton of cash up-front, renters through Provito Rent + Equity can begin building ownership in a portfolio of properties pretty much immediately. It begins with an initial deposit much like a security deposit, which is both more accessible and less risky than a traditional home down-payment and hefy mortgage. For our renters, as long as they pay rent on time, attend a monthly community meeting, and follow the simple “house rules” for their neighborhood, they’ll continue to build their assets. No massive risk required.
Ultimately we find it easier and less risky to use our Rent + Equity platform than it is to get into a tiny home or take on a mortgage. The early pilot stage of Rent + Equity puts a portion of rent into an escrow account, with future versions where renters are purchasing actual stake in a portfolio of properties. This enables us to get started on the model with less risk for both renters and the company.
Benefit 2: Tiny Homes are easier to maintain, heat, upgrade, and furnish
All else being equal, the smaller the home, the less it costs to build & repair, the less furniture it takes to fill, and the easier it is to heat & cool. Additionally, smaller footprints make any upgrades and remodels easier to sustain over time. This gives tiny homes a great advantage, as an owner is spending less on their home, and is able to invest more into life experiences, personal savings, and higher-quality purchases.
HOW DOES PROVITO RENT + EQUITY COMPARE?
Properties within our Rent + Equity platform aren’t sized like a tiny home, but we still match the benefits of decreased maintenance and utility costs in distinct ways. We also allow renters of individual rooms to build assets as part of their normal monthly rent, which is similar to co-living, but with far more advantages to both the renter and landlord.
When compared to individual homeownership, our maintenance structure is more planned and preventative in nature. We also have the ability to conduct most maintenance in-house or through established relationships with contractors via our larger scale. According to common sense, when you give renters a piece of the pie, there’s a noticeable decrease in maintenance costs. This holds true even at this early stage, where our renters don’t purchase equity in the specific property, but they do build an asset in escrow. This also benefits landlords on our platform, as they don’t need to sell a portion of their ownership in order to get receive the benefit of lowered maintenance costs from great renters. This benefit to landlords holds true even in future versions of the Rent + Equity platform.
Properties on our Rent + Equity platform include information on expected utility costs, so prospective renters have full information on what the total cost to live will be, and that’s just the beginning. On our platform, our Provito-owned properties have the highest standards to decrease energy and utility costs. For landlords who use our platform and opt-in to a long-term partnership, they will see their units incrementally improved for energy efficiency and property values of their units.
RENT + EQUITY FOR ROOMMATES
We recognize that having a roommate is common, especially in earlier stages of life, or when people prefer mobility. Our co-living solution works where all roommates have the same access to Rent + Equity. This gives renters more affordable housing costs while still building assets over time. This service also helps renters live more of life outside the home, while still having access to some of the huge benefits of home ownership, all without the burden of a huge loan and/or hefty down payment.
SPEAKING OF UPGRADES
On a related note, we’re also building our own properties that are spacious enough for the modern renter, and include amenities that actually make life better; things that you normally only find in luxury homes. We’re building properties with things like sound-dampened bedrooms, gas fireplaces, and lighting that supports the circadian rhythm. You can learn more about our property design philosophy by reading the essay “What would Tesla do to Housing.”
Benefit 3: There’s something about taking your home with you
One thing some people love about tiny homes is that many are on trailers… we can take it where life takes us. Meanwhile, selling a home and paying up to 6 or 7% for the transaction does not sound fun, or even sound fair as most of us won’t stay in one place for the 5ish years it often takes to make money on housing. An easier to transport tiny home represents an attractive alternative to a major pain for traditional homeownership.
HOW DOES PROVITO RENT + EQUITY COMPARE?
Much like having an apartment with wheels, renters in Provito’s Rent + Equity platform are able to keep their ownership when they move, even if they don’t move to another Provito property. After a 2-year vesting period, they can also cash out and use the funds for whatever they like. Our aim though is for renters to grow with us instead of cashing out or even buying a home. This is because when compared to the first few years of a 30 year mortgage, Rent + Equity renters will receive comparable value without needing to go in to debt. To learn how we compare to a 30 year mortgage, please join our mailing list here and we’ll send you an advanced copy of that essay. As a note, any feedback will be extremely helpful in improving this service.
(Bonus!) Benefit 4: Tiny Home Community
There’s one benefit that often gets overlooked in discussions, and it’s a massive advantage for tiny home followers–it’s the community. There’s a shared circle of tiny home enthusiasts who love to help newbies and veterans alike. Places like r/tinyhouses make challenges easier to overcome, discussions more developed, and life more fun.
Provito Rent + Equity bakes community interaction in from the beginning. We exist to serve our customers, renters, and neighborhoods through more than just housing and saving for a future. Our mission at Provito is to shape a world where people have the flexibility to pursue a life full of meaning. Beyond providing the absolute best place to live, we’re adamant about activating entire communities. To that end, we have a monthly community meetings where residents and landlords get to hang-out, learn something new, and influence the way our communities are moving.
About Provito and Rent + Equity
We envision a world where people have the flexibility to pursue a life full of meaning. One way to get there is by having our housing work for us instead of the other way around. In Rent + Equity, renters who pay rent on time and attend a monthly community meeting accrue wealth in a portfolio of properties.
We do this because the world is changing, and so should our housing choices. We know homeownership is becoming more elusive, student loans and debt loads are quite high, people are waiting longer before settling down, and the world becoming more mobile. There’s a huge opportunity for a better way. We’re channeling our inner Jack Bogle from Vanguard to take risk and offer an alternative that works for renters, landlords, and investors.
We’re not reinventing the wheel, but going back to the basics of what really matters in a society: being involved in a community, knowing our neighbors, and improving the future. By joining the Rent + Equity platform, you join neighbors who have self-selected in a way to say they care about living a fulfilling life that makes economic sense. You get to share in that combined knowledge and benefit, while being able to maintain that wealth when you go wherever this life takes you.
It’s not about doing something new, but going back to the path for a fulfilling and profitable life.
Get involved with Provito Rent + Equity:
PATH 1: JOIN THE CONVERSATION AND GET PREFERRED ACCESS TO RENT +EQUITY
Smash that subscribe button & comment below! Community is our core, and that extends beyond just our current renters. If you’d like to be a future renter, or if you want to learn more of our platform, we invite you to join our mailing list here. We’ll only send you updates if they’re really awesome.
PATH 2: PARTNER WITH OR POTENTIALLY LAUNCH A RENT + EQUITY COMMUNITY
We’re currently preparing our first pilots, and are on the lookout for partners on future projects. If you’re involved with the housing market and have a burning interest to improve your neighborhood communities, we’d like to chat with you to learn more of your work, share more of the details behind our platform, and to see how we can build something together. Contact us here