Tiny houses: big living dreams in a small area
As recently as the early 2000s, tiny houses barely played a role on the real estate market. That has now changed. This is because many people are reacting to increasingly scarce living space, rising prices in sought-after regions and the trend towards a minimalistic way of living. Find out how the market for tiny houses is developing and why small houses can offer great return opportunities for investors.
Microhouses on the rise
There is no exact definition of the term, but the term tiny house usually includes both small houses on wheels and fixed small and modular houses. As a rule, tiny houses in Germany are between 16 and 30 square meters in size. Depending on the definition and number of residents, however, even houses with up to 100 square meters of living space can be considered tiny houses.
They became particularly popular around 2007 in the context of the financial and real estate crisis in the USA. Back then, “downsizing” their own living space was an alternative for people who could no longer afford or did not want to afford a large home. Today, the cost savings factor is still of great importance - both in terms of purchase and in terms of running costs - as these are correspondingly low for small houses. But there are also other reasons for the boom in the tiny house market.
This includes, for example, the sustainability factor, because thanks to a small living space, tiny houses use fewer resources and are often particularly energy efficient thanks to modern heating systems such as pellet stoves and solar systems. In addition, many people follow the minimalism trend, want to free themselves from superfluous things and focus on the essentials instead. When living in a tiny house, residents have no choice but to enjoy being close to nature without too much “ballast.” Small house models in particular are also particularly flexible, as they can be moved to a new home with a van.
As mobile and advantageous as the small houses are, so are their uses: They are suitable as a main residence, study, holiday or guest house and are becoming increasingly popular in Germany. According to Statista, around a third of the German population can easily imagine living in a tiny house. 58 percent would even consider a micro-house as a permanent residence.
New “building type E” for German tiny houses
Auch According to the Immowelt portal, compact houses are attracting more and more interest - not only by minimalists and bargain hunters, but also by holidaymakers, municipalities and investors. However, there are often practical problems, especially in Germany, with regard to building law and the associated permit for the construction of mini houses. To counteract this, the Tiny House Association The “Small Building Industry Standard” was written for the first time.
Nevertheless, tiny houses still belong to “building class 1” and must therefore meet all requirements of a normal residential building, which increases costs and can make permits more difficult. With the” enshrined in the coalition agreementBuilding type E” (“E “how simple or experimental), however, existing building classes are to be added later this year. It was introduced in 2024 as an addition to the model building code and allows simpler, more cost-effective and resource-saving construction methods without neglecting safety. For the tiny house market, this represents an important breakthrough: Approval processes can run faster and more clearly, which increases planning security and makes investments easier. This paves the way for more affordable, flexible housing — especially in times of housing shortages, climate crisis and a deliberately slowing down lifestyle.
Tiny houses — exciting prospects as holidays and investments
However, many people do not (yet) want to completely give up their comparatively spacious homes, but want a minimalistic, temporary life. Ideally in combination with “Digital Detox”, i.e. the temporary abandonment of digital devices such as smartphones, tablets, laptops or gaming consoles. Minimalism combined with digital detox offer tiny houses in nature, which are becoming increasingly popular with holidaymakers.
As early as 2021, there was Around 60,000 Tiny‑House listings worldwide on Airbnb - especially in the USA. Around 40% of all Airbnb bookings were for so-called “unique stays,” i.e. special accommodations, which include cabins or tiny houses. In total, over 2.5 million nights have been booked in tiny houses, which has provided hosts with income of around 195 million US dollars.
A recent example of the potential of this trend is the British company Get Unplugged Limited, which offers technology-free retreats in nature — cabins for a conscious digital break. The target group is primarily stressed city dwellers who want to completely switch off for a few days. The high capacity utilization of over 86% shows that demand is already high today and is constantly growing. With the help of FINEXITY and a secured corporate bond of 600,000 EUR (term until 2029, interest rate 7-10.25% p.a.), which will soon be available on the marketplace, will finance ten more cabins. The business model is scalable — by 2029, the company plans to expand from the current 32 to 958 cabins, accompanied by significant revenue growth, which could result in attractive return opportunities for investors.
