There's more to a tiny house than meets the eye.

One of the biggest real estate trends right now is the 'tiny house' movement. It seems like everywhere you turn, you hear about how people are selling larger houses, downsizing their possessions, and moving into homes that are so tiny they almost make a college dorm look spacious by comparison. That might be a slight exaggeration, but when they say 'tiny,' they really do mean it.

Tiny houses are efficient, and they certainly cost less than a typical 3 bedroom ranch on a quarter-acre lot. But is this trend right for you? Before you commit, there's a lot that you need to know.

Some Tiny Houses Aren't Real Estate at All

If you're thinking about a tiny house to save money and simplify your life, you might be on the right track. But be careful about committing to something that isn't really an investment. Many of the smallest tiny houses aren't houses at all, but adorable little recreational vehicles. Cabin-shaped campers, for lack of a better term.

RVs depreciate the same as any other vehicle, so your investment isn't going to give you the same percentage return as a house could if you decide to sell later on. The larger the tiny house, the more likely it is to be a permanent home on a foundation. That's a different story. They're typically around 1,000 square feet or less, intended to stay put, and may eventually grow in value.

Tiny house owners often explain that extreme downsizing encourages spending more time outdoors.

Living in Tight Quarters Means Major Sacrifice

Could you live in 150 square feet? Most hotel rooms are larger than that, by far. The smallest of the tiny homes are 500 square feet or less, with many under 200. Two people could live in one without too much discomfort. But for larger families, things could become cramped.

American Tiny Home Association co-founder, Elaine Walker, tells U.S. News and World Report that each person living in a tiny home needs a minimum of about 100 square feet. If there are more than two in your family, the ultra tiny homes might not work at all.

Traditional financing might not be an option with a tiny house.

Zoning Could Limit Where and How You Live

Some areas have zoning restrictions that could limit the size of your tiny home or determine whether you can set up a smaller one at all. Architect Lloyd Alter explains at TreeHugger that banks might be shy about lending money, too. 

One of the biggest problems facing would-be tiny house owners is the fact that while it's a trend that's getting lots of attention and catching on in certain circles, it's anything but commonplace. Expect to meet with difficulty in every phase from finding a place to build or set up to worrying whether your house might be stolen while you're at work. That happened to a San Antonio tiny house owner.

Permanent Tiny Homes Must Meet Local Code

If your area has a minimum square footage requirement, you've got a built-in restriction on size. You may also be required to have every amenity that a larger home has, which could include the number of electrical outlets per room, the dimensions of doorways and stairs, and a compliant heating source. Thinking about loft sleeping arrangement? Remember that you might need a real staircase built to code and not a ladder.

Plumbing could be another problem. With an RV-style tiny house, you could set up at a campground and use their facilities. But on your own lot, you'll need either city water or a well, city sewer or a septic system, and space for all of the water supply and drain lines required by your municipality. Living out in the country doesn't mean you're off the hook where code enforcement is concerned.  

Tiny house living definitely has its pros. These homes cost a lot less to build than a more traditional size house, and they can be ultra efficient to heat and cool. For one or two people with minimalist tendencies, they could be ideal. Just be careful not to let the ideal cloud the realities of living in one.

If you want to downsize, a tiny home might be a good choice. Just be sure to do all of your homework first. There's a lot more to it than getting rid of stuff and moving into a new, miniature home.

At eppraisal, we've got a tool that can show what your current house is worth. With just a few minutes of your time, you'll get a home value estimate and see the factors that helped determine it. Whether you want to sell your home and downsize, or are just thinking about a move in general, the best place to start is by knowing what your house is worth. Click here for a free property valuation today.