tiny house investment

I suppose that's possible, but assuming it's a legitimate business there are substantial risks. As with all overseas real property (and pseudo real property) you'd be subject to location-specific risks. For example, are these tiny houses (boxes on wheels really) even insurable?(*) A flood or fire would destroy a tiny home even more quickly than a big home. What happens if the Australian dollar or New Zealand dollar depreciates relative to the Singapore dollar? Of course you'd lose money in Singapore dollar terms, or make less money. (The opposite could occur, but the point is there's foreign exchange risk. And it’s one specific foreign currency, not a basket of them.) What happens if a law or regulation changes and you end up with a tiny home that cannot be legally rented? Tough luck. Or the market for tiny house rentals falters? Tough luck. The company promises they'll buy back the home at the end of the lease. What if the company isn't actually able to do that? Tough luck. What if a renter damages the tiny home, expensive repairs are required, and it can't be rented out in the interim? Tough luck. What happens if there's a squatter who moves in during the off-season, and you have to hire an expensive lawyer to evict the squatter? (Some jurisdictions are friendly to squatters.) Tough luck. What happens if a renter runs an illegal drug business (such as a drug lab) out of the tiny home, and the police haul the whole tiny home into a police warehouse to keep as crime scene evidence pending trial? Or the renter merely has contraband, and the police do the same thing? Tough luck. Someone just steals the tiny home? Tough luck. Someone sues you because something fell on their head? Tough luck. The tiny home has a manufacturing defect, such as a toxic material that renders the home uninhabitable? Tough luck. The tiny home sets a new world record for mold? Tough luck.

I'm probably barely scratching the surface, but there are a LOT of risks here. If you do this you should be prepared to be wiped out.

(*) On edit: It looks like insurance might be obtainable for certain risks, but can you actually obtain that insurance? Are you the actual policyholder? How easy would it be to file a claim? How much does it cost? What risks does it cover (and not cover)? And how much of your Singapore dollar principal would it cover? (Not 100%, surely. It's probably fair market value recovery in local currency, and that'd be a lot less than your principal.)

Hypnotika · Aug 6, 2023

BBCWatcher said:
I suppose that's possible, but assuming it's a legitimate business there are substantial risks. As with all overseas real property (and pseudo real property) you'd be subject to location-specific risks. For example, are these tiny houses (boxes on wheels really) even insurable?(*) A flood or fire would destroy a tiny home even more quickly than a big home. What happens if the Australian dollar or New Zealand dollar depreciates relative to the Singapore dollar? Of course you'd lose money in Singapore dollar terms, or make less money. (The opposite could occur, but the point is there's foreign exchange risk. And it’s one specific foreign currency, not a basket of them.) What happens if a law or regulation changes and you end up with a tiny home that cannot be legally rented? Tough luck. Or the market for tiny house rentals falters? Tough luck. The company promises they'll buy back the home at the end of the lease. What if the company isn't actually able to do that? Tough luck. What if a renter damages the tiny home, expensive repairs are required, and it can't be rented out in the interim? Tough luck. What happens if there's a squatter who moves in during the off-season, and you have to hire an expensive lawyer to evict the squatter? (Some jurisdictions are friendly to squatters.) Tough luck. What happens if a renter runs an illegal drug business (such as a drug lab) out of the tiny home, and the police haul the whole tiny home into a police warehouse to keep as crime scene evidence pending trial? Or the renter merely has contraband, and the police do the same thing? Tough luck. Someone just steals the tiny home? Tough luck. Someone sues you because something fell on their head? Tough luck. The tiny home has a manufacturing defect, such as a toxic material that renders the home uninhabitable? Tough luck. The tiny home sets a new world record for mold? Tough luck.

I'm probably barely scratching the surface, but there are a LOT of risks here. If you do this you should be prepared to be wiped out.

(*) On edit: It looks like insurance might be obtainable for certain risks, but can you actually obtain that insurance? Are you the actual policyholder? How easy would it be to file a claim? How much does it cost? What risks does it cover (and not cover)? And how much of your Singapore dollar principal would it cover? (Not 100%, surely. It's probably fair market value recovery in local currency, and that'd be a lot less than your principal.)

thank you so much for the insight

BBCWatcher · Aug 6, 2023

Regarding insurance, while it appears there are “RV” and “caravan” policies available I don’t know if there are any RV landlord policies generally available. There’s a huge difference. Tiny houses are classed in the same general category as RVs and caravans. When you use a RV or caravan for self, that’s one thing. But the risks rise a lot when you’re renting them out. Insurance could be a real challenge and expensive.

starbugs · Aug 6, 2023

From what I I understand, the investment is in the tiny house, not the land. Hence this is not a real estate investment but made to sound like it is. Not exactly a scam but don't do it.

ekardo · Aug 6, 2023

Interesting but since it’s overseas investment, it has more risk as compared to overseas property. Might as well aim for normal size property?

BBCWatcher · Aug 6, 2023

starbugs said:
From what I I understand, the investment is in the tiny house, not the land. Hence this is not a real estate investment but made to sound like it is. Not exactly a scam but don't do it.

The tiny house is effectively a recreational vehicle (RV) or caravan in local vernacular. In the same general category, anyway. Another analogy: you're buying a camping tent then renting the tent. There's no land or even permanent foundation associated with these tiny houses.

Ever seen portable toilets in Singapore? Same basic idea!

ekardo said:
Interesting but since it’s overseas investment, it has more risk as compared to overseas property.

More or less...hard to say. For example, there's no land, so you're not taking any land-related risks. No risk you lose your investment if there's a title problem with the land, for example. If there's ever a problem with the land then in principle you can just move your tiny house to another patch of land.

ekardo said:
Might as well aim for normal size property?

There's a higher quantum to do that, and a higher quantum means more risk. That's really the whole point of this business model, that its purveyor can solicit participation in S$10,000 increments (1/8th of a tiny house) or S$80,000 (100% of a tiny house). There aren't too many houses in Australia available for purchase with S$10,000 or S$80,000.

However, there are REITs. And I really don't understand why so many Singaporeans love real estate (perhaps a problem on its own) but then won't pick the obvious vehicle to invest in real estate: REITs. You can buy S$1,000 (or less) of REITs if you wish. They still involve risks, but at least they're better regulated.

wira · Aug 6, 2023

seems interesting.
you purchase a tiny house from them, they handle where to place your house in AU/NZ and handle all marketing and rental management.

after that you can sell back the house back to them at the same price. Not sure what the catch here or if there is depreciation costs involved.

apparently can visit showroom and office at Singapore Jalan Pemimpin

BBCWatcher · Aug 6, 2023

Here are some other "nontraditional" forms of housing that may or may not be available for direct investment:

dormitories (we have many in Singapore)
corporate housing such as serviced apartments
worksite trailers
film/TV location trailers
oil & gas exploration/drilling site housing
cruise ships
hotels, including capsule hotels and airport transit hotels
corporate and religious retreat housing
hostels
assisted living/eldercare housing
student housing
disaster relief housing
RVs, camper vans, and other wheeled homes
campsites (such as RV plug-in camps)
mobile home parks
drug treatment housing
housing for victims of sexual assault, spousal abuse, etc.
correctional facilities
mental health patient housing
family housing near children's hospitals
privately owned rail carriages
house boats

All involve substantial risk.

BBCWatcher · Aug 6, 2023

wira said:
seems interesting.
you purchase a tiny house from them, they handle where to place your house in AU/NZ and handle all marketing and rental management.

after that you can sell back the house back to them at the same price. Not sure what the catch here or if there is depreciation costs involved.

apparently can visit showroom and office at Singapore Jalan Pemimpin

Those are the main claims, yes.

runicz · Apr 21, 2024

Anyone tried these model? Seems like they have been advertising intensively since Mid 2023 as they expands into Europe/Australia/TW.

They even have co-ownership 10k/lots 2 years lease model, so you dont really whack a fortune just to experience how its like.

They are operational since 2018, seems still stable and kicking bigger now
https://www.straitstimes.com/lifest...fers-eco-friendly-tiny-houses-for-sale-buyers

sohguanh · Apr 21, 2024

runicz said:
Anyone tried these model? Seems like they have been advertising intensively since Mid 2023 as they expands into Europe/Australia/TW.

They even have co-ownership 10k/lots 2 years lease model, so you dont really whack a fortune just to experience how its like.

They are operational since 2018, seems still stable and kicking bigger now
https://www.straitstimes.com/lifest...fers-eco-friendly-tiny-houses-for-sale-buyers

Maybe to some investor 10k is their test water amount. Personally for me any new investment instruments I limit test water to 100 or if can go even lower I even more willing to give it a try. To throw away 10k on a bad investment is too much for me to bear.

tiny house investment

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