A small home packs plenty of perks, and generally means a lower asking price. But entry price is only one factor — they’re easier on the pocketbook in a host of ways.
1. Lower property taxes. Your small home will be charged at a lower tax rate than its larger neighbors because the assessed value generally is lower.
2. Lower property insurance. The smaller the house, generally the lower the insurance cost, although it also matters where you live and how your small house is constructed. A brick house in wildfire-prone southern California is likely to cost less to insure than a similar-size house with wood siding.
3. You’ll save on heating and cooling. That’s regardless of how energy efficient the house is. In fact, one study indicates that a poorly insulated, 1,500-square-foot house is at least $200 cheaper per year to heat and cool than a well-insulated house twice that size. The U.S. Energy Information Administration says homes of 2,000 to 2,500 square feet use an average 102.3 million BTUs of fuel yearly — 13% less than homes that are 1,000 square feet larger.
4. Save on major replacements. When you need to replace a major house component or system, you’ll be glad you’re living in a smaller home. For example: According to the “2015 Remodeling Impact Report” from the NATIONAL ASSOCIATION OF REALTORS®, the national median cost for vinyl replacement siding is about $5 per square foot.
For a modest-size house (1,500 square feet of living space) with 1,740 square feet of exterior wall space, that’s $8,700. For a 2,500-square-foot house, you’ll pay $3,000 to $5,000 more!
5. Easier maintenance. You’ll spend less time cutting those smaller lawns, cleaning gutters, washing windows, and the umpteen other chores that home ownership involves. Figure 16 windows and sliding glass doors on a home of 2,000 square feet or less would take about 10 hours to clean, inside and out, twice a year. Double the house size, and that’s roughly 20 hours spent with a squeegee and rag.