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Tiny Homes / ADU Types & Differences
Differences Between a Tiny Home on Wheels and a Modular ADU on a Permanent Foundation
As housing costs rise and property owners seek smarter, more flexible ways to use their land, two options have gained significant attention: the Tiny Home on Wheels (THOW) and the Accessory Dwelling Unit (ADU). While both offer compact and efficient living spaces, they differ in structure, use, regulations, and long-term value. Understanding the key differences between the two can help homeowners make informed decisions when planning to add a second unit to their property.
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Tiny Home on Wheels (THOW)
A Tiny Home on Wheels is essentially a small, fully functional home built on a trailer chassis. Designed to be mobile, THOWs typically range from 100 to 400 square feet and often resemble miniature cottages or modern cabins. Because they are constructed on wheels, they are usually classified as Recreational Vehicles (RVs) or Park Model RVs, rather than permanent residential structures. This classification has significant implications when it comes to zoning laws, building codes, and financing options.
One of the biggest appeals of a THOW is its mobility and flexibility. Homeowners can move the structure from place to place, which is ideal for those who embrace minimalism, travel frequently, or want a living solution that doesn't tie them to one location. Additionally, THOWs are often less expensive to purchase or build than a foundation-based ADU, making them an attractive option for people seeking affordable housing.
However, there are trade-offs. Many cities and counties have strict zoning and parking regulations that limit where you can place or live in a THOW full-time. Permanent residence in a THOW may not be legally permitted in some areas unless it's located in a designated RV park or specifically zoned property. Since they are not considered real property, THOWs may also not qualify for traditional mortgage financing. Utility hookups, insulation, and long-term livability are other considerations that require careful planning.
Accessory Dwelling Unit (ADU)
In contrast, an Accessory Dwelling Unit-often referred to as a backyard cottage, granny flat, or in-law suite-is a secondary residential unit built on a permanent foundation. ADUs can be site-built, modular, or prefabricated, and they are designed to be permanent fixtures on the property. These units must comply with local building codes and zoning ordinances, which can vary significantly depending on the city or county.
Because they are permanent structures, ADUs are treated as real property, and this opens the door to more financing options, such as home equity loans, renovation loans, or even refinancing packages. They can be connected to the primary residence's utilities or set up with separate metering. ADUs are often used to house family members, provide rental income, or serve as home offices or guest suites.
A major benefit of an ADU is that it adds value to the primary residence. It becomes part of the overall property, enhancing resale potential and offering long-term benefits. That said, the initial costs and permitting process for an ADU tend to be more complex and expensive than for a THOW, due to required site work, utility planning, and code compliance.
Which Is Right for You?
The choice between a Tiny Home on Wheels and an ADU depends on your goals, budget, and local regulations. If you prioritize mobility, lower upfront costs, and minimalism, a THOW may be a better fit. On the other hand, if you're looking for a long-term investment, additional living space for family, or a way to generate rental income while boosting property value, a permanent ADU is likely the smarter option.
Both housing solutions reflect a shift toward more flexible, sustainable, and cost-conscious living, and each comes with its own set of opportunities and challenges. Consulting with local planning departments, builders, or ADU specialists can help ensure you choose the path that aligns best with your lifestyle and property goals.
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