The tiny house craze continues to fascinate many Americans. There are TV shows that glamorize the mini-houses, and the people who seek to downsize their lives for whatever reason. In the 1950's the average home size was right around 1,000 square feet, according to data compiled by 24/7 Wall St. For many, the small-house idea does have its appeal, especially as McMansions seem to get bigger and bigger every year. Many new homes are now topping 3,000 square feet. If you have a dozen kids, a giant house makes more sense, but for most of us, how much is too much?

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The problem with most new tiny houses available today, is that they are basically a glorified camper. They are often built on a frame with wheels. They're kind of like a fancy small trailer house that doesn't look like a traditional mobile home. You will likely run into zoning problems trying to find a piece of property to park a tiny house. Plus, they have no foundation or septic system. Adding in those costs can significantly increase your cost of a pre-built tiny home. So what about an existing tiny house?

We found the smallest house currently on the market in Yellowstone County. It's only 537 square feet. 

Credit: Charles Platt/Diamond Real Estate

Located in Laurel in a "quite neighborhood" this little 1 bedroom/1 bath home was built in 1936. It's about the same square footage as a nice hotel suite. However, it's certainly not as luxurious as most hotels, as this home appears to be a bit of a fixer-upper.

Credit: Charles Platt/Diamond Real Estate

The kitchen and bathroom could really use complete remodels.

Credit: Charles Platt/Diamond Real Estate

The exterior of the home looks pretty rough as well. So why are the sellers asking $135,000? Because of the land. This old, tiny, somewhat dilapidated house sits on a fairly large lot (over 10,000 square feet), that more importantly is zoned Residential Limited Multi-Family which allows up to 4 units on the lot. In other words, a builder or developer could buy the lot, demolish the tiny house and build a four-plex townhouse unit. In turn, each of those units could easily sell for substantially more than the asking price of the home/lot.

Listed by Charles Platt at Diamond Real Estate, you can see the listing HERE.

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