People worldwide seem to be increasingly fascinated by the idea of tiny homes and alternative lifestyles, including dwellings constructed in ways you would not expect. One of these unique living phenomena is shipping container homes.
But what are the pros and cons of such a lifestyle choice? Let’s dive a little deeper into the whole idea.
What Are Shipping Container Homes?
As the world has been taken by storm in recent years by the innovative designs of tiny homes and alternative living situations, shipping container homes are also becoming more popular for those looking to live a different lifestyle.
But what is a shipping container home, you might ask?
Well, they are basically what the name suggests: a dwelling constructed within large, metal shipping containers—the same style of shipping containers commonly used in transporting goods overseas on freighter ships or across countries on semi-trucks or train cars.
These containers are primarily available in two distinct sizes for transforming into a home— 20 ft. by 8 ft, or 40 ft. by 8 ft. The key difference is the square footage inside, as the former provides 160 square feet, while the latter gives 320 square feet.
Depending on what you do with these shipping containers, they can be turned into entirely self-contained small homes, an independent workspace, a personal studio, or even combined with other containers to create entire multi-level houses.
But what are the advantages and disadvantages of living in such a space? Let’s discuss some specifics associated with alternative living in homes made from shipping containers.
The Pros of Living in a Shipping Container Home
If you are interested in the lifestyle of downsizing from a traditional house to something smaller and more versatile, such as a shipping container home, it might be the right choice for you. But let’s go over the pros of this decision first.
1. Can Be More Cost-Effective Than Typical Residences
While this is no guarantee, shipping container homes tend to cost less than traditional housing in the long run.
Not only are shipping containers usually cheaper to purchase by themselves, but they are also less expensive to turn into a decent dwelling customized to your exact specifications.
2. Ease of Mobility & Transportation
If you keep the overall structure of the shipping container intact when turning it into a home, they can be easily transported across countries and even oceans—making it easy to embrace mobility and move wherever you want.
This is done by shipping companies that can offer transport services even for modified shipping containers, delivering them worldwide by boat, truck, or train.
3. Easily Customizable
The options for customizing and modifying your shipping container home are nearly endless. You can select multiple containers to create a multi-story structure or combine different container sizes for an individualized layout.
Additionally, shipping containers are reasonably easy to modify internally, as well. You just need the right tools to cut holes for windows, doors, and stairwells into the container itself to create the perfect dwelling for you.
4. Eco-Conscious Option
Though they are not made of particularly eco-friendly materials, it’s still an environmentally conscious decision to turn a shipping container into your home.
Instead of letting it lie around a shipping yard and go to waste or becoming refuse in a landfill, you are giving this object a second life as a home.
5. Energy Efficiency
It’s much easier to heat and illuminate these small spaces than to warm an entire house. You will impose fewer supply needs on the infrastructure and environment around you and have lower utility bills as a result.
Plus, it takes less energy consumption to transform a shipping container into a home than it does to build an entirely new residence from scratch!
6. Incredibly Secure
Considering the steel that these prefabricated shipping containers are made of, you don’t have to worry about burglars gaining access to your alternative dwelling. It is quite hard to successfully break into a metal box, after all!
And, when you are away from your little home for an extended period, you can simply lock up the outer doors—if you kept the original storage container door—and rely on the security system that allows these containers to ship expensive goods around the world.
7. Made of Durable Material
As mentioned, these units are generally made of reinforced or galvanized steel, allowing them to be shipped across massive distances and often under the influence of terrible weather conditions.
As a result, shipping container homes benefit from being incredibly hardy and durable, with low instances of your typical residential wear and tear.
8. More Options & Space for Your Investment
If you want to renovate a traditional residence or add more rooms to an existing building, it will typically cost quite a lot of money.
But with shipping container homes, you can easily add to the structure and customize it in a way that can evolve with an ever-changing lifestyle or family size. The base price is the same for each container; it just depends on what you do with it.
9. Quick Construction & Build Time
When building a typical multi-story residence that one might find in the suburbs, there is always a long waiting period for the house to actually become a livable space and not just a construction zone.
But the time is significantly shorter in terms of shipping containers being turned into dwellings. They already have walls, floors, and a roof, so you can skip several steps of the process and get your home created sooner.
10. Units Are Highly Available
There is really no shortage of shipping containers in the world. Because the manufacturing and agricultural sectors rely on these units to transport and receive goods all over the planet, they are common and easy to find.
And just because a shipping container has been retired by a transport company or manufacturer doesn’t mean that it is unusable— it can still be transformed into a dwelling after its time as a cargo bearer ends.
The Cons of Living in a Shipping Container Home
And while there certainly are benefits to living in an alternative housing structure, like a shipping container home, there are also disadvantages to this lifestyle. It’s time to examine some cons of this alternative living style.
1. Appliances Don’t Always Fit
Shipping containers are not built with modern appliances in mind, so altering them to include your typical home setup of dishwashers, stoves, ovens, washers, or dryers can be difficult.
You will need to put in a custom electrical system, as well as special plumbing to make toilets flush and water run, which needs to be done by a specialist in this field and will cost more than a DIY job.
2. Building Permits Can Be Difficult to Get
You generally need very specific permits and zoning permissions for turning a shipping container into a home, as they are technically classed as a non-permanent structure.
And some municipalities won’t even let you set up a shipping container as your home, depending on local housing regulations. So, it can be difficult to figure out the fine print on finding a place to put your alternative-style dwelling.
3. Contractors Are Hard to Come By
Not everyone can work with shipping containers, and specialist contractors or builders who have experience with turning these units into a successful living spaces can be difficult to find and expensive to hire.
4. Issues With Insulation
Shipping containers are made with fairly thin metal walls, so you need to insulate them well before they become livable.
However, unless you want to build out the walls a bit, you will likely need to use a thin insulation layer that will fit within the narrow confines of the container’s dimensions, like a spray foam that doesn’t provide as much insulation as other options.
5. Need to Consider the Climate
Because of the metal construction of shipping containers, it can be hard to achieve temperature regulation inside the structure, particularly in very hot or cold climates.
It takes a lot of insulation and airflow to help maintain control of the temperatures, so setting up your dwelling in the far North or a tropical location might not be the best idea.
6. Safety Concerns for Used Containers
Depending on the types of cargo your shipping container was previously used for, it can bring health hazards to the fore.
Some of these shipments could have contained toxic substances, dangerous cargo, or even spillages, not to mention treatment with insecticides or other chemicals that such containers will undergo during their years of service.
Your safest plan of action would be to have the entire container sandblasted by a professional company. This will remove any hazardous materials or residue in the unit and significantly add to your budget.
7. Shape & Size Limitations
With shipping containers, even though there are two main sizes available, what you see is basically what you get. And while you can stack them and attach other units, the space will always be rectangular and the dimensions rigid.
And depending on how many storage containers your home is made of, the space may be noticeably smaller than what you are used to. So before you make the transition, consider all aspects of tiny home living to decide if it is right for you.
8. Reinforcing Sometimes Needed
While these containers are definitely sturdy and made with durable metal materials, they still might need some reinforcement and structural augmentation, leading to extra building costs and layout constraints.
This is particularly necessary if you have altered the base model with many openings, modifications, or cuts to the metal, as this weakens the entire structure and creates a need for outside support.
Shipping container homes are exactly what they sound like — custom-made homes built from steel shipping containers, the ones primarily used for carrying goods on ships, trains, and trucks. These days, people are doing more than transporting goods with shipping containers, choosing to make prefab container homes out of them. But is this a worthy investment? Let’s find out.
Are Shipping Container Homes A Good Investment?
With the rising cost of outright property purchases and mortgage payments amid wage stagnation, people are leaning towards affordable housing options for living or vacation. Affordable housing and small homes go hand in hand, and an increasingly popular option is shipping container homes.
According to an Allied Market Research report, the value of the container home market shares is expected to hit more than $73 million by 2025.
While the cost of shipping container homes may vary depending on various factors like size, the total number of containers used, design, etc., they take up less room, allowing investors to make the most out of any parcel of land.
These custom container homes also have a high resale value of 100% and upwards, making them an attractive investment. Even without reselling them, investors can make a decent sum from renting shipping container homes as vacation houses.
One of the popular short-term rental outlets, AirBnB, pooled $5.99 billion in total revenue in 2021 (Statista, 2022) despite the harsh effects of the coronavirus pandemic. It shows that vacation rentals are good investments, given the present strength of the housing market.
Pros of Shipping Container Homes
Let’s talk about some of the verifiable reasons why investing in shipping container housing makes sense:
1. Durability
When making investment decisions, investors tend to look at properties that can withstand harsh weather conditions. While shipping container homes are understandably not the first thing on people’s minds when they think of sturdy homes, they are durable.
Considering that their original design was to protect goods from adverse weather conditions while traveling long distances over varied terrain, temperatures, and weather, it only makes sense that they can offer human inhabitants the same protection.
2. Flexibility
Prefab container homes offer investors flexible options to recoup their investments, unlike traditional homes that an investor can only sell or rent for residential purposes. But with a custom container home, an investor has more alternatives asides from rentals, such as converting the container home to a co-working space, fixing and flipping the property, and buying and holding to accrue profits.
3. Easy to Modify
Shipping container homes are more easily modifiable than standard homes. With a regular home, there’s a limit to what an investor can do to modify the property (although we've seen some pretty cool stuff) to catch up with modern trends, attract buyers, and maintain affordability in the market.
But with shipping container homes, there is often more room for customization, allowing entrepreneurs to add more floors, stairs, windows, and rooms. These, as well as the modern aesthetic, are what make shipping container homes popular in the current market.
4. Low Risks
With the world possibly nearing another recession amidst rising inflation and rates, there is a ready market for shipping container homes. People are opting to downsize and live in smaller homes to save costs, so there’s bound to be a demand for this type of property.
Prefab container homes are low-risk investments because they can be considerably cheaper to build and maintain, and may hold their value more so than a traditionally built home.
5. Quick Turnover
An efficient contractor can build a shipping container home in a few months, which is nearly impossible with a standard residential property. Because it can be expensive to hire professionals to build these container homes from the ground up, the quickest turnaround might mean buying prefab and modifying.
Prefab container homes are manufactured in factories and delivered to build sites, reducing construction times. All necessary building inspections are carried out at the factories before delivery to construction sites, ensuring that only quality units get out.
6. Mobility
Another edge that shipping container homes have over traditional buildings is the option of moving the property at any time. Shipping container homes are not necessarily anchored on permanent locations, and the property owners can hire shipping transportation services to move them to another location for whatever reason.
7. Fixed Costs
The great thing about shipping container homes is that the manufacturing costs of new containers from factories are fixed. So, it’s easier to make estimates and plan how many investments to make, unlike building regular residential properties with the fluctuating costs of building materials and other fixtures.
In the case of shipping container homes, the only variable expenses are the costs of transporting the container(s) to the building site, preparing the site, setting up the foundation, assembling the container, electricals, and other utility connections.
Cons of Shipping Container Homes
Here are some drawbacks that may make shipping container homes a poor investment choice:
1. Structural Concerns
While a custom container home may be strong at the corners, its flat roof may not be as strong, requiring an investor to build an additional roof to protect it from harsh elements like snow.
Then, the fact that modifications require reinforcements is another problem with shipping container homes. For example, anywhere a window or door is cut out of the container needs new/additional reinforcement, and subsequent renovations may require engineering interventions.
2. Building Permits
Since shipping container homes are modern innovations, getting the necessary permits to build them may be difficult. Many regions do not have regulations covering shipping container homes, and this may be tricky to navigate. So, it is best to visit the local city planning office and ask for information on permits, building codes, and zoning restrictions before diving in.
3. Electricity
Shipping container homes are heavily reliant on modern technology. Unless an investor wants the property off the grid, it requires a lot of electrical inputs to function effectively. Without electricity and modern fittings, this type of property is almost impossible and too expensive to live in.
4. Harmful Chemicals
Given that old shipping containers may have been used to transport harsh chemicals or other harmful substances, they may not be entirely safe for humans to live in. These containers may also have been treated with substances that can help prevent corrosion while in transit, which may linger with the container, even when not in use.
This may have unintended consequences for subsequent inhabitants. So, it is necessary to carry out structural integrity tests and other relevant inspections to certify that a refurbished container is fit to live in.
5. Difficulty in Finding the Right Location
While shipping container homes are now very popular housing options, it’s quite difficult to find already-used homes to buy and flip. In most cases, real estate investors have to build custom container homes from scratch, starting with buying land. Local building restrictions may affect the chances of finding a decent location for shipping container homes, as not all areas allow them.
6. Shorter Lifespan
Shipping container homes are durable but may lack the longevity that traditional houses have. A custom container home can last 25–30 years with proper maintenance, but a standard home generally lasts much longer than that, especially considering homes are passed down generations and still stand the test of time.
Many people own houses that are more than 100 years old because, unlike shipping container homes, residential houses are built to last for a lifetime. So, before investing in a custom container home, it is important to consider the lifespan, as while it is a cheaper investment, it may require an investor to keep building or flipping container homes to remain in business.
7. Associated Costs
While shipping container homes are relatively cheaper than traditional ones, there are still associated costs to consider before investing. These include land, cleaning, electricals, plumbing, insulation, and more. So, determining the cost of a custom container home is not exactly straightforward but rather nuanced.
How to Get A Hard Money Loan for A Shipping Container Home
Getting a hard money loan is one of the ways to finance the construction of a shipping container home. Hard money loans are asset-based financing options, requiring the borrower to secure the loan using real property.
So, if you’re wondering how to get a hard money loan for a shipping container home, consider reaching out to us to apply for capital for your new construction or residential rehabilitation project.
Conclusion
Shipping container homes are quickly becoming a smart investment option for real estate investors worldwide. Like other investments, building or flipping a custom container home requires finances that investors may not have readily available to commit. This is where hard money loans from reliable lenders like Fund That Flip come in to provide capital for these construction projects.