Bigger Isn’t Always Better…

But does this apply to Malibu? As local land experts here in Malibu, we often get requests regarding tiny homes, storage container homes, and pre-fab designed homes. The recent trend has exploded over the last few years. Homes as small as a few hundred square feet up to 1,000 and more offer a minimalist feel that younger generations are being drawn towards. They also have an eco-friendly element in that many feature recycled materials.

Does It Work in Malibu?

Malibu does not naturally lend itself to this recent fad. The permitting process, whether it be a large estate home or a tiny pre-fab cabin, is the same. This means that the effort and money spent all equals the value of the finished product. If the product is pre-fab or based on a trend that expires, the value of the finished property will likely be less than if the owner built a custom home. The steep cost of foundations and building materials are more hurdles.

That said, there is a scenario where it would make sense. As style preferences have become increasingly modern, the right structure on the right piece of property has potential both as a personal retreat and an investment.

Finding the Right Lot

Malibu is known for beachfront mansions, however, it has numerous canyons that are incredibly peaceful and secluded. Areas such as Corral Canyon, Latigo, Mulholland, and Decker offer land at a fraction of the cost compared to those on the beach. The smaller lots have less room for development, making them well-suited for a smaller project. However, lots with a steep grade require the installation of caissons, which is costly. Finding the right lot for a tiny home in Malibu from an investment perspective is very difficult.

There is a loophole. After the Woolsey Fire in November of 2018, many of the old and smaller homes in these canyons were destroyed. These lots have slowly been coming onto the market and for a buyer who wants to circumvent the permitting process, this is a once in a lifetime opportunity. Under the disaster replacement exemption, both owners of homes that burned and those that buy them can rebuild a structure within the same footprint with a 10% addition of size! In addition to this update of style, layout, and structure, the permitting process is also expedited and totals 6 months to a year.

For larger homes that were lost, there is a huge opportunity for a new custom estate as seen in their prices. For smaller homes that were lost, some less than 1,000 square feet, a tiny home becomes a feasible option.

This makes the small burnout lot in Malibu a rare scenario. While a tiny home usually would not be the “highest and best use” of Malibu land, these circumstances do offer a unique opportunity.

The Right Home

Before you get too excited, there are still things that must be considered. To go down this route and have the option to eventually sell at a higher value than the lot itself and cost of the structure, one must install the correct home. Luckily, current housing trends are on your side. Here are a few of our suggestions to consider:

• Use an open-concept layout. A kitchen flowing into a living space and even outside will make even the tiniest home feel bigger.
• Decks and outdoor space. Even though it isn’t technically living square footage, these small homes make for perfect indoor-outdoor living. Oversize wooden decks are the perfect space for morning coffee, sunny afternoons, and summer nights.

• Oversized windows and large glass doors. Feeling connected to the outdoors, especially in the beautiful canyons of Malibu, is what draws people here in the first place. Bi-folding doors are an amazing way to completely open up living spaces and take advantage of California’s great weather.
• Go modern. Whether you install a modern cabin or a concrete box, sharp and clean lines will likely hold their value over time. The shape also helps to maximize ceiling space and the possibility for a loft.

The Bottom Line

Unless it is the perfect property, we wouldn’t recommend it. The effort, money, and time will likely not produce a value equal to that of a custom home.

The exception to this rule are small structure burnout lots. If executed correctly, a modern and high-end small home could become one of the first of it’s kind here in Malibu.

Our burnout lot listing at 4239 Escondido Drive in Latigo Canyon is a rare and excellent opportunity for a custom tiny home project. For more information, click here!

We are happy to answer any questions you may have and help you start your search for the right piece of land.