Key takeaways
- ADU: best when you own a lot in town and want a permanent, financeable, rentable second home.
- Park model: best for RV parks, ranch, hunting and lake land — a cabin-style home under 400 sq ft that moves rarely.
- Tiny house on wheels: best when you want to move, do not own land yet, or want the lowest entry price.
- The legal category, not the look, decides permits, financing and where you can live.
What each one is
Accessory dwelling unit (ADU)
An ADU is a second, permanent home on the same lot as a main house — often called a casita, granny flat, guest house, backyard cottage or mother-in-law suite. It sits on a foundation, is built to the International Residential Code and is permitted and inspected by the city. Some ADUs are detached; others are attached or built over a garage.
Park model home
A park model RV is a cabin-style home built on a chassis and designed for long-term placement, typically at under 400 square feet when set up. It is built to the ANSI A119.5 standard, legally treated as a recreational vehicle, and usually moved once — to its site — then skirted, connected to utilities and often given a porch.
Tiny house on wheels (THOW)
A THOW is built on a bumper-pull or gooseneck trailer and designed to be towed. Most are 8 feet 6 inches wide or less so they can travel without oversize permits, and up to roughly 40 feet long. When built to an RV standard and certified by RVIA or an inspector like NOAH, it is titled as an RV.
Side-by-side comparison
| ADU / casita | Park model | Tiny house on wheels | |
|---|---|---|---|
| Typical size | 300–1,200 sq ft | 250–399 sq ft | 120–400 sq ft |
| Typical home cost (standard finishes) | $190–$340 / sq ft | $150–$260 / sq ft | $175–$300 / sq ft |
| Foundation | Permanent slab or piers | Chassis on piers, skirted | Trailer |
| Legal category | Dwelling (IRC) | Recreational vehicle | Recreational vehicle |
| Permits | City building permit & zoning approval | Placement rules; RV park or rural land | Title & registration; parking/occupancy rules |
| Where it can go | Lots where ADUs are allowed | RV parks, rural and recreational land | RV parks, rural land, tiny home communities |
| Mobility | None | Low — moved rarely | High |
| Ceiling & layout | Full height, multiple rooms, stairs | Full-height main floor, optional loft | Narrow; lofts common for sleeping |
| Financing | HELOC, cash-out refi, construction loan, some mortgages | RV or chattel loans, personal loans | RV loans (if certified), personal loans |
| Insurance | Homeowners policy (often an add-on) | RV or park model policy | RV policy (certification helps) |
| Resale / value | Adds to property value | Sold as personal property | Sold as personal property; easy to relocate to a buyer |
| Rental potential | Strong where local rules allow | Good in RV parks and vacation areas | Good for short-term stays where allowed |
When an ADU makes the most sense
Choose an ADU if you already own a home in a city that allows them and you want a permanent space — for aging parents, adult children, a home office, guests or rental income. Because an ADU is real property, it typically adds to your home's value and can be financed with home equity. The trade-offs are the highest cost per project, a full permitting process, and zero mobility.
ADU rules vary by city — size caps, setbacks, height, parking and sometimes owner-occupancy requirements. Our ADU builders page covers what to plan for, and our Texas tiny house laws guide explains how to check your lot.
When a park model makes the most sense
Choose a park model if you want a cabin feel with a full-size kitchen and bathroom, a real front porch and a main floor without ladders — and you plan to place it in an RV park, on ranch or hunting land, or at a lake property. Park models give you more width and livability than a road-legal THOW while staying in the RV category, which can simplify placement on rural land. They are not designed to be moved often, so plan on one main move.
See our park model homes page for layouts and options.
When a tiny house on wheels makes the most sense
Choose a THOW if mobility matters — you may relocate for work, want to try different areas before buying land, or plan to start in an RV park. It is usually the lowest total entry price, especially without a land purchase. The trade-offs: narrow widths, loft sleeping, a more limited set of legal places to live full time, and financing that depends heavily on RV certification.
See our tiny homes on wheels page for trailer, layout and off-grid options.
What about a custom tiny home on a foundation?
If you own land and want the tiny home to be your primary residence — not an accessory to another house — a custom tiny or small home on a foundation is the fourth option. It is permitted like any single-family home, can often be financed with a construction loan or mortgage, and builds equity like a traditional house. Learn more on our custom tiny homes page.
How to decide: five questions
- Do you own land already? A city lot points to an ADU; rural land points to a park model or foundation home; no land points to a THOW.
- Will you move it? If yes, a THOW. If once, a park model. If never, an ADU or foundation home.
- What does your local code allow? Check zoning, deed restrictions and RV occupancy rules first.
- How will you pay? Home equity favors an ADU; RV loans favor certified THOWs and park models.
- How do you want to live day to day? If climbing into a loft every night is not for you, look at park models, ADUs or a THOW with a main-floor bedroom.
Still torn? Take our 60-second Which Tiny Home Is Right for Me? quiz, or talk it through with Cowboy Tiny Homes — we design and build all three, so we have no reason to push one over another.