The real estate adage of location, location, location certainly applies to this teeny, tiny Florida house with a humongous price tag.

The home in Santa Rosa Beach measures just 196 square feet and is on the market for $1,095,000. That comes out to a remarkable $5,587 per square foot. But the price reflects much more than the diminutive dwelling.

“It’s a quarter-acre lot, and the land is very valuable. We based the price not just on the dwelling itself, but the land it’s on,” explains listing agent Brad Dahler, with Berkshire Hathaway HomeServices. “It’s in a very dense area of 38 Highway and is on a pretty large piece of land comparatively speaking to the rest of our area.”

The property is just a short walk to Seagrove Beach, a popular Panhandle destination.

The home was built in 2016 with a corrugated metal roof, shiplap walls, and a hardwood floor. But it’s basically a single room and a bathroom.

Due to the lack of space, the “kitchen” resembles a hotel kitchen with a sink, small refrigerator, microwave, and coffee maker.

The bathroom is equipped with a claw-foot tub and a pedestal sink. The shower is outside.

There’s also a second option for soaking: “It’s got a little plunge pool on the exterior of it,” Dahler says.

As a short-term rental, the house has raked in around $50,000 a year, Dahler says.

“My seller has talked about putting two or three more other similar homes to the one that’s on it and connecting them all with a porch,” he says. “You could tear [the tiny house] down or move it and build a custom home or a couple of custom homes.”

The only stipulation is that the property must stay residential.

The previous owner lived in the home full time, but Dahler believes the eventual buyer is going to be a savvy investor.

“If the dwelling does $50,000 a year in revenue and you added two more, and they did the same thing and you could rent each one for $50,000, the numbers make a lot of financial sense at $150,000 a year gross rental income,” he explains.

If you can stomach the idea of paying over a million bucks for a single room, there just might be a serious upside to this tiny opportunity.

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The post Tiny-House Madness: 196-Square-Foot Home Available for $1.1M appeared first on Real Estate News & Insights | realtor.com®.