Owning a tiny home is a dream for so many people. We all have different reasons why, because there are so many ways that a tiny home can be beneficial. Many are attracted by the ideal of a simpler lifestyle, a less costly lifestyle. You could say that people of this mindset are looking for a way to live more fully with a house that’s less full of stuff.
But how much does it really cost to downsize like this? What are all the factors that go into the design, the construction, the location, and the operations of tiny house living? Does it truly represent an opportunity for everyone to save money and enjoy a less-stressful life?
How much does it cost to build a tiny house?
Tiny houses are just like regular houses in one sense: there are a lot of different options! It’s impossible to nail down a single price that you’re guaranteed to be able to pay for a tiny house. With that in mind, you’ll find that the average cost across all these possibilities is more or less in the range of $30,000-$40,000.
That being said, it is still possible to find excellent examples of tiny homes that have been built by hand, by their owners, for less than $10,000.
It is also not difficult to find tiny homes built by professionals, in a factory, costing more than $100,000. In some cases, the prices of the biggest and fanciest models get closer to $200,000.
For a factory built tiny house on wheels, fully furnished, the median price is actually just a little bit less than $60,000 across more than two dozen tiny home building companies.
But what goes into these cost ranges?
What Costs Should You Consider when Building a Tiny House?
One of the most important things to consider when we’re talking about tiny houses is that we’re not just talking about a house. We’re talking about everything that comes with a house.
We’re talking about first, the land the house sits on, and then we’re also talking about the actual materials that you need to build the house, including tools.
There’s also the matter of who’s going to put the house together. Will you be building the house yourself, based on your personal expertise in construction, or will you be trusting that assembly process to paid professionals?
And of course, once the house is built, have the expenses stopped? Of course they haven’t; owning and running any kind of household involves ongoing expenses. Not the least among these are the property taxes that you will certainly need to deal with, if you’re putting your tiny home on your own land.
We’re going to take a careful and detailed look at each one of these and other aspects of the true costs of owning a tiny home. Based on this information, you may or may not come to the conclusion that owning a tiny home is right for you. Every individual circumstance is different, and as will see, there is a wide range of possibilities for how these costs will affect you.
There are many ways to save money on some of these costs, and the location where you build your house and where you live in it may have the biggest effect of all. You should be sure to take all of these factors into consideration during the planning process for your tiny home.
Cost of land
Real estate is one of those commodities that has an almost permanently constrained supply. It’s really, really, really hard to make more land. So you have to get it where you can get it.
And that makes all the difference. If the only places available to you are empty lots in a dense urban environment, you’re going to spend a large amount of money on your land, probably a lot more than you will pay for the house itself.
By contrast, there are many places out in the rural parts of the United States and other countries where you can have land at a fairly sharp discount. In some cases, for example, you can find about an acre and a half starting at around $45,000 per lot. Of course, this comes with the drawback of being very far removed from the culture and services of the big cities.
Depending on where you go, though, be prepared to pay $200,000 or more for a chunk of land to park your tiny home on, if you intend to own your own property in a city. On top of that, you have to consider the cost of making the utility connections. Installing a new sewer system connection can set you back upwards of $10,000.
The alternative is to build a tiny house RV that you can take to RV Parks, as long as it’s certified and road safe. In that case, you’re still looking at daily or monthly fees that can be just as expensive as a mortgage in some cases, or more.
Materials
Thetinylife.com put together this excellent basic breakdown of just how much it can cost to get all the materials you need for your tiny house:
- Trailer: $3,500 to $5,500
- Windows: $500 to $6,000
- Metal roofing: $500 to $2,000
- Insulation: $500 to $3000
- Siding: $1,000 to $2,500
- Lumber: $1,000 to $5,000
- Interior finishes: $500 to $4,000
- Electrical: $750 to $3,000
- Shower: $400 to $1,000
- Water heater: $500 to $1000
- HVAC: $500 to $1,500
- Toilet: $20 to $800
- Fixtures: $1,000 to $5,000
- Appliances: $400 to $4,000
- Interior wall: $500 to $1000
- Flooring: $300 to $1,000
- Fasteners/Adhesives: $1,500
- Paint: $50 to $200
You’ll notice that there’s a considerable amount of variation in some of those costs. This is partly a function of the size of the house, because larger houses obviously are going to require larger amounts of electrical and plumbing work, and you will likely be able to fit more of the fixtures and appliances that you want in them.
But another component of this is the type of appliance that you select. Looking at the toilet cost for example, the $20 range is about what it’ll cost to get the most basic possible composting toilet, whereas an $800 toilet is something more like what you would find in a typical luxury apartment.
Labor
This is a big one. When you buy a tiny house from a factory, about 50 to 60% of what you pay is just to cover the labor costs. There’s a lot of value in that 50 to 60%, though, because you’re not just getting the convenience of having somebody else do the work for you. You’re getting the reassurance that your house is being built by people with expertise and experience.
This rule applies just as much to ordinary houses as it does to tiny houses, so in many ways you’re still coming out ahead even if you buy a tiny house from a builder, but only in terms of sheer total dollar value. In many cases, professionally built tiny houses will actually cost you more per square foot of living space in a traditional house will.
Taxes
If you build your tiny house on a foundation on property that you own, you will still owe property taxes to the government just like any other house. They will be assessed according to market value, so choose wisely the market you build in. A new property in Illinois is going to cost you a whole lot more in property taxes then one next door in Indiana, for example.
Resale Value
It’s really important to keep in mind that the market for tiny houses is a lot smaller than the overall real estate market. Tiny houses can be a very personal thing, and you may have a hard time finding somebody to buy your tiny house if you ever find yourself in a position where you have to sell it.
What that adds up to is that buying or building a tiny house can very easily become a lifetime commitment. Plan accordingly.
How can you save money when building a tiny house?
If you’re starting to feel a sense of sticker shock from all the costs outlined above, keep in mind that there are still excellent ways for you to reduce the potential costs of building a tiny house.
In particular, we’re going to take a look at what’s involved in turning it into a DIY project rather than working entirely with contractors or professional builders. Will also discuss the possibility of just building a tiny house shell to start with. We’ll even take a look at the possibility of downsizing your plans, and the general savings that you can enjoy by using fewer major appliances.
Do it Yourself
Building your tiny house with your own two hands is probably one of the most effective ways to save money in the process. Just consider the costs outlined above for labor when you have to hire it out.
It’s important to recognize, though, that this doesn’t mean that it will be free. As with all things in life, there’s an economic opportunity cost that comes with every choice, one way or another. Hiring somebody else to build your tiny house for you cost a lot of money, but it’s also much less time-consuming for you.
While somebody else is building your house for you, you can still work, play, sleep, and just generally live life as you normally would. That’s not the case, of course, if you are the one personally responsible for hammering posts and joists together.
Building your tiny home yourself will almost certainly be a great deal easier on your wallet, but by necessity, you will have to devise a different type of budget, and consider alternative costs.
How long are you willing to wait for the completion of your tiny house? When you work with a contractor, they generally have a timeline that you can more or less count on. There’s always unforeseen circumstances, and construction delays are normal on almost any project, but you can at least have a good idea.
Doing it yourself may not be so cut and dried.
The contractors who would build it for you usually do so as a full-time job. Do you have that kind of time available to dedicate to the project? Unless you’re going to start building tiny houses for other people, and selling them, you’re talking about a significant project that will still cost you a decent amount of money, and isn’t paying you anything back for your time, except in terms of the future benefits of being able to live in your tiny house.
So you have to ask yourself, what will you be missing out on depending on the amount of time that you need to spend to build this house yourself?
Time is Precious
It’s very easy for people to get lost in their hobbies, and dedicate time to them that in retrospect, they should have dedicated to their day jobs, or to their families. Depending on your reasons for wanting a tiny house, we may not be talking about a hobby in your case, but those potential costs are still there.
If the purpose of building and owning and living in a tiny house is to improve your life, and that of your family, you want to make sure that the time you are able to dedicate to it makes sense in that context.
By no means are we pointing all of this out to discourage you! It’s just that while building a tiny house has benefits that very often outweigh the costs, when those costs are family life and employment, that’s not the case. What we’re trying to say is that when you build your tiny house yourself, you often have to get creative.
A DIY tiny house project can be a great way to bring a family together. Whether you’re working with your partner to build the house side-by-side, or using it as a teaching opportunity for your children, it’s a powerful way to create memories that will have a beneficial effect throughout your lives together.
In many ways, this is an easier question to answer if you’re single and living alone, but there are other costs still, such as the question of full-time employment, education, and other possibilities that can’t share the same time that goes into a project of this scale.
Either way, there’s another other crucial factor that you have to consider when it comes to planning the time that it will take for you to complete your “free” DIY tiny home construction project.
How Skilled are You?
If you’ve been working in construction all your life, and have decades of successful experience building wood frame houses, then this is kind of a non-issue. If you don’t have any experience in construction, on the other hand, you’re looking at quite a big commitment of time and energy.
Even if you do have a limited amount of construction experience, there’s still a learning curve when it comes to building a tiny house. You have to make sure that you’re building the house according to the most recent standards for the area you’ve decided to live in.
Whether your intention is to build your tiny house as an RV unit that will be on the road frequently, or you’re building it on a permanent foundation, it has to be done right, or else it could be considered illegal.
That means taking the time to get familiar with the laws in question, and make sure that your plans conform to those requirements. This probably means consulting with engineers, or even attorneys, and those have costs as well.
An alternative possibility when you lack your own construction experience, is to attend a workshop organized by one of the tiny home building companies. For less than $1000, you can attend two days of classes that go over all the aspects of what goes into building a tiny house, and then you can take that new instruction and experience back to your own project.
You don’t need to let any of these costs discourage you, though! The best way to learn anything is by just doing it. Make sure you take the time to learn how to do it right, but accept the fact that you’ll make some mistakes along the way, and if it’s right for you, go for it! What you learn about construction, and about yourself, from the process of building your own tiny house is something that you’ll be able to take away as one of the greatest benefits of the whole thing, and it will serve you for the rest of your life.
If you build your house yourself, you’ll be intimately familiar with every aspect of the shelter that keeps you warm and dry, and that’s pretty special.
Using a Tiny House Shell
Most of the pretty, inspiring pictures that you can find online for tiny houses are fully finished and furnished. The walls are insulated and paneled over, all the electrical work is done, the plumbing is installed, and everything is connected to the right appliances in the right places.
What if you didn’t do all of that at once?
Perhaps a bigger question is this: what if you’re worried about your construction abilities when it comes to the essential structure of the house, but feel confident that you could fit out the interior yourself?
In either case, starting with a tiny house shell represents an elegant compromise.
We’ve previously discussed what a tiny house shell is, and the benefits that one provides. We explained that the average cost range for buying or building one is between $22,000 and $75,000, approximately, factoring in both material and labor costs.
To recap, a tiny house shell is simply the outer structure of a tiny house. It’s the fully-framed walls and roof, attached securely to the trailer or foundation. At the low end of the potential costs for this option, it often does not include any wall insulation, nor are any of the plumbing or electrical fittings installed.
Depending on the company you work with, they may offer those next construction steps as options, driving it up to the higher end of the potential price range.
Depending on how you build or buy it, it may or may not have a sleeping loft built inside. In any case, it is quite literally just an empty shell.
What are the benefits of this? In short, building your tiny house first as a shell gives you the option of having the most important part of the building professionally constructed, leaving the rest up to you.
If you’re going to build your tiny house yourself, you’re obviously going to start with a shell anyway, so this option refers more to having just part of your house be professionally built.
What it means is that you will have less to worry about regarding whether the house’s construction is up to code. You’ll be able to design, build, and install your own custom furniture, cabinetry, and appliances, feeling well assured that the main structure itself is as safe as can be.
You’ll also generally be able to work on finishing the interior on a more generous timeline, not having to worry so much about weather conditions and other circumstances that would force you to build quicker. You’d have a ready shelter, if nothing else.
Using Less Furniture or Fewer Appliances
Going back again to the pretty inspirational pictures that you can find all over the Internet for beautiful tiny house designs, you’ll notice that quite a lot of those have very nice furniture and high-end appliances inside.
There’s certainly something to be said for quality. You generally do get what you pay for. Especially when it comes to appliances, many of the more expensive, higher end ones are very energy-efficient, and they come with warranties. There’s a great deal of value built into that, but the upfront costs can be rather high, even with financing.
With tiny houses, you force yourself to take the opportunity to evaluate your true needs when it comes to your lifestyle. That’s mostly just because the amount of space is sharply limited compared to a more traditional house. You simply don’t have enough space for all the same stuff.
One of the keys to saving more money in the process of downsizing to a tiny house is making sure you’re approaching it with a more helpful paradigm.
Rather than asking yourself, “how much of this stuff can I take with me,” or “what will fit,” ask yourself, “what can I get rid of,” or “what can I do without?”
If you’re downsizing from an already abundant life, selling off the stuff you don’t need is a way to offset the costs, but you might find it just as satisfying to simply give things away to somebody else who needs it more.
If you don’t already have furniture and appliances that you want to put into your tiny house, and you’re on a strict budget, then it’s a really good idea to consider which things you’re truly going to need.
You may not have thought of it before, but it is entirely possible to live well in a tiny house without a refrigerator, and without a toilet that uses running water.
One important aspect of tiny homes that attracts many people to the lifestyle in the first place, as we mentioned at the beginning of this article, is the idea of doing more with less, or living conservatively. Living a less costly lifestyle doesn’t just refer to the amount of money you spend on things, but also to the amount of resources that you use, such as electricity and water.
By adopting a lifestyle that doesn’t involve as many electrical connections, you can save money not only on the cost of the appliances that you don’t buy, but also the ongoing costs of running and maintaining those appliances. It’s kind of a way of killing two birds with one stone, and it comes with side benefits as well.
Naturally, a lifestyle that’s so far removed from what has come to be considered normal in our society isn’t for everyone, but it’s worth considering whether it could be for you. It may only involve switching to a diet that includes more dry or canned goods that don’t need refrigeration!
If it definitely isn’t for you, that isn’t to say that you still don’t have opportunities to save money. If you’re mechanically handy, buying used or older appliances can be a fun project, especially if you have the know-how to upgrade their efficiency. Vintage appliances also have a tendency to add charm to a house, and make it feel more cozy.
Likewise, you can save money on furniture by recycling or restoring older items, or repurposing things that were never originally meant to be furniture in the first place, like building a couch out of wood pallets, for example.
As for the plumbing, though, it’s almost always a good idea to learn how to use a composting toilet, rather than opting for a more standard model. The most up-to-date designs are excellent at preventing bad smells from escaping, and they definitely save a huge amount of water.
Designing your bathroom in that way will also make for a less complex build, and save space for other things that you might want to have in your house.
What’s Best for you?
Switching to a tiny house lifestyle should never be a small decision. That doesn’t mean that it isn’t the right decision. Much of the value of a tiny house has less to do with the financial and material costs of building it, and more to do with the specific lifestyle that it allows you to have.
Tiny house living is in many ways about setting aside material concerns, and living with a greater sense of connection to life itself, to the earth, to the people around you. You can’t really put a price on that.
You do have to plan carefully to make sure that you have the resources necessary, one way or another, to be able to afford the switch to a tiny house. But if it’s the right thing for you, you’ll find a way to make it work. It might mean taking a little bit longer, or doing a little bit more work with your own hands, but you will find it rewarding.