How Much Does a Tiny House Cost?

Living in a tiny house can be a refreshing way of scaling down and living simply. Tiny-house costs typically range from $30,000 to $60,000, depending on the design and amenities.

By Glenda Taylor | Published Nov 8, 2021 12:24 PM

tiny house cost

Photo: depositphotos.com

  • Typical Range: $30,000 to $60,000
  • National Average: $45,000

Those looking to downsize their living space or drop out of a fast-paced life are turning their focus to tiny houses. Whether it’s built to your specifications or prefabricated, tiny-house cost ranges from $30,000 to $60,000. The national average is about $45,000, approximately in the same price range as a luxury car.

Many tiny houses are built on trailers, making them akin to campers, but they’re designed to be primary residences rather than holiday abodes. These are among the least expensive, and a budget model could run as little as $8,000. A few tiny houses are built on permanent foundations, just like traditional homes, and these are often pricier—and come with added fees and regulations. A high-end custom tiny house on a foundation could tip the scale at $150,000 or more. Ahead, find out the factors involved in the overall cost of a tiny house.

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Factors in Calculating the Cost to Build a Tiny House  

Just as traditional houses vary in cost from community to community, so do tiny houses. Among the primary tiny-house cost considerations are the size of the tiny house, its design, and whether it will sit on a foundation. Additional factors include the possibility of needing permits and inspections, as well as the cost of the materials and appliances.

Type of Tiny House 

Tiny houses come in two main types: One type is portable and constructed on a trailer, and the other is permanent and built on a traditional foundation. Portable tiny houses are more common because they don’t have to meet the minimum square footage requirements usually required in conventional developments. They are also quite heavy and will need a trailer that’s beefy enough to support their weight. Expect to pay an additional $4,500 to $9,000 for a suitable trailer. Tiny houses on trailers are considered “personal property” and are not subject to real estate property taxes, but they may be subject to other taxes.

Tiny houses on foundations are treated as conventional homes and taxed at the same rate by the local tax assessor’s office. Tiny houses on foundations will incur several additional costs, including the price to construct the foundation, which typically adds about $5,000 to $8,000 to the cost. Tiny-house owners may also face additional community costs like homeowner association (HOA) fees, depending on their location.

Size

tiny house cost 4

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The size of the tiny house is a significant factor in calculating the overall cost. No matter what type of house you have constructed, whether it’s conventionally sized or tiny, you’ll pay on average between $100 and $200 per square foot. Strictly speaking, small dwellings are considered “tiny” if they do not exceed 400 square feet of living space, and some can be as small as 60 square feet. If that’s too restrictive, consider a traditional small home, which is defined as being less than 1,000 square feet.

Building a Foundation

Constructing a foundation for a tiny home will vary in cost from around $5,000 to $8,000 or more. In general, a tiny house built on a foundation will run $35,000 to $68,000, although costs could go much higher. To pour a foundation, the tiny-house owner will also need to purchase the lot or land, which can add substantially to the final cost and is something tiny-house fans might not initially consider.

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Materials Used 

While very small houses are designed to offer the same amenities as conventional homes—albeit much smaller—materials and appliance choices will affect the price. Materials alone range from around $14,050 to $54,800, and some of the price difference is due to special-sized appliances, including scaled-down refrigerators, stoves, and showers. While smaller, these specialty items often cost more than standard-size ones.

Labor and Permits

A permit is usually not necessary to build a tiny house on a trailer because the tiny house is considered personal property rather than real estate. However, a tiny house built on a foundation will require pulling a permit in most communities, which could add another $1,350 to the cost. Inspections are usually covered in the permit fee.

Utility Access

Unless you’re planning on living off-grid and installing solar panels, you’ll need to run electrical lines to the tiny house. Depending on the distance, this could add anywhere from around $250 to hook up pre-existing electrical lines to $5,000 or more to bring electricity to a rural property. Additional utility costs could include fees to connect to a municipal sewer system, connection to a sewer system, or access to natural gas or propane. If you park a trailer-type tiny home on a rented lot with utilities, you will likely pay a monthly fee to use them.

Additional Costs and Considerations

Some costs associated with building a tiny house aren’t as apparent as others, but they can add up fast. While the average buyer will pay around $45,000 to build a tiny house, the following factors can add to the cost. Not all tiny-house buyers will pay these costs; some are only associated with tiny houses built on permanent foundations.

tiny house costs

Photo: tumbleweedhouses.com

Land Surveyor

A survey is usually required for those purchasing a lot or land on which to build unless the property has recently been platted. The survey is used to determine the property’s exact borders, and most surveys will run about $510. This will vary depending on the circumstances; however, the survey could run more if you’re buying an unplatted section of land from another landowner.

Zoning Laws

Not all communities will allow very small homes to be built on in-town lots. If the house does not meet specific requirements, such as minimum square footage, you will not be allowed to build a tiny house there. Some communities have specially zoned developments with small lots designated just for tiny homes, but zoning requirements rarely allow tiny homes in residential developments alongside larger homes.

Contractors and Other Professionals

The cost a contractor and subcontractors (electricians, plumbers, HVAC techs) will charge to build a tiny house is included in the general range of $30,000 to $60,000. However, the going rate tiny-house builders charge varies from community to community, and if a buyer wants to do some of the work, it may be possible to lower some of the cost.

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Prefab vs. Custom Made

Generally, a prefab tiny house, which is short for “prefabricated,” is already built and is waiting for a buyer. Alternatively, a tiny prefab house may come as a kit in various states of completion. For DIYers, ordering a prefab kit that contains pre-cut lumber and instructions can make building a DIY tiny house doable. A bare-bones model can run as low as $4,000, but it won’t include appliances or fixtures. All-inclusive prefab models with high-end appliances can run as much as $180,000.

Mortgage, Homeowners Insurance, and Taxes

If existing homeowners are scaling down from a previous home, they may have the cash from selling their home to purchase a tiny home outright. A mortgage can sometimes be obtained via a tiny-house manufacturer who partners with a financing company for those who need financing.

Traditional lenders typically do not make mortgages on tiny houses, but feel free to check because some lenders may have different policies. If the tiny home is on a foundation, there will be property taxes. Regardless, a tiny home is an expensive investment and should be insured. Expect to pay about $100 per month, on average, for an insurance policy.

Appliances, Furnishings, Decor, and Storage

The type of appliances, furnishings, and decor the buyer chooses will impact the final cost of a tiny house. Fortunately, tiny homes don’t hold a lot, so buyers can’t go too far overboard on furnishings, but the quality of the appliances, windows, and doors will make a difference. Many tiny-house owners save money by purchasing furnishings that do double duty as storage, such as a sofa with a drawer or storage bin hidden beneath.

Maintenance, Repair, and Upgrades

Whether big or small, all houses require ongoing maintenance and occasional repairs when something wears out or goes wrong. That’s the bad news. The good news is that maintenance and repair costs on a tiny home are a fraction of what you’d pay on a conventional full-size home. Costs will relate to the quality of the original materials and the workmanship, so, when possible, don’t opt for the cheapest materials because they’ll wear out sooner.

Resale Value

The verdict is still out on whether tiny houses are investments that will increase with time or decrease in value, as do campers. The ultimate resale value will depend on several factors, including the condition of the tiny house when it goes on the market, whether it’s on a foundation or a trailer, and if it’s been well maintained. Studies are still needed to determine probable resale value, but most tiny homeowners can expect a 3.8 percent increase per year if the house is well kept.

Types of Tiny Houses

Tiny houses run the gamut in style and cost. The national average tiny house cost is $45,000, but that’s just a starting point. The type of structure will impact the final price, and not all tiny houses are built the same. The most common type of tiny home is on wheels, but as long as it has less than 400 square feet of living space, other structures can qualify, such as van conversions, bus conversions, and even shipping container conversions.

tiny house costs

Photo: tumbleweedhouses.com

Tiny House on Wheels

Tiny houses on wheels are theoretically portable—as long as you have a sturdy trailer to transport them. One of the leading manufacturers of tiny homes, Tumbleweed Tiny House Company, constructs several different styles of tiny homes in various price ranges, such as $69,000 for a 220-square-foot house or $57,000 for a 174-square-foot version. These prices are competitive with other tiny-home manufacturers.

Permanent Tiny Houses

Often built on-site by local contractors, tiny permanent houses will cost approximately $100 to $200 per square foot and will be in line with the contractor’s fees on other projects. The foundation will add another $5,000 to $8,000 to the cost if you’re buying a tiny prefab house and having it put on a foundation. If a contractor builds the entire thing, the foundation cost will likely be included.

Shipping Container Homes 

Shipping containers can serve as the shell of a tiny house, and these are favorites for DIYers who want to start with walls and then finish out the interior and the exterior. The cost of the finished project varies widely, but many can expect to pay around $19,600 for a converted shipping container.

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Bus Conversions

Like a shipping container conversion, a bus conversion starts as a bus (or a van), and the owner (or a contractor) then transforms it into a small living space. Very much like a recreational vehicle, a converted van or bus doesn’t require a large truck to tow it because it has its own motor. The cost to convert ranges from under $30,000 for a basic build to over $130,000 for an upper-range build. Most midrange conversions average $60,000 or less.

Prefabricated

Expect to pay anywhere from $4,000 to $180,000 for a prefab tiny house. The cost varies based on whether the buyer orders only a kit, a shell, or a fully finished unit. Some of the more popular prefab tiny houses include:

  • New Frontier Tiny Homes range from $75,000 to $180,000 and offer luxury living.
  • 84 Lumber sells kits in various stages of completion, ranging from $6,900 to $50,000.
  • Jamaica Cottage Shop sells DIY kits and made-to-order tiny homes ranging in cost from $4,000 to $46,250.

Benefits of Owning a Tiny House

The tiny-house trend is sweeping the nation, and with good cause: Downsizing offers both financial and mental benefits. It provides new home buyers with an affordable alternative to a cost-prohibitive traditional housing market. It gives others the means to escape the material-driven rat race and sit back and enjoy life.

tiny house costs

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Financial Savings

It’s not just that a tiny home costs a fraction of a full-size home; homeowners will also benefit from savings on utility costs, property taxes, and the high maintenance costs associated with owning a conventional home. These savings can be used to create a nest egg or to help finance early retirement.

Less Clutter and Cleaning

Big houses require near-constant cleaning, and with today’s active lifestyles, who has the time to mop, dust, and vacuum daily? If the goal is to slow down and enjoy life more, having a tiny house will free up more time to do the things you love. A quick 15-minute cleaning is usually more than sufficient to get a tiny house spic and span.

Mobility

Home is where the heart is, and tiny houses on wheels make a charming nomadic lifestyle possible. You can put a tiny house on a foundation, making it a permanent abode, but most tiny houses are portable and can be pulled anywhere. Ready for a change of scenery? Just hook up the truck and go.

Sustainability

Homeowners who opt to live in a tiny house are choosing a more eco-friendly method of homeownership. Tiny houses require a fraction of the energy needed to heat and cool, and they contain far fewer materials that are not sustainable. For eco-conscious buyers, a reduced carbon footprint is a significant reason for investing in a tiny house.

Tiny-House Building: DIY vs. Hiring a Professional 

Prefab tiny-house manufacturers target the DIY crowd by offering tiny-house kits for sale in various stages of completion. Some require quite a bit of work, while others don’t. Some kits come with excellent instructions, while other manufacturers expect the DIYer to have construction knowledge.

tiny house costs

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For those who have worked in the building trades, DIY-ing a tiny house can be doable, but before going it alone, consider the following issues. Suppose the home will be constructed on a foundation. In that case, the local building authority will likely have some rules to comply with, such as having licensed professionals do the electrical wiring, plumbing, and HVAC work.

Before taking the plunge and building a tiny house, understand that you won’t have any warranty if you make costly mistakes. Often, a contractor will offer a 1-year guarantee on workmanship. In addition, it takes quite a bit of time to construct a tiny house. After all, all the elements present in a traditional home are included—they’re just scaled down. Scaling down requires precision and skill, and most tiny-home buyers will be happier if they leave the construction to the pros.

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How to Save Money on Building a Tiny House 

If you’re in the market for having a tiny home built but want to save a bit while still enjoying the benefit of having a local professional handle the construction, consider the following tips.

  • Source your own materials. When a contractor purchases the materials to build a tiny house, they will typically charge a service fee of around 10 percent of the cost of the materials. By ordering (and picking up) the materials yourself, you can avoid that fee.
  • Start with used appliances and furnishings. Scaled-down fridges, freezers, and tiny showers often cost more than their standard big brothers, but construction reuse-it centers can turn up a wealth of used-but-still-OK small fixtures. You can always update later.
  • Do some of the work yourself. It’s a good idea to leave the framing, wiring, plumbing, and ductwork to the pros, but consider installing the roof shingles, painting, or sealing and weatherproofing if you have some building knowledge.
  • Keep the design simple. Some tiny houses are works of art. If function is more important to you than appearance, though, opt for a more straightforward design that will save you some money.

Questions to Ask a Tiny-House Builder

Once you’ve decided a tiny house is in your future and you’re ready to start meeting with contractors or manufacturer reps, help ensure a smooth process by asking a few pertinent questions.

tiny house costs

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  • How long will the project take? It’s a seemingly obvious question, but the answer is important to know if you’re planning on moving into your tiny home on a specific timeline.
  • Do you offer financing? If you’re unable to pay cash for the tiny house, this should be the first question. A small local builder may not be able to finance the project, but a more prominent manufacturer, such as Tumbleweed Tiny House Company, can often provide financing.
  • What is the final cost I can expect to pay? When perusing tiny-home websites, you will likely see costs associated with different models. These costs typically are not representative of what you will eventually pay. They often do not include appliances, furnishings, or the cost to connect the tiny home to utilities.
  • Do you customize floor plans? Tiny-house manufacturers will publish a dozen or so tiny-house designs, but if none suit your situation, don’t be afraid to ask about customizing. In many cases, a sleeping loft can be added or a larger kitchen installed. Find out and get a firm quote for the requested changes.
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FAQs

Tiny houses are trending, and they offer a simplified, decluttered lifestyle. Still, they aren’t the solution to everyone’s housing issues. Some questions are to be expected from those seriously looking at building a tiny home and adopting a scaled-down lifestyle.

Q. Is it cheaper to build or buy a tiny house?

That all depends on the quality of the house and whether it’s a custom build or a prefab. In most cases, tiny-home buyers can expect to pay between $30,000 and $60,000 for a tiny home, whether they buy a completed one or have one built.

Q. Which states allow tiny houses?

While no states have outright bans on tiny houses, some states welcome them more than others. Tiny-house-friendly states include California, Maine, Colorado, Oregon, Texas, and Utah. Before buying a tiny house, contact the local building authority of the community where you want to live to find out if they’re welcome.

Q. How much does it cost to build a tiny house from scratch?

The nationwide average is $45,000, but that can vary depending on the size, quality of materials, and additional costs, such as permits, inspection fees, and the cost to build a foundation if desired.

Q. How long do tiny houses last? 

A well-built tiny house should last just as long as a traditional house, but keep in mind that it will need routine maintenance and occasional repairs. The quality of materials and workmanship factor into the tiny home’s useful life as well.

Q. Can I build a tiny house for $5,000?

For $5,000, you may be able to purchase a bare-bones tiny-house kit and DIY the project, but it won’t include all the amenities, such as wiring, insulation, and interior appliances and finish.

Sources: HomeAdvisor, Tiny Heirloom, VanClan, Realtor.com

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