How Much Does A Tiny House Cost?

Hannah Griffith
12 min read
November 7, 2022
tiny house cost

It’s time to think about your housing options. Where do you want to live? Where do you want to enjoy peace of mind? Tiny houses give you a unique living experience. A tiny house has everything you need but at a minimum price. In addition, some see a tiny house as less burden on nature and environment friendly.

How much does a small house cost depend upon several factors. Expenditures like permits, insurance, maintenance, land preparation, zoning, and location increase the small house cost. Similarly, you still need to connect it to the sewer system and electrical grid. Again, this may cost thousands of dollars.

Although many click baits tend to boast about constructing a tiny house for under $10,000, the reality is the average cost to build a tiny house is well above $40,000. However, barebones structures can be as low as $3000. On the other hand, a tiny luxury house can cost up to $170,000 and even more.

What Is A Tiny House?

A tiny house is a type of home much smaller than a typical home. There needs to be an agreed-upon definition for tiny homes. However, an average tiny home can be about 225-600 square feet. According to some, a house of less than 1000 square feet is small, and a house of less than 400 square feet is a tiny house. Compare it to a regular single-family home with a size of 2273 square feet. For example, It can be eight times shorter than a typical home.

Tiny houses are part of a social movement known as the small house movement. This movement advocates simple homes of small sizes. People love having a little house because it is cheaper, environmentally friendly, easier to maintain, flexible, etc. The difference between a little house and a camper is that a tiny house is a primary residence. In contrast, the usage of a camper is for a few weeks in a year only. 

Tiny House Cost: How Much Should I Budget?

Like their bigger counterparts, tiny houses are subject to a wide range of price variations. If you use salvage material and go for a home on wheels, the cost of a tiny house can be as low as $10,000. However, the average cost of a tiny house can be up to $60,000. Higher-end tiny homes are pricier than this. For example, there might be $150,000 in land cost for a typical small house. And up to $50,000 might be the cost of materials. Finally, the labor cost will be 20%-50% of the total cost. You have to add taxes and permits on top of that. Home appliances are only sometimes cheaper.

Cost To Build A Tiny House

The typical price range of a tiny house is $30,000-$60,000. However, the average price to build a tiny house is $45,000. If you want to DIY, you can save on labor costs. However, other expenses, from materials to land and permits, still apply.

The cost of building a tiny house also depends upon the amenities you need. A small home can be minimalist or luxurious,so the cost range can be diverse. The cost of land is the most considerable expense in this regard. 

Similarly, tiny custom-built homes cost more than prefab ones. If we calculate in sq. ft., prefab units cost $200-$250 per square foot. While custom builds price range is $250-$400.

How Much Does It Cost To Buy A Tiny House?

Buying a tiny home will cost you more than building one. Moreover, the extent of customization will also need to be included. How much is a tiny house depends on the space you need along with build quality. Prefabricated tiny homes are available for a price of up to $50,000. However, if you want more features and a touch of luxury, the cost may go up to $75,000. Most companies offer free shipping, which is a plus point.

Currently, tiny homes do not qualify for a conventional mortgage plan. Thus you need to get a personal loan or pay cash for a little house. However, as this housing sector grows, we might see some mortgage options for tiny homes in the near future.

You can reduce the cost of a tiny house by purchasing a preowned one. You may get it for $30,000 or less. The only downside is that pre-owned homes are less customizable. So you may need to spend more on repairs and customization. However, it can be an excellent place to start if you are low on funds.

Cost Of A Traditional Home Vs. Tiny Home Cost

Comparing the cost of traditional homes to tiny homes is not an apple-with-apple comparison. Both are different products with different use cases. However, when the price of conventional homes is out of the question, the only option that remains is tiny homes. According to CNN, the cost of a traditional home rose 16.9% to $346,900 in 2021. It is the record-highest price hike since 1999, and the trend continues.

On the other hand, an average tiny home costs under $50,000. Thus it is about seven times less than a traditional home. In some cases, the price of a tiny home can be ten times lower than a conventional home. Despite this price benefit, mortgage loans are not available for some houses. People buy tiny houses on construction or personal loan.

Living in a tiny house is less expensive than in a traditional place. There is less space to clean, heat, cool, and repair, so energy bills are low, and maintenance is more manageable. Home inspection, appraisal, and insurance services are also cheaper than a traditional home.

Having said that, the long-term scenario of price comparison is different. Traditional homes are appreciating assets. In contrast, tiny houses are depreciating assets. It is because the land cost for tiny homes will increase if the house has the land, but the building price will decline.

Tiny House Cost By The Square Foot

The size range of tiny homes is between 100 and 400 square feet. However, because most bylaws are for traditional homes, tiny houses of minimal size may not be considered a home. Therefore  we can assume a tiny home to be at least 200 square feet. 

The cost by square feet for a tiny house is $200-$400. This cost depends upon the construction material and customization applied. For example, most prefabricated units are available in the $200-$250 per square foot range. Custom houses can be between $250-$450 per square foot. If you have some special needs or material demands, it may cost more than that. Also, remember that if you go for a very small size, your total cost might be lower, but the price per square foot will increase.

Considering these rates, we can calculate the average price of tiny homes in square footage. For example, a 400 sq. ft. tiny house may have average costs of $80,000-$100,000. This cost includes labor, material, shipping, etc. For a custom build, the price can be in the $100,000-$160,000 range. 

Average Cost Of A Tiny Home By Type

Tiny homes provoke out-of-the-box thinking. For example, you can have a tiny house on wheels, in a tree, or on a regular foundation. Similarly, shed, trailer and container-type options are available. Each type has a wide range of costs. No one type fits all formulas. You have to do a cost-benefit analysis and choose a construction type that best suits your needs and style. For example, you can order the outer shell and do the interior work DIY. In this way, you can have a lot of customization without paying extra.

Unforeseen Costs Of Tiny Homes

The tiny home is a new concept, so it has many unforeseen costs compared to a typical home. So before diving in for a tiny house, you should be aware of possible hidden fees.

Poor Resale Value

The resale value of tiny homes is inferior. If the house has land, the price of that land may appreciate over time. However, the cost of structures and appliances will decrease. Also, only some people want to live in a tiny house, so it will take time to find a customer.

Furniture and Appliances Compatibility

Not only might your current furniture and appliance not fit well in a tiny home, but you may need help finding new furniture to fit in that size.

Home Insurance Challenge

Finding good home insurance is challenging for a tiny home. Part of the problem stems from the fact that evaluating a tiny home's worth is challenging.

Storage Challenges

A tiny home means less space for everything. Thus it can only store some of your items. As a result, you may need to get rid of many things or replace them with smaller items to fit in.

Legal Requirements

You can not simply park your tiny home anywhere or build it on any land. Zoning laws may have restrictions in this regard. Similarly, many localities might not allow a small house or may impose extra fees.

Utility Challenges

Getting a utility connection is challenging for a tiny house. You may have to pay equal fees like typical homes. Avoiding utilities and installing your own solar and septic systems is possible. However, it will cost you extra money.

Tiny Home Cost Factors

A tiny home does not have a strict definition like a TV. Thus we need to find out what you want to include in a little house when calculating the price. Two houses can differ in size, materials, land, labor, appliances, square footage, etc. A tiny home cost depends on several factors. Let us explore these factors together.

What Is The Size Of The House?

When considering the size of a tiny house, there are common and not-so-common sizes. You will get the best price in the standard size range. For example, if you want to build a tiny house, it may cost more because economies of scale do not apply to non-standard sizes. The cost per square foot for a normal range starts at $150. The higher ends cost $300-$400. The custom layout will cost more. Prefab will cost less due to mass production.

Which Materials Do You Want To Use?

Materials include all hardware and items required to establish a structure. It includes paint, lumber, framing, flooring, fixtures, etc. The appliances do not count in materials. Like size, the more material a tiny house uses, the costlier it will be. Builder-grade material costs less, while high-quality material with custom options will cost more. Market fluctuations and supply chain problems also affect material pricing. A tiny home's average range of materials is $12,000-$60,000.

Utility Access

A house needs access to many utilities to be livable, whether tiny or typical. First, you need electricity. If there are nearby electrical lines, it may cost only $200-$300 to hook up the connection. However, it may cost up to $5000 for a connection in rural areas. Secondly, the sewer system may cost $500-$20,000.

Similarly, a natural gas connection will have connection costs and monthly bills. In addition, you may have to pay parking fees if your tiny house is in a parking lot with utilities. However, you can avoid some of these costs by using alternatives. For example, if you have enough solar power, you may not need an electricity connection for your tiny home. Similarly, if you use a gas cylinder, you don't need a gas connection, etc.

Labor And Permits

The land cost is variable because not all tiny homes need land. Also, the price of land varies a lot. For example, land costs can range between $5,000-$150,000. However, you need a building permit to build on the land. The average price of a building permit is $500-2,000.

Whether you use the land or not, you need to pay labor costs if it is not a DIY project. Doing it entirely on our own is not possible for some of us. However, you can do some more manageable parts to save on labor costs. The labor cost can range between 30%-60% of the total cost. Labor costs will be higher in areas with high living costs and vice versa.

The Bottom Line: How Much Does A Tiny House Cost

  1. The average cost of a tiny house is $30,000-$60,000. So if you don't have money for a traditional home, you may go for a small home. However, to fully enjoy your small place, you also need to appreciate its philosophy. It’s about letting go and refocusing your priorities. 

  2. How much does a tiny house cost? Maybe $60,000. However, you should also add the cost of freedom and peace of mind. For example, a home is the most significant investment for most people. However, it is also a vast freedom blocker. Not only is your investment locked in it forever, you need to maintain it, and you can not get away quickly. A tiny home is the solution to all these problems. 

  3. Despite all these benefits, a tiny home is not for everyone. If a minimalist lifestyle is not your philosophy, you may add all the luxuries of a traditional house to a tiny home. But, sadly, this will not only fail the purpose but will also increase the tiny house cost. If you need any further help in this regard, please feel free to contact us.