Living small can have big advantages — particularly when it comes to cost. With fewer square feet to build, maintain, and keep lit, cooled, and heated, a tiny house can be far cheaper than more traditional iterations of the American dream.
Still, not all tiny houses come with tiny price tags. While it’s possible to build an off-the-grid tiny house for $10,000, some luxury tiny homes cost $100,000 or more. On average, a tiny home costs just over $50,000 to build, not including the price of the land it’s sitting on, though purchasing a prebuilt tiny home could rack up a higher price tag.
What Is the Average Tiny House Cost?
While, as we’ve seen, the cost of a tiny house can range significantly, the average price is usually somewhere between $30,000 and $60,000, according to Porch.com. Compare that to the latest median sale price for a non-tiny home — $434,000, according to real estate giant Redfin. (That’s before accounting for peripheral expenses like closing costs.) Bear in mind, though, that tiny house prices generally don’t include the land where the house will be located or the cost of any water, sewer, or electrical service hookup.
That’s a pretty hefty difference, although of course the tight housing market has an effect on the cost of prebuilt tiny homes, too. It’s not uncommon to see tiny homes listed for close to (or even over) $100,000, especially in highly desirable areas.
Many tiny houses are so relatively low cost that they don’t meet the minimum threshold to qualify for a home loan, although there are different types of mortgage loans and you can shop around to find a lender that might finance your home.
First-time homebuyers can
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Tiny House on Wheels vs. Foundation
As you may already know, tiny homes can be built on wheels (though they’re not usually as mobile as standard mobile homes) or built on a foundation just like a larger home. Along with giving their owners some flexibility when it comes to location, building a tiny house on wheels can also change the price tag.
According to data from The Spruce, a tiny house on wheels costs an average of $60,000 to $80,000, while those built into foundations start lower — at $35,000 — but can run substantially higher, to $180,000.
Many other factors also play into the overall tiny home cost, too, which we’ll take a closer look at next.
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Factors Affecting Tiny Home Cost
What other factors affect your tiny home’s bottom line? Here are some of the most impactful.
Size and Square Footage
While “tiny” is a fairly open-ended description, according to builder United Tiny Homes, these structures are generally between 100 and 400 square feet. There is some wiggle room on either end, though, and 500-square-foot tiny houses aren’t unheard of.
As you might expect, the larger your tiny house is, the more materials it takes to build — and therefore, the higher its price is likely to be. Still, since even the largest tiny homes are so much less expensive than traditional homes, it may be worth it to have just a little bit more room to roam.
Building Materials
Another factor that’s true for tiny homes as well as their larger counterparts: The higher the quality of the building materials, the more expensive the tiny home is likely to be. (However, it may also be able to withstand the test of time better, lowering overall maintenance costs and actually saving you money over time.)
However, some tiny home builders save by using recycled or reclaimed materials, which can substantially lower the overall cost (though make the project more time- and effort-intensive).
Labor and Professional Services
Labor is, of course, another major factor. If you’ve got the skills to build your tiny home yourself — or the patience to learn them — you stand to save thousands of dollars on what you’d spend to have a professional builder do it for you. How much does it cost to build a tiny house when it comes to labor? Construction work usually starts around $20 per hour, depending on the specific project, and that’s not counting the cost of materials and any overhead a contractor would charge. Professionals such as a plumber or electrician can run into the hundreds of dollars per hour.
Of course, when it comes to tricky and even potentially dangerous aspects of building a tiny home, like running electricity, professional know-how might be worth the price if you’re an amateur.
Building vs. Buying a Tiny House
When you’re budgeting for buying a house, bear in mind that buying a premade tiny home could be a lot more expensive than building one yourself — but as we’ve seen, you can also rack up a large overall bill on building your own if you rely on professional labor to do so. Here are some other considerations to keep in mind as you decide which route is right for you.
Custom Build
Having the opportunity to literally dream up your perfect tiny home and bring it to life might be priceless to you — and, again, if you’re able to DIY the project from start to finish, it might cost you less than buying someone else’s already-built dream. However, working with a contractor and architect to draw the blueprint and build the entire home from scratch could be a lot pricier. The good news is, tiny homes are popular enough now that services specifically designed to build tiny homes are more readily available.
Prefab or Kit Homes
Looking for a good middle road between a custom-designed, DIY tiny home and buying one that’s ready to go? Tiny home kits are available for prices starting around $12,000 or so — although this figure of course doesn’t include the land the tiny home will need to sit on, or the labor it’ll take to get it from flat to 3-D.
Used Tiny Homes
Buying someone else’s used tiny home is an option that could save you money — or cost you more, if the house has been carefully flipped and staged and is well marketed. Used tiny homes on wheels may be less expensive than those on foundations, but lots of factors play in, including geographical location, materials used, and more.
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Cost-Saving Tips for Tiny House Living
Here are some best practices for minimizing tiny house cost:
DIY Construction
Once again, if you have (or can summon) the know-how to build your own tiny house from scratch, you can shave a substantial portion off the final price tag. Plus, you’ll be better prepared for inevitable maintenance projects down the line — which means the saving opportunities just keep going.
Repurposed and Recycled Materials
Using repurposed and recycled materials can lower the cost of the physical parts of your building. In some cases, recycled and repurposed materials are available for free — though you may “pay” in the time it takes to find them.
Off-Grid Living
Finally, setting your tiny house up for off-grid living saves you money on utilities and city services like trash and water. By utilizing solar panels and a composting toilet, you can make your tiny house ready for the great outdoors — and self-sustaining enough to forego the regular monthly bills.
The Takeaway
While the cost of a tiny home can vary significantly, it’s almost always substantially lower than the cost of traditional, larger American houses — which can give those who live tiny big gains in terms of financial freedom.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
What is the cheapest way to build a tiny house?
If you have the know-how, building your own tiny house from scratch with recycled and repurposed materials can save you thousands of dollars. Many knowledgeable tiny home owners have completed the project for under $10,000.
How much does it cost to hire a tiny house builder?
While labor costs vary substantially depending on where you live (and other factors), the cost of materials for most tiny homes is already around $50,000, and labor usually costs about $20 per hour. Which is to say, the overall cost to hire a tiny house builder can quickly approach $100,000, particularly if you want a custom design.
Can you get a loan for a tiny house?
Tiny homes are still a relatively new phenomenon, and some mortgage lenders’ policies have not yet been updated to work for them. Given their relatively low cost, the amount you need to borrow may be under the mortgage lender’s minimum. Personal loans are another option for those who want to finance a tiny house, but beware: Unsecured personal loans usually come at higher interest rates than secured mortgages, and the interest may not be deductible on federal taxes as it would with a traditional mortgage.
Photo credit: iStock/RossHelen
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