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Cost of Building Tiny Houses and Why I Don’t Have a Problem With It

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Every product we buy whether it is manufactured in China or made here in the US has a price based on the skill and energy put into creating it. That price can be expensive or inexpensive based on the market for that item. Tiny houses are no exception. The blogosphere often asks why and assumes that tiny houses are too expensive, but are they really?

The only experience I have is my own, so I wanted to share a bit of it with you. Realize, however, I am not the numbers person in my partnership. I have these rough figures but specifics I am not so good at. In any case I do not believe that our tiny house was too expensive to build. It might cost more per square foot than a traditionally sized house, but that was a tradeoff we were willing to make.

The cost of our tiny house, not including the solar power set up, was just around $20,000. This figure includes the plans from the Tumbleweed Tiny House Company as well as the tools we used to build the house. This also includes all of our mistakes. Since it was our first time building anything we had a couple. If we started again we believe we could build the same or similar house for closer to $10,000.

Photo by Laura M. LaVoie

Is this affordable? Yes, I believe it is. Finish reading below to see why I think so.

Our country had a problem with mortgages not that long ago. I should have known a recession was coming back in 2007.

I was working at a staffing company and one of our biggest clients was a sub-prime mortgage lender. At the time I didn’t put much thought into what that meant.

We had worked with them since our company was founded in 1999 and placed a lot of people there in really well-paying jobs. Young professionals just out of college were starting at nearly $50,000 a year and they really possessed no specialized skills, if I’m being honest.

The company spent a lot of money to move into a beautiful new office which they renovated. Then, one day only a couple of months later, it just didn’t exist anymore.

The temporary employees who had been there the day before showed up to a locked door and a dark building. They called us wanting to know what was going on and we didn’t have any idea.

The people we had placed over the years who had been hired started to call as well. No one knew what happened. We helped many of them find new jobs and just went about our business not realizing the kind of impact this actually had on the economy.

Shortly after that difficulties started for other companies related to the financial industry. The bottom fell out and there was a time I wasn’t sure if our company was going to stay in business either.

photo credit: wellurban via photopin cc

The problem was not that houses were too expensive. The problem was that mortgage companies were qualifying people who did not make enough money to afford payments on those houses.

Suddenly it was important for everyone to have a big suburban home even if they needed to scrape together the money for food and clothing between mortgage payments.

Enter the tiny house movement. It started small. It is still small for that matter. But when someone looks at the $30,000 or more price tag on a completed tiny house they panic.

Why is it so expensive? Well, it is a lot less expensive than that half-million dollar suburban home and you actually have a house in the end and not 30 or more years of debt.

Also, it takes money to build these houses and, just like any business that has ever existed the companies are interested in making some money as profit for their work.

When you look at the cost/benefit analysis of tiny living you’ll begin to see that the price tag for quality built tiny houses is not so bad. And I would caution against cutting corners for a home that is intended to be built on a trailer.

Let me know what you think about the cost of tiny houses.

This post contains affiliate links.

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Laura LaVoie

Contributor and Tiny House Owner at 120SquareFeet.com
Laura M. LaVoie is a professional writer living in the mountains of North Carolina in a 120 Square Foot house with her partner and their hairless cat, Piglet. Laura graduated from Western Michigan University with a degree in Anthropology. She has been published in magazines and anthologies on the subjects of mythology and culture. She spent nearly 15 years in the temporary staffing industry before deciding to become a full time writer. Laura works closely with the Zulu Orphan Alliance volunteering her time and the skills she's learned building her own small house to build a shelter for orphans and other vulnerable children living near Durban, KwaZulu-Natal, South Africa. Laura also enjoys simple living, brewing and drinking craft beer, and popular culture.
{ 24 comments… add one }
  • Thomas Prikowitsch
    January 15, 2013, 8:37 am

    i think the problem is, people tend to compare a tiny house with a minimum-solution and expect a well built dwelling that took some design-effort to be as cheap as the shipping-container turned schelter or workers-quarters that start from 5k.

    • January 15, 2013, 1:50 pm

      Thanks for your comment. You’re right, I do believe a lot of people look at it as a minimalist movement – which it is too some degree. However, I think investing money in your own tiny house is a great way to kick start a self-sufficient lifestyle. Because of the tiny house I was able to quit my full time job and be a writer, which is all I’ve ever wanted to do. Even though we had to pay $20,000 to build the tiny house I was still able to pay off my debt and reduce my expenses and now we have a house free and clear.

  • Sharon
    January 15, 2013, 11:19 am

    Laura, when I saw the title of your article, I thought you were referring to the cost per square foot. I think new build construction today in the U.S. is around $150-200/sq ft. A $20,000 tiny house 8′ x 21′ is $119/ sq ft. Considering that kitchen and bath utilities are included, which are the most expensive features in a home, tiny houses are amazingly inexpensive. Further, many tiny homes have specialized kitchen fixtures and lots of real wood inside and out. Tiny houses are an amazing bargain even per square foot. Obviously, the $20000 price tag can be significantly reduced by using repurposed and used materials.

    • January 15, 2013, 1:48 pm

      Yes, you’re absolutely right. They are inexpensive and yet people do seem to complain about the cost of finished houses or the cost of plans to build their own.

  • Andy
    January 15, 2013, 1:24 pm

    I think that the misconceptions about tiny houses being inexpensive comes from the early articles about the tiny house movement. Phrases like;”Live without a mortgage”,’Own your home in a year”,or “Don’t like your neighbors? Hitch up your house and screw them”. (okay,that last one was mine. But you get the idea.)These statements while true don’t reflect the initial outlay of funds. If you build it yourself, a tiny house can be very inexpensive. I have heard of people building homes for as low as $4000.00. But lets face it, most people don’t have the skills,or the desire to build a house,even a tiny one. While they might not flinch at paying $50,000.00 for a top of the line Tumbleweed home, the other realities hit home. You need a spot for your tiny house. Unless you are willing to live in the country,there are few places that will allow you to park your home. Some places require a minimum of three acres for a non-standard home. Then there is septic or sewer hook up. Running electricity and so on. Even if you use solar,wind and grey water, There is going to be an up front cost for that. Your $20,00.00 house has just become more costly.Some would say that getting a mortgage would be more cost effective.
    But most of us who live or have lived the tiny life know this. $20 to $50k is inexpensive for a tiny house. I work at an RV dealership. We have travel trailers on the lot that,while luxurious, are in fact,crap. They can cost up to $100,000.00 but are only made to be used for a few weeks at a time. There are a few who live aboard,but they pay a fortune in maintaining their units. A properly designed and built tiny house is made to be lived in for life. For 20k, dirt cheap. The up front cost is more because it’s impossible to get a mortgage for one. But isn’t that the point. Pay more up front,save a boat load later.
    It reminds me of a few years back when everyone wanted to get a scooter because all of the articles written about them talked about them costing $1000.00 and getting 60, 80 ,and even 100 miles to the gallon. While that was true, the ones who saved the most were the ones who did their own maintenance. The rest were hit with the reality of $50.00 oil changes and $60.00 tires. They were asking why these tiny little scooters were so expensive.
    Please excuse my rambling.Maybe I should have just submitted my reply as an article it self.

    • January 16, 2013, 9:41 am

      Though I will say that phrases like “own your own home,” “eliminate your mortgage” are true statements. Sure, you might have to do some additional homework to figure out how to make it work for your lifestyle but isn’t that part of life. I think so many people are more comfortable being spoon-fed the idea that we have to have a conventional life and a mortgage to be successful. I think it is about time we redefined success.

  • January 15, 2013, 2:13 pm

    Laura, great article. I believe everyone who comes to look at the Tiny House movement and evaluate these houses has their own point of reference. If you come in with a minimalist view point and are under employed or just simply unemployed then $20,000 is a huge sum. If you come in and have mortgage of $1500 a month, $20,000 sounds like an awesome win albeit with some trade offs. You make that point very well. While I respect the variety of view points and income levels, I came into this community doing pretty well financially. I built my “tiny house” at a cost of $260 per sq ft. My homeowner friends thought I was nuts because their vision was around a 2000 sq ft home. When they realized I was talking about 192 sq ft it just didn’t compute. I got what I wanted, an awesome, super well insulated “mini cottage” and joyously live in it. Could I have cut my cost by 2/3’s you bet and still loved my house but, that what not my goal. The coolest thing about this community is that you get to design and build what YOU want and what you can afford, how cool is that.

    • January 16, 2013, 9:45 am

      You’re absolutely right. I think it is, and should be accepted in the Tiny House community, that individuals can build houses as cheaply or as expensively as they want. I loved the fact that we could purchase some higher end things for the build because the cost was much less than if we bought the same thing for a traditionally sized house.

  • Carolyn B
    January 15, 2013, 5:04 pm

    Good article, Laura L. Is the 2nd photo an aerial or elevated photo? With its saturated colors on each roof, I first thought it was a model, like a modern village for a toy train to run around. I like it so much.

    Also I liked the cost per squ ft discussion that the commenters have done here.

    • January 16, 2013, 9:42 am

      I’m not entirely certain. It is a creative commons photo and you can click the link below it to find out more information. I believe it might be a model.

      • Stuart
        January 22, 2013, 5:41 pm

        The photo is taken with a tilt and shift lens. That is what gives it that model village look.

  • Corey
    January 17, 2013, 12:51 pm

    My recently built tiny house is for sale for only $16,000. It has 336 sq ft total inside 192 sq ft.

    You can email me @ [email protected]

  • Andy
    January 17, 2013, 4:37 pm

    By the way, I love the black & white. I hope you don’t mind if I print a copy and put it on my wall.

  • Linda Lyons-Bailey
    January 22, 2013, 10:31 pm

    “Well, it is a lot less expensive than that half-million dollar suburban home and you actually have a house in the end and not 30 or more years of debt.”


  • Rebecca
    January 23, 2013, 10:54 am

    I think that there are two factors to consider when looking at the “tiny homes are too expensive!” reaction.

    First, a good number of the people who are interested in building these tiny homes don’t have $20k laying around to put into their home. We certainly didn’t; we’ve been building ours for a year and a half and putting money into it as we can. Thus far, we’ve spent about $5k and have the structure and the interior walls up. It should cost us about the $20k you quoted all told, including driveway, cistern, and solar power system, but that will be spread out over the next 3-4 years.

    Secondly, a lot of these homes ARE too expensive. I’ve seen a lot of tiny homes selling for $50-100k. That’s outrageous, especially for something you can’t get a mortgage on. Those tiny houses are only for people with a large amount of discretionary income.

    To put things into perspective, our landlord has offered to sell us the 1100 square foot house we are renting for $60k -and we could probably talk him down to $50k. This is for a house within walking distance of downtown. If we went out into the country, we could get a house and 3 acres for $50k if we were willing to put a little bit of work into it. The 10 acres we’re building the tiny (actually, almost 400 square feet) house on cost less than $20k.

    These prices hold true for a large section of the country, which is why many people see a $50k price tag on a tiny house and choke.

    • January 23, 2013, 11:13 am

      To your point about having $20K laying around – it took us three years total to build our house and I did include the cost of tools, etc as well. Just like your tiny house I think this does spread out the outlay of money. We didn’t chose to spend $20K up front.

      However, that $20K was just our cost for materials, tools and “mistakes” which doesn’t count for our time at all. If we paid someone to build the house we would need to pay the $20K *plus* their labor at which point I don’t think $50K total is unreasonable.

      I think mortgages are exactly the problem. Buying a tiny house should be a mortgage free option and I think the ultimate answer is that if someone can’t build one themselves and can’t afford to have one built maybe the tiny house is not an option for them. Or maybe everyone needs to rethink exactly how we handle money and our homes.

      • Rebecca
        January 23, 2013, 12:08 pm

        I understand what you mean, but my comment about money “laying around” is what most people think of when they here that someone spent $20k on a tiny house. The truth is that you do have to have money in largish amounts of course at certain times; for example, we spent $3500 on the structure for our house, which was one big outlay. Other big outlays are going to be the insulation ($1100), the driveway ($2500), cistern and water cathcment (about $1200), and so forth. We putting in each of these as we get the money; the insulation should go in within the next couple of months.

        I don’t think mortgages per se are the problem; the easy availability of them is. Most people (myself included) are never going to have $50-200k to plunk down on a house. Without mortgages, most people will never be homeowners.

        I still think $50k for a tiny home is ridiculous. When you strip out all of the extras we are adding to ours, such as the aforementioned cistern, the solar power setup, our driveway, special solar appliances, etc, the total cost to build it will be somewhere in the neighborhood of $12k. If we were mass producing them, we could probably do it for $9k or less. There are tiny house builders out there who sell their tiny houses for between $15k and $25k, so I know it can be done at a profit.

        I do agree with you about the need to rethink how we handle money and our homes.

  • January 23, 2013, 2:23 pm

    I disagree with your statement “The problem was not that houses were too expensive.” I think the housing marketing was over-inflating the values of most houses. Which is another reason for the housing crisis, people were paying way too much for houses that were not worth those amounts.

  • David
    January 24, 2013, 6:25 pm

    Look people….All these builders try to rape you with the costs. There is no reason that these houses should cost even over 10,000… If you would not allow these builders to put in 1000 to 2000 dollar fireplaces or wood through out the whole house instead of wanescoating or drywall. crap even the composting toilet is between 1000 to 2000. get real people.. I am building one without any 500 or 800 dollar plans…. ridiculousness.. With common sense and thinking things through there is alot of ways to cut costs. Even board and batt siding….cost there to…Like I said no reason the house should ever cost more than 10,000 to build should even be less than that. David

  • Amity Elspeth Bronwen
    June 7, 2015, 9:28 pm

    I’m about to be forced to sell my late parents’ barely-$146,000 suburban home that is in such bad condition it won’t get anywhere near that much, with ridiculous $30,000 back taxes. I want to buy and find some way to have built a tiny house kit but I am 51 and disabled; I don’t have the option of building it myself. Add to that I lost my job and am trying to get another one! I don’t qualify for a mortgage and wouldn’t get one if I did. I really want to do the tiny house thing if I can buy a small land parcel in an area where it doesn’t cost much and I figured I’d need to pay about $20K for labor and get some help from friends and do what I can myself (painting, interior decorating, tiles, etc). Is my plan unrealistic?

    • Michael
      November 28, 2016, 7:10 am

      Look at all options… Might not be wise to get into debt. I’d offload your parents’ home, handle the tax issue, and look into other housing options at this time that will work until your circumstances improve and stabilize.

      Been in similar circumstances and it isn’t fun, but sometimes the cards we’re dealt just stink.

  • Michael
    November 28, 2016, 7:06 am

    I priced a completed tiny home at nearly $100,000 after $24k in options/add-ons. Simply absurd, especially considering I can buy a new modular home for less than half that. Decision made.

    I think, for those willing to live in a 200 square foot space and adopt a tiny lifestyle, tiny houses can work. However they are not practical for most people/families nor are they a realistic long-term solution to housing needs for most. They’ll work in a pinch, for some, but are simply cost prohibitive if one looks at the range of housing options available.

    For example, I can build a nicely-sized “mother in law” apartment or separate office space, using a two-story shell from Lowe’s or another outlet, for under $30,000 completely finished out with a full bathroom, kitchen, and living space.

    Tiny home manufacturers need to get prices in line if they want to become a viable option for those who don’t have tons of cash on hand that they are willing to spend freely. Perhaps they can afford to be exclusive by marketing to the well-to-do, but they’ve priced themselves out of the running for this practical guy.

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