Is It Cheaper To Build Or Buy A Tiny House? We Do The Math

Is It Cheaper To Build Or Buy A Tiny House? We Do The Math

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Owning a tiny home is regarded as a crucial step to achieve financial freedom. However, have you ever asked yourself which is the cheaper option– to build or buy a tiny house? And by how much?

Generally, it’s more affordable to build a tiny house than to buy one if both units are the same. You can save not only on labor but also on the overhead that most tiny home builders put on their products. However, in some instances, buying a tiny house is much more practical than building your small dwelling.

To give our readers a better perspective on these two choices, we decided to look deeply into the numbers. In short, we did the math and put things into perspective on which option is better for you. 

The Cost of Building a Tiny House 

Most small home construction projects require a few things like building materials, construction tools, and preferably additional manpower. If you are building a tiny house on wheels (THOWs), then you will also need a trailer or hauler. 

Your typical Do-It-Yourself (DIY) tiny house that doesn’t have any appliances or fixtures can cost between $5,000 and $12,000. Several factors affect the price of your small self-built home, especially your selection of construction materials. For example, if you use repurposed wood planks, you can save at least $1,000 for the project. 

Pioneering DIY tiny home builders estimate the average cost of a fully-functional tiny home at $220 per square foot. This type of tiny house is equipped with some of the necessities, such as its toilet. Using this figure, a 250 square feet tiny home will cost around $55,000.  

In comparison, the costs of building your traditional housing options cost at just $150 per square feet. However, regular homes in the US have, on average, 2,000 square feet, which translates to a build cost of $300,000.

Breakdown of Tiny House Materials Prices

Eighty percent of the cost of your tiny house project will go to building the structure. The remaining twenty percent is usually spent on amenities like fixtures, water heaters, air conditioning, and necessary appliances. 

To get a better understanding of how much building your small home costs, let’s look into some of the expenses of this project. 

Lumber- $1,500 to $4,500

Most tiny houses, whether they are built over a foundation or are placed in a trailer, are mainly made with wood. This material is lightweight, has good strength, can last for a long time, and can be reshaped for different purposes. You can buy them at your local home depot and other lumber marketplaces. 

Metal Roofing- $500 to $2,500

Aside from metal, there are other roofing options such as vinyl, concrete tile, clay tile, wood shake, and asphalt. However, metal is the preferred roofing material because it’s lightweight, nature-resistant, and quite durable. These metal sheets can also be cut to conform with the shape and contours of your roof. 

Windows- $500 to $3,000

When building a tiny home, you need large windows to improve air circulation indoors. There are numerous types of windows to choose from, like awning, casement, hopper, jalousie, sliding, and skylight. Make sure the window you want is also quite durable to provide an extra layer of security. 

Doors- $150 to $500

Most tiny houses usually have one or two main entrance doors and a few other doors for different rooms such as the bathroom. You also have a wide selection of doors available in the market like sliding, swing, glazed, paneled, and metal covered plywood doors, just to name a few. 

Sliding- $1,000 to $2,000

Sliding panels are great to have in a tiny home because they can save a lot of space. Aside from sliding doors, you can also install them on your cabinets and wardrobes. Installing them is also not that difficult and requires just a few construction tools. 

Flooring- $300 to $1,200

Most tiny homes on wheels have wooden floors since they need to be light while still being strong enough to carry your weight. However, if you plan to live in a tiny house settled over a foundation, you can instead use concrete or tiled flooring. 

Insulation- $600 to $3,600

If you live in the northern part of America or any areas with a cold climate, you definitely will need to insulate your walls and floor. There are numerous materials for covering your tiny homes, such as fiberglass, cellulose, cell spray foam, sheep wool, and hemp. Make sure your choice of insulation has enough R-value to maintain a comfortable temperature inside your dwelling. 

Electrical- $750 to $3,000

The great thing about living in a tiny home is you won’t need a complex system of electrical wires and outlets. You may also need to invest in an exceptional main electrical panel to ensure your home is safe from any untoward incidents. 

Toilet- $100 to $700

If you intend to construct a tiny home over a permanent foundation, then it’s ideal to have a toilet connected to a septic tank. However, if you plan to build a THOW, then you can go for a self-composting toilet because they don’t require too much water. Another option you can look into is an incinerator toilet, which burns the waste into a sterile ash.  

Adhesives/ Fasteners- $1,200 to $1,500

There are many ways to keep the sections of your tiny house together. However, fasteners and adhesives are the preferred joining method because they are relatively affordable and easy to use. 

Paint- $50 to $250

This item is the cheapest material that you will need for your tiny house. However, you need to pick a color palette that will make your dwelling look more spacious and comforting. Some of the interior colors you can try include: dark blue, green, off-white, and other neutral colors. 

By adding things up, you are looking at a cost range between $6,650 for the low-end build and $20,000 on the high-end unit. 

The final price of your tiny home construction project can also vary depending on its size and the brand or type of materials you used. For example, stock size white vinyl windows cost $120 each, while its custom-sized counterpart is tagged at $250.

Additional Cost of Constructing a Tiny Home

home appliances your tiny house needs

Interior finishes- $500 to $3,500

If you want to make your tiny house look more polished, you need to install interior finishes. This decoration can be anything from tiles, varnish, divisions, and decorations. Aside from improving your interior’s aesthetics, some items, like cabinets and countertops, also add functionality.  

HVAC- $500 to $1,500

Heating, Ventilation, and Air Conditioning (HVAC) are crucial if you want to keep the temperature in your house just right. There are many options for this system, such as portable heaters, ducts, mini-splits, and mini-furnaces. However, some tiny homes that are situated in more moderate climates may only need a fan during the summer months. 

Appliances- $500 to $4,500

It’s entirely up to you which appliances you will need for your portable home. However, we recommend you to get a refrigerator that can store enough food for at least two weeks. Additionally, get a reliable washer and dryer combo which can save a lot of space, instead of buying them separately. 

Fixtures- $1,200 to $6,000

Fixtures are fantastic to have if you want to save more space into your tiny house. You can buy them online and in furniture and home accessory shops like IKEA. Furthermore, you can also hire an artisan for custom fixtures or better yet do them on your own. 

Water heater- $450 to $950

If you like to take hot showers, then you need a water heater in your tiny house. If you want more portability, you can choose tankless water heaters. You can also select between electric and gas models, depending on how your unit’s setup.  

Tiny House on a Permanent Foundation or Wheels

Another thing you may need to consider is where to place your tiny house. There are two popular options here which is to build it on wheels (or a trailer) or over a permanent foundation. In some states, like Maine, they also build tiny houses on barges or small boats and register them as Accessory Dwelling Units (ADU). 

Cost of a Permanent Foundation

Some states allow tiny houses to be built on a private property provided that they sit over a fixed foundation. If you plan to build your tiny house on a foundation, you have five options. They are:

  • Stem wall and footing construction
  • Drilled shaft concrete piers with grade beams
  • Slab on grade combined with turned-down edge
  • Basement foundations built with cinder blocks
  • Permanent wood foundations

Foundation costs depend mostly on which materials you are going to use. For example, the slab costs $7 per square foot, while the crawl space is at $13. Assuming that you have a 250-square foot tiny house, that’s $1,750 and $3,250 for the slab and the crawl space, respectively. 

Cost of a Trailer

In states that don’t allow tiny houses on private land, you have the option of putting it on a trailer. By doing so, you need to register your small home as a recreational vehicle (RV) for it to be road legal. Your state’s Department of Motor Vehicle (DMV) is the one who issues these permits or certificates. 

Trailers can take up as much as 20-percent of the budget for your tiny house project. The great news is that there are plenty of trailers that can accommodate a wide range of budgets. Below are your three options when buying a trailer:

  • Used Trailer ($800 to $2,500)
  • Brand New Trailer ($5000 to $10,000)
  • Customized Trailer ($8,000 to $15,000)

When choosing a trailer for your tiny house, make sure that its load rating is enough to carry the weight of your home. 

Pros and Cons of Building a Tiny House

Building a tiny house is quite popular during the early days of the small house movement because there are only a few companies that make them. Today, there are dozens of tiny home builders in the United States that offer a wide range of ready-to-move units. 

Despite having the option of purchasing a tiny house, a lot of people still choose to build their small dwellings because of practical reasons. Below are the advantages and disadvantages of constructing a tiny home. 

Pros

  • Allows you to customize your dwelling’s design based on your personal preferences and needs 
  • Lets you experience building your own tiny house from the ground up which enables you to treasure your abode a bit more
  • Gives you more control with your budget and saves you a lot of money, mainly if you use repurposed materials
  • A tiny house project can bring your community or family together. You can also ask your friends for help and compensate them later with free meals and beers. 

Building a tiny house can be an outlet to showcase your creativity and craft. It can be quite a stress-reliever and a real escape to your lazy days. 

Cons

  • It consumes a decent amount of time for everyone involved in the project. Depending on the size of the tiny house, it usually needs roughly 200 to 400 hours to build. 
  • The build quality of the tiny house is not comparable to those done by professionals. As such, it’s prone to more issues in the future. 
  • You may need to learn some workshop skills and do a bit of research. If you have no background in carpentry, building one may have a steep learning curve. 

The Cheapest Tiny Home You Can Build

One of the recurring questions that people who have just heard about tiny houses is how cheap they can build their units. Several factors affect the price of one small home; the realistic amount is somewhere around $2,000 to $5,000. 

There are plenty of ways you can bring down the cost of your build. For example, you can find free blueprints and floor plans online for your tiny home project. This quickly eliminates a few thousand dollars; you might have to pay an architect or structural engineer. 

best-tiny-home-kits

In terms of sourcing for inexpensive materials, you can use recycled or repurposed materials. You can usually find them lying outside construction sites or junkyards. Just make sure to choose items that are in excellent condition and get the permission of the person in charge before you take them. 

Happen Films also did a documentary about affordable micro-housing options. They interviewed a couple named Liam and Rachel, who were able to build their own tiny house for only $420. Their 70-foot dwelling is made mostly from repurposed materials and other cheap materials.

Alternative Option: Tiny Home Kits

If you still want to build your tiny house, but don’t want to get into the gritty work of cutting wood and sanding them– then buy a tiny home kit. You can buy them online and from your favorite little house stores.

Once you have made your order, the seller will then send you a package containing all of the pieces of the tiny house. From there, you have to figure out which parts belong together and put them together like a jigsaw puzzle. Don’t worry, though, as there are handy instructional materials included in the package. 

Aside from the usual floors, walls, roof, windows, and doors, some star energy tiny home kit manufacturers also throw in other stuff like a wooden deck. Overall, if you want to experience building your tiny house but don’t have time to source the materials, then buying a small home kit is a great idea. 

You can also choose from a great selection of kit that varies in sizes, designs, and functionality. The average price for a tiny house kit is between $8,000 to $18,000. During the build, you may also need to buy additional fasteners, nails, screws, and adhesives to ensure it’s held together correctly.    

The Cost of Buying a Tiny Home

On the other hand, purchasing a tiny house requires only one thing– money… and lots of it. The significant part about purchasing a small house is that you are presented with more choices, especially if you have a reasonable budget.

We scoured the inventory of more than 20 tiny home builders and found out that the average tiny house cost between $30,000 to $60,000. There are, of course, much cheaper and more expensive options that are also on the market. 

tiny house for sale

Tumbleweed Tiny House, one of the pioneering tiny house builders in the US, sells its units at an average of $300 per square feet. As such, if you buy a 250-square feet little house, it will have a price tag of $75,000.

Below are some of the best examples of tiny houses in the market:

1. Railroad Box Car Special ($10,000)

This 400 square foot dwelling is smacked right in the desert of Phoenix, Arizona. The seller has converted a railroad boxcar into a tiny home with an oaken floor and French doors. The house is currently bare but can easily be added with an array of features.

You can also upgrade it into an off-grid residence by installing a self-contained propane system and solar panels. It’s also made from rugged materials that can withstand all kinds of weather. This property currently has one bedroom, but it has plenty of space for another one. 

2. Tough Dome ($12,500)

The dome is one of the most structurally sound shapes in nature. This 315 square foot tiny can easily be assembled and disassembled, much like a tent. The builder is currently located in Beaverton, Oregon, and sells other types of tiny portable homes. 

While it’s the perfect off-grid tiny house that you can stay in for temporary residence, it does have a few challenges. For example, it doesn’t have any built-in bedroom and bathroom. 

3. Escape Traveller’s Vintage Tiny House ($64,300)

This 313 square foot THOW already has a custom-built trailer and is ready for occupancy. For its exterior, it has cedar lap trim and siding matched with protective panels and steel accents. Meanwhile, its interior is made with pine T&G trim coupled with a laminate floor of either hardwood or oak. 

The Vintage also has a first-floor bedroom with a queen size bed and under-bed storage. Additionally, it also has its own bathroom with a 60-inch tub and its plumbing system. Escape Traveller also equipped it with utility hookups for water, electricity, and septic connection. 

The Cheapest Tiny House You Can Buy   

We scoured hundreds of listings on some of the popular tiny home builders in search of the cheapest small houses on the market. Based on our research, the most inexpensive tiny houses out there measure between 70 and 90 square feet. 

Depending on its features and the materials used, it can go from $2,000 to $5,000. These houses are also unfurnished or partly finished. Furthermore, they are missing one or several main components, such as a trailer, a bed, or a wood block foundation. 

Before buying any tiny house, make sure that the builder or company has the necessary certificates and permits. Moreover, you should also do your due diligence, such as researching their building practice and getting feedback from past customers. 

Pros and Cons of Buying a Tiny Home

If you don’t have time or knowledge to build your tiny house, then buying one is not a bad option either. The majority of the states in the country have at least one small home builder company in their area. 

buying a tiny house cost

Additionally, some independent contractors are also constructing tiny homes and sell them on online listings. Below are the advantages and disadvantages of purchasing a micro-housing unit. 

Pros

  • You wouldn’t need to bother about the whole process of designing and building your tiny house. Most units sold by tiny home builders are ready for occupancy. 
  • The structural integrity of professionally built tiny houses from building companies is better compared to its Do-It-Yourself counterpart.
  • Looking around for a tiny house that fits your needs and preferences consumes less time than building your unit.

Some builders also offer other services such as getting registration for your THOW and even financing. They can also install other features like HVAC for your convenience.  

Cons

  • Buying a tiny home is generally much more expensive simply because the builder also needs to make a profit. 
  • Not every state in the US has a tiny home builder in the area. Hence, you may also need to travel for hours to check the products of the small house company that is nearest to your place. 
  • Some tiny house models also offer limited customization. As such, you have to make do with the specs and features you have on hand. 

If you ever find yourself in the market for a tiny house, here is a Comprehensive List on Where to Find a Tiny Home Builder.

Conclusion

Based on the prices and figures we gathered, we can conclude that it is much cheaper to build a tiny house than it is to buy one. By crunching the numbers, we also have found that constructing a tiny house is thrice more affordable than purchasing a customized unit. 

However, building a tiny house is not for everyone because it requires both skill and time.

 Furthermore, If you also factor the average work hours for the build, which is around 200 hours or more, and multiply it with the average hourly income of $25 an hour– the results are staggering! Doing the math, that’s about $5,000 worth of labor spent on building your home. 

But even if you factor in the said amount, building your own tiny home is much more cost-effective. And the best part of it is you can tell friends and relatives about a story of how you put together a shelter over your head. 

Related Questions

Do you need a permit to build a tiny house?

Well, it depends on your local building code and jurisdiction. Most places in the U.S. have the minimum square footage for a structure before they require a permit. But because tiny houses are smaller than traditional homes, most localities and cities don’t require them. 

Where are the best places to construct a tiny home?

The tiny house movement is a relatively new housing concept. Hence there are only a few states that have regulated it. The states of Arkansas, Georgia, Texas, Colorado, California, Florida, and Oregon are some of the best places to live in a tiny home. These states regulate tiny house building and have fewer restrictions in their zoning laws and local building codes. 

Related Article: The 7 Best States for Living in a Tiny House

What companies sell tiny houses in the US?

There are close to a hundred tiny house builders in the country today. Some of the notable ones include Sanctuary Tiny Homes in Florida, Tiny Diamond Homes in Colorado, and Nomad Tiny Homes in Texas. These companies sell both- tiny houses on wheels and those that can be placed in a permanent foundation. 

All About Tiny Houses is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

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