Why Are Tiny Houses So Expensive?

The tiny house fad has been brewing for years, but many people are hesitant to join because of the expensive nature of these mobile dwellings. 

Why are tiny houses so expensive? Tiny houses are considered expensive for many different reasons. If you live in a rural place, you may see them as more costly than someone living in a big city. Building materials, labor, and a company’s overhead are also factors that increase the price. Do It Yourself tiny houses are generally less expensive than paying a professional because you control all costs. 

A cabin, on one hand, is a home away from home and allows you to connect with the beauty of nature. Tiny homes are meant to allow you the same freedom, but without ever leaving your physical home. Many things go into these homes, and it’s important to understand why they cost what they do before writing them off as too expensive.

The Cost of Tiny House Living

Even though you are scaling down your life into a maximum space of 500 square feet, it can still be a costly process.

In fact, the average tiny house costs $30,000 to $40,000.

When asking a question about why tiny houses are expensive, you have to consider your own definition of “expensive”. This question may be posed because tiny house living is perceived as a way to save money.

For some, the price of a tiny house is not what they anticipated when signing up for the project. The TV shows that show the creation of tiny homes advertise a lifestyle that saves you money and makes living more efficient rather than idle. 

On those shows, they always show the masterfully designed hidden cabinets, drawers, tables, and beds that allow you to maximize your space as efficiently as possible. The design element, if that’s what your looking for, can be costly when done by a professional.

It is completely possible to accomplish these same designs on your own. They’re not going to be as perfect as a trained professional, but it will be just as functional if done right! 

YouTube is a beautiful place to learn about how to do small projects at a low cost. We are in a society full of quick information. You just need to take the time to research and create the home you want!

Here is a time lapse video that shows a group building a tiny house on a trailer. This shows you beginning to end what tiny house creation may look like for you. 

You can also minimize costs by enlisting the help of willing family and friends for small projects on the weekends. A lot of the time the people we love are more than happy to offer up their services in exchange for some good company and possibly some lunch, too. 

The great thing about calling on people you know is the variety of skills you are able to employ. You may not know how to properly use an electric drill, but your good friend Bob sure does! Don’t be afraid to ask for help!

Ultimately, how much your tiny home is going to cost is entirely up to you. The same way a house’s overall building costs are affected by your decisions, tiny homes can be as cheap as you want. 

The size, type, design, and add-ons involved in your tiny home endeavor will dictate how much you spend.

The best way to know what you’re getting yourself into, in regards to price, is to see how others did it. Here’s a video illustrating the different costs that went into one woman’s tiny home. This may help give a clearer picture of what the costs might be for different elements of a tiny home. 

D.I.Y vs. Hired Construction Factors

Many people want the comforts and benefits of a tiny home without the hassle of creating it by hand. Pre-made and custom made tiny homes are popular but can rack up the price.

These costly factors in a hired construction based tiny home include labor of the workers, materials they provide, and any profit that they want to make off of you. It’s a business, and that’s what they require.

It is recommended that you build your tiny home yourself in a DIY project to keep costs down, instead of hiring a company. Now, you need to take in account your own abilities and time. You can save money doing the job yourself, but it will end up costing more during trial and error if you’re not prepared or don’t know what you’re doing. 

Tinyhousetalk.com completed a breakdown of how much it would cost to have a construction company (Rocky Mountain Tiny Houses in this example) build your tiny home and here are the estimates they found.

Electrical Bits$500
Plumbing Bits$500
Composting Toilets$1,000
Interior Material$2,000-$5,000
Finishes $500
Labor (total)per hour rates

Source: https://tinyhousetalk.com/why-do-tiny-houses-cost-so-much/

They estimated that the cheapest that this company could complete a tiny house was around $30,220. They then went on to compare that price to a man in New Zealand that completed his home on his own for about $20,000. 

A lot of the money comes out of the chosen materials, suppliers the company buys from, and the labor and overhead costs brought on by having workers.

If you are wary about your abilities to create a quality home, you can take the time to learn as much as you can or ask for help from close friends. It may be worth it for your personal circumstances to hire someone to help. Don’t write yourself off automatically, though. Make sure it’s the best option for you.

The prices can definitely differ depending on where you are building, the size of your tiny house, and the materials you decide to use. 

What is the Cheapest Tiny House?

When thinking about purchasing your own tiny house, you will most likely be wondering how to keep your costs down but still maintaining the quality you want.

The title for “cheapest tiny house” generally goes to any tiny home that costs less than about $30,000. 

A lot of the time, that base price you see on websites is only for the shell of your tiny house. As we see on many of the tiny home television shows that are sweeping the nation, a lot more goes into your tiny house than just the basic structure and square footage. 

Tiny house building and living is not a quick process. Just like building a large home on a foundation, tiny homes take a lot of preparation, planning, and commitment. 

You’ll want to plan out every element of your house before beginning your project to insure that everything you want will fit. You can also do research about the different types of things that replace everyday parts of a real home.

For example, a mobile tiny home is not going to have indoor plumbing as we know it. You can employ the use of a reliable composting toilet! It’s important to do your research so you’re not only prepared for the price of new things but the lifestyle change that follows this move. 

There isn’t one single type of tiny house that can be deemed the cheapest at all times. It does seem to be a common theme that building it yourself, rather than hiring someone to build, it is the cheaper option. However, it may be cheaper still to just purchase an already made tiny home if you choose the right location. 


The cost of your tiny home can fluctuate depending on where you are located. 

Location seems to be a huge issue when thinking about buying a pre-made tiny home, though. The housing costs in popular areas such as large cities have a well known higher living cost than more rural areas.

The costs of tiny homes in high-cost areas increase proportionally to regular home prices in those areas. 

In 2016, Bethesda, Maryland had a tiny home on sale for approximately $459,000 which is crazy for many of us to think about! However, apartmenttherapy.com compared it to the median price of houses for that area and found that they were close to $995,000 regularly. This is what I’m talking about.

Location is everything when buying a pre-made tiny home. 

It’s also important to factor in the location of your tiny home because of the many laws surrounding building codes and homes. In a lot of cities and states, there is a minimum square footage that must be met in your home to have it counted as a primary residence. 

Many states have mandated that your tiny house must be built on a solid foundation on the land of a primary residence before it can be lived in.

Some tiny house dwellers choose to register their home as an RV or mobile home so that they don’t have to worry about building or zoning ordinances and codes. 

The downside to making your home an RV is the requirement to keep moving. You can park anywhere that they allow RV’s, but it isn’t considered a permanent fix for a lot of people. Depending on what you’re looking for in your tiny home (simple, fixed efficient living or travel), you will find different options more appealing for you and your family. 

Time, Cost, Quality Triangle

There is a triangle out there that portrays 3 options on each corner: time, low cost, and good quality. The point of this triangle is to illustrate the feasibility of your housing options. You can only choose two corners of the triangle at a time

You can have a high quality home at a lower cost by taking a long time to build it yourself. Or you could have a low cost home in a short amount of time by sacrificing the quality you want. The last option is having a high quality home quickly which will cost you a lot of money.

We don’t want it to be the case, but this triangle dictates our tiny home building lives. You need to know that having two of these extremes will likely cost you something you don’t want to sacrifice. 

It’s important to be aware of what you are getting yourself into when deciding your priorities on your project. If you want an inexpensive tiny house then you have to be willing to take the time to make it happen. Your other option for achieving a low cost home is to sacrifice quality.

It is vital to know what is most important for you and your tiny house: time, quality, or cost

If you plan your project far enough ahead, the easiest thing to sacrifice will be your time. Having a good quality house at a low cost will give you the freedom to live the life you want. You aren’t building a highly invested-in condo in Los Angelas — time isn’t money in these situations. 

The triangle I’ve been talking about is restricting but can tell you a lot about what you value. Almost nobody wants a bad quality home for their family, so you’re either giving up low costs or your time. Depending on your situation, one sacrifice might not be as dire as another. 

I’ll say it again: plan, plan, plan! 

If you’re interested in learning more about the Project Management Triangle and it’s constraints, check out this article on LinkedIn.

The Extra Bits

Tiny homes are notorious for their space saving capabilities. People want the storage and benefit of a large home in a tiny package. 

This desire is accomplished by having a lot of custom storage units that have a dual purpose as stairs, tables, beds, and anything else designers can think of. These space-saving compartments amp up the price a bit. 

There are also other amenities that people want to add to their tiny homes that make it more expensive because of the creativity that has to be involved.

Prices are raised by the homeowners that want all the functionality of a big home to fit into their new tiny space.

It’s not always possible to get everything you want to fit into your tiny home without great cost to you. A lot of people who gravitate towards the tiny house lifestyle wish to live a minimalist lifestyle. Minimalism is all about living a happy life with less stuff. 

A Minimalist Mindset for Tiny House Living

The minimalist living philosophy goes hand in hand with tiny house living. There is simply just not enough room for everything you own!

The transition into a tiny house from a full-scale home is going to require a sort of purge of your “stuff”.  No matter how hard you try, everything you own will not fit into your tiny house!

We like to fill space naturally as human beings, so we always own way more than we ever think we do. The fact that we need to only keep the essentials to live in our tiny home is a great metaphor for the construction and design. 

You want to have as many things as you deem necessary or important to you. You will want to have an ample supply of storage space, but once those are full you can’t keep bringing in more. 

When thinking about your design and construction in the early stages of building a tiny home, remember that you can’t have it all. Pick a few design elements that you absolutely can’t live without and let go of the ones you only kind of want. This will help simplify your process and keep your costs down a bit. 

You will better be able to manage your money and stay within budget (fingers crossed) if you’re willing to compromise with your new space. Building a tiny house is a major commitment and, for your own sanity, you need to be prepared for what that kind of living entails. 

Without sounding too much like Scar from The Lion King, the reoccurring theme of this article is “be prepared”! Trust me, it will save you a lot of grief.

All of this is just going to show that you can lower the price of your constructed home by simplifying the design as much as possible. Minimalism is key for a successful, and relatively inexpensive, tiny house lifestyle.

Related Questions

Why have a tiny house? Tiny houses are popular because of their versatility. They were created to be more efficient and environmentally friendly. People didn’t need a lot of living space and found that a small house met their needs perfectly. Tiny homes are also very good for travelling. You can easily pick one up and move it to a new location on the back of a trailer. 

How long does it take to build a tiny house? The amount of time it takes to build a tiny house depends on if you are doing it yourself or paying a professional to construct it. A professional can complete the job in approximately a month or two; whereas, it would probably take a DIY-er 3 months of full-time work to complete the tiny house. 

What counts as a tiny house? A tiny house is generally a max of 400 square feet total. They can end up being as small as 80-90 square feet depending on the type. Another distinction is the “small” houses. These homes reach a max of 1,000 square feet and a minimum of 400 square feet where the official tiny house title begins. 

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