What is The Average Cost of a Tiny Home?

By Eric Barrett

The real estate market in the US is booming. Houses are selling for much more than the listing price, as offers flood in. It is a good time to be selling a house right now, but the same cannot be said of buying a house.

Tiny houses tend to react a bit different from the overall market. Massive price increases in regular houses don’t often translate to equivalent increases in tiny homes. This is mostly because tiny homes like trailers, which are the most common type, are not linked to the land on which they sit.

Home and property values go up because the land they are built on appreciates, not because the physical houses themselves appreciate.

So, with a relatively stable market, how much will a tiny home set you back?

What’s the price of a tiny home?

In summary: The average cost of a tiny house in the US is about $50,000.

But that’s a rather simplistic way of looking at things.

Different tiny homes start at different price points. We have seen small sheds that cost less than $10,000. They are to the most part livable, but come with only the bare minimums.

On the other end of the spectrum, we have seen luxurious tiny homes that can cost upwards of $200,000.

The reality is that a tiny home can cost what you want it to. Most people however end up spending between $30,000 and $60,000 for either a trailer home or a stationary/permanent home.

When it comes to an RV, prices can add up depending on your customizations. Brand new motorhomes will likely set you back over $100,000. Many in the market have prices over $200,000.

You can still have your tiny home on wheels for much less, by opting for a trailer. You should expect to spend something like $30,000, excluding the price of the truck.

Is it cheaper to buy or build a tiny house?

what is the average cost of a tiny home
Photo by Tinyhousebasics

This question will not have a single answer for everyone. It depends on what you are looking for in a tiny house, how much you value your time and your experience.

When you buy a tiny home, you know what to expect, and the process can be instant. For this convenience, it is true that you end up paying for the labor, and the builder’s profit margin.

If you want to keep this ‘profit’ in your pocket, you can opt to do things yourself. If this is your first build of this kind, you will have it very rough. Luckily, there are many tutorials on the internet that can guide you through.

Excluding the value of your time, you can end up building a tiny home that would otherwise cost $50,000 to buy, for just over $30,000. However, everyone one will experience different levels of savings, depending on their workmanship and price of material used.

Even if you are doing it alone, along the way you may still need some expert help. Watching a video on YouTube cannot substitute years of hands-on experience.

Ultimately, whether it is cheaper to buy or build a tiny house will be determined by actual upfront financial savings, plus expenses after continued use. For example, an expert floor or roof installation is expected to last longer, and probably be cheaper in the long run, than an amateur one.

How much money do you save by living in a tiny house?

Another way to look at the cost of a tiny house is by looking at the cost of actually living in a tiny house. In a previous article, we have talked about the long-term savings of living in a tiny home, and established that they are many.

So, the philosophical question is; should these savings be included in the purchase price of a tiny home?

Electric car maker Tesla loves mentioning how much their cars save in fuel prices over time. Even after factoring in energy costs, some Tesla owners claim they are saving over $2000 in fuel costs per year.

If we applied this to tiny homes, should we deduct the savings on: energy bills, water bills, insurance, groceries, property tax, mortgage etc. from the upfront purchase price?

Some clever people have already done the math, and found out that indeed, 55% of people who live in tiny homes have more money saved in their bank accounts than regular Americans.

Living in a tiny home will almost always cost you less and save you more. How much more is the question.

A rough number thrown around is $2000 – $5000 annually.

So, if you live in the tiny house for, say 5 years, should you deduct those potential savings from the purchase price? Well, some people will do and thus calculate the true cost of a tiny home that way.

In this case, the true cost of a tiny home that cost $50,000 but saved you $20,000 is $30,000.

You may even turn a profit on your tiny house if you built it frugally.

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