Can a Tiny House Save You Big Money?

Tiny houses are all the rage right now. Typically what's considered a "tiny house" is a home sized 500 square feet or smaller. Fans say they will simplify your life, bring you closer to your family, and of course, save you money. Just how much could you save by moving into a tiny house?


The answer may not be much as you think.

The average tiny home costs about $25,000 to $35,000, according to However, there are a lot of hidden costs not included in that figure. Here are some other expenses you might not expect.

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1. Land

When you buy a traditional home, the cost of the land is included in the price. When you buy a tiny house, the cost of the land will be separate, and the cost of a tiny house plus land can sometimes end up being more than the price of a traditional home in that area.


2. Utilities

When you do purchase the land, it may not be connected to a source of water, sewage disposal, or electricity. You'll have to either pay extra to get connected to the grid or save up for things like solar panels.

3. Appliances

If you buy a tiny house kit, the list price of the house might not include kitchen or bathroom facilities, and sometimes you'll need special appliances to work with your plan, which can cost extra.


4. Permits

You may need special permits from the local government to build a house, and to install anything like a septic system. Sometimes you even need special permits just to be off the grid. Some areas won't let you build a tiny house at all.

5. Storage

Yes, you want to be minimalist, but there are limits to how much you can do without. You may find yourself needing to rent or purchase some extra storage space so that you don't have to run to the store every time your wardrobe needs a change for the season.


6. Construction Costs

If you're not a skilled carpenter, you may want to pay an expert to build your tiny house. According to The Tiny Life blog, labor costs to build a home can be anywhere between 40%–60% of the total costs of the house. Even if you are able to do all the work yourself, you may need to buy extra tools beyond the basics. You'll also need to calculate the expense of taking time off from your regular job.

7. Time

Perhaps the most important, and easily forgotten, hidden cost in building a tiny house is the cost of your time. Does it really pay to build everything yourself if that means you need to take time off from work? Will you need to rent an apartment while you are waiting for the house to be built? How much time will it take to research everything you need to build?

Of course, you may have already considered all these expenses, and still feel enthusiastic about building a tiny house. Although the initial investment may be pricey, you'll still save in the long run by using less electricity, saving on heating and cooling the home, and skipping the interest payment on a mortgage. If you do decide to build a tiny house, your life is sure to be an adventure. Enjoy it!