How to Build a Small 400 Square Ft or Less Cheap Cottage

Careful planning and clever material use reduce building costs.

Building an affordable house requires hard work, careful planning and an ability to imagine new approaches to home building, space utilization and material usage. Brad Kittel of Tiny Texas Houses notes that concern for the environment adds urgency to the need for small, sustainable and inexpensive shelters. Study websites and books for information on designing and constructing a small house that suits your needs without breaking your bank account. Before you begin, consult real estate, building or banking professionals to ensure you meet current local requirements for size, quality, resale possibilities and financing needs.

Step 1

Draw detailed plans or purchase a small-house plan that maximizes volume while minimizing footprint and reducing interior walls. Base the house's shape on a rectangle or square, with measurements in multiples of four feet to reduce waste and cost by using standard-size materials. Select building site with limited clearing and leveling required.

Step 2

Install septic system, if necessary, according to applicable building codes. Clear and level building site and install foundation piers: dig holes for wood posts and set with concrete or use concrete footing pads for cinder block or steel pipe piers.

Step 3

Frame house from floor joists up, using new or recycled standard lumber. Install plumbing pipe at correct pitch. Install breaker box, wiring and junction boxes to meet applicable building code. Roof with OSB or plywood under corrugated metal sheeting or standard shingles of lowest appropriate quality. Install windows and doors. Make and install steps from ground level to entry.

Step 4

Install plumbing and lighting fixtures, outlets and switches. Install insulation if desired. Finish interior walls and ceiling. Apply exterior siding. Varnish subflooring and use as final floor or finish with end-of-roll carpet remnant or other end-of-lot flooring option. Install optional heating and/or cooling unit.


Do as much of the construction work yourself as possible. Buy windows, doors and other home construction materials at discounted prices at salvage and recycling stores such as Habitat for Humanity’s ReStore. Buy appliances at salvage or scratch-and-dent stores. Consider a prefabricated building, house kit or a shipping container as the cottage’s basic shell to reduce waste material and labor costs and simplify construction.
Cement-board exterior siding may be more expensive initially but resists fire, termites, water damage and requires little or no upkeep.

Things You'll Need

  • Paper and pencil or computer with drawing software

  • Construction permits as required by governing building codes

  • Septic system if no public sewer system available

  • Foundation materials: large wooden posts or concrete pads and steel piers or cinder blocks

  • Construction tools and supplies: saws and blades, hammers, nail gun, nails, caulk gun and caulk, plumbing wrenches, wire cutters, pliers, screwdrivers, electric drill and drill bits, other tools and supplies as necessary

  • Floor joists

  • Framing lumber

  • Plywood or OSB (Oriented Strand Board)

  • PVC plumbing pipe and adhesive

  • Electrical wire, junction boxes for light fixtures, switches and outlets, breaker box

  • Roofing material

  • Windows and door(s)

  • Insulation material

  • Faucets, drain assemblies, sink(s), toilet, tub or shower pan, light fixtures

  • Exterior siding

  • Interior wall finishing materials

  • Finish flooring


If you lack specific skills such as installing electrical wiring, consider hiring experts for that work. Errors can be costly. Install insulation and an energy-efficient HVAC system if the cottage will be used during cold or hot weather. The initial cost may be offset by savings while heating or cooling the building. Green building techniques often use cheaper basic materials, such as straw bales or rammed earth. Investigate thoroughly before choosing these materials and consider all “hidden costs”--for example, a straw bale house requires a wide poured-concrete continuous footing for its foundation. OSB costs less than plywood, but if exposed to water, OSB swells permanently. Plywood returns to normal thickness as it dries.

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