Thinking of following the minimalist mobility and replacing your full-grown home with a tiny house? If you’re already looking for ways to lower your mortgage and electricity bills, the fact remains that you still have to be well-informed about the costs involved when buying a mini-home, including the terms and conditions surrounding financing one. But exactly how much does a tiny house cost?

The Cost of a Tiny Home

Tiny House Cost-Determining Factors

1- The type of tiny house

Apart from the cost of purchasing the materials of the house and its installation, related costs must be taken into consideration. These costs directly depend on the type of tiny house you choose to purchase. For example, if you choose to purchase a fixed tiny home and therefore are permanently anchored to your lot, you'll need to do some research regarding the price of the land.

In contrast, if you settle in an ecovillage, the price paid for the land could include access to the common septic tank as well as access to certain areas of relation and recreation. If you opt for a portable tiny home model, you'll have the option to rent land in place of purchasing it. Although you may save money upfront, note that you will have to pay for the transport of the house including doing business with a specialized company.

What about the mini-mobile home? As the tiny mobile home is much smaller than the models mentioned above, it's possible to move, without resorting to the service of a specialized company. Nevertheless, purchasing or renting a truck may be inevitable, especially if you plan to move around several times a year.

Obviously, purchasing a truck will be accompanied by costs related to maintenance and repairs. In addition, it should be equipped with a trailer adapted to the dimensions of the house to ensure safe transport. Clearly, there's plenty to think about when choosing the type of tiny house.

2- Access to essential services

It’s crucial to remember the essentials, and this includes the installation of plumbing, electricity as well as propane lines. These jobs must always be performed by a professional. As a result, the installation of these various essentials will definitely raise the cost of building your own mini-home.

And what about the septic tank? As we briefly pointed out in the section above, it's also necessary to provide costs related to its construction or access, depending on whether your tiny house is built outside or inside an ecovillage.

3- Tiny living adapted appliances and furniture

Apart from the associated fees for the tiny home selected, note that additional costs must be estimated before you move forward with this purchase. First, let's consider those costs relating to the construction of custom-made furniture, as this is sometimes an unavoidable reality for dwellings with a very small surface area.

Also, let’s not forget that the purchase of appliances with specifically-sized dimensions can be more expensive than the purchase of standard models. Moreover, if the choice of small appliances is obvious, the same goes for the purchase of custom furniture to maximize the space available inside your tiny home.

4- Paving and landscaping

Although we don’t automatically think about these aspects when initially thinking about the construction of a tiny house, you must know that they can still raise the price of the bill considerably. Moreover, it should be remembered that fixed houses can hardly do without paving or landscaping; if not both, at least one or the other.

Be aware that some companies specializing in the construction of tiny homes offer turnkey packages including these fees in the purchase price. If you need more information on the costs involved with paving your driveway and the landscaping of your new tiny home, do not hesitate to ask for quotes upfront.

5- Location of your tiny home

It should be emphasized that the location of your tiny home has a substantial impact on the cost, in the same regard as it would a traditional home. Certain metropolitan areas are indeed expensive, which is why it’s essential to take into account the cost of the land when putting together your budget.

6- Materials and square footage

If you want high-end materials to be integrated into the construction of your home, it’s possible that the building cost will exceed the amount previously mentioned. In the same regard, let’s also say that you want to enjoy a better insulation level. The materials used for this purpose must be of superior quality. Finally, we should state that you will obviously have that a house with a larger surface area will be more expensive, naturally.

The Cost of a Tiny House

On average, a tiny home costs between $60,000 and $150,000 which includes construction as well as the labour required during construction.

For tiny homes on wheels, you might pay as little as $35,000, especially if you take on the construction process yourself. If you choose to hire professionals to take on the job, the costs will be between $60,000 and $75,000.

How to Finance the Purchase of a Tiny Home

Although the tiny house is still home in the true sense of the term, gathering funding for this purchase can present several challenges compared to traditional homes. This is because the cost of buying a tiny home is lower than that of a conventional home, and thus banks can be reluctant to provide a mortgage for them. This is even more relevant for wheeled tiny homes whose dimensions are particularly modest.

The ideal scenario would allow you to pay the full sum thanks to personal savings. Since this won’t be possible for everyone, it’s important to consider using a line of credit to finance the purchase. As you likely know, the interest rate of a line of credit is higher than that of a mortgage. However, be aware that by negotiating with your financial institution, it’s possible to reduce the interest rate on your line of credit to around 3% to 6%, as long as your credit report is good.

For those for whom a line of credit is not an option, it’s always possible to apply for a personal loan. However, do bear in mind that the interest rate for this type of loan will be higher (between 7% and 12%) and presents another constraint: that of offering less flexibility in the establishment of repayment terms.

Also check out our article Expectation vs. Reality: Living in a Tiny House to learn more on the subject.

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