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As tiny houses grow in popularity a lot of things have begun to change. Tiny houses used to be seen as a cheap way to live or study mobile living. However, now people often think tiny houses are way overpriced.
So, why are tiny houses so expensive? Tiny houses are expensive because they are actual houses that have all functioning components like a regular house. And tiny houses take specialized skills to build, which increases the cost of labor. But there are more reasons along with ways to lower the cost, let’s review them.
My husband and I have been living and building tiny homes for years now. We have seen companies come and go and the tiny house market drastically change. Here we will discuss some of the reasons tiny houses are so expensive but also ways to have an affordable tiny house.
Why Tiny Houses are so Expensive
There are 3 main reasons tiny houses are seen as expensive:
- They use real materials and appliances, which cost
- They require specialized skills to properly assemble, which costs
- Since they are small, people want luxury, which costs
But lastly, most tiny house companies build for luxury, not price. People are now buying tiny houses as a status symbol or recreational item and much less for “affordable living”. This drives the market.
Many tiny house companies are more expensive than the average house someone would need. But they are booked out for months to years, so obviously their strategy is working.
Then there are lots of “cheap” tiny house companies, with much lower marketing budgets. And all-around budgets. These houses come out shoddy at best and dangerous at worst. Due to the lack of regulations on tiny houses, companies get away with inferior wiring, little to no insulation, framing that is not structural, and useless solar systems.
In the tiny house world: you get what you pay for. And many people are willing to pay for what they want, driving the tiny house market up.
However, there is an in-between. Companies who build quality homes for fair market prices. They are cheaper than luxury companies and built better than low-end companies.
Tiny houses still cost. They are built to last, out of real materials, and use real appliances. All of these things still cost as they would when building a regular home. Additionally, most tiny houses are on trailers, which need to be specialized to hold weight on the edges and are not cheap.
Although tiny houses may seem more expensive than some people might think, you do save a lot in daily living expenses. Check out my article on how much it costs to live tiny if you want to know more.
Not to mention the labor associated with building a tiny house. Not any framer can frame a tiny house. Not any builder can build a tiny house. There are specialized ways to fasten a house to the trailer, that is if you want it to stay. As in any industry, these skills take time to learn, and building a tiny house takes skill.
We love lining tiny and want to promote it. It is disappointing to see so much confusion and misunderstanding around tiny houses, not to mention the costs or lack of quality. So we decided to start our own business. We are the only tiny house company (currently writing this to our knowledge) that actually lives tiny.
We know what it takes. Our company is built on the idea of building affordable quality homes. Check out some of the houses we’ve built here:
The Tiny House Market
It is an unfortunate truth that the cost of tiny houses has skyrocketed. What has happened? Tiny houses originated from those wanting an affordable or adventurous lifestyle.
People used to build their own tiny houses, which added to the special bond people share with their homes. Tiny houses companies seized the opportunity of an open market and started popping up everywhere. Soon tiny houses were being thrown together as demand grew.
Many of these companies went bankrupt. With little to no regulations at the time, tiny housebuilders could throw together almost anything and pass it for a tiny house. And unfortunately, it showed. People flocked to these companies because they were “affordable”. But they also quickly fell apart. Homes were ripped from the trailer even in transport, caught fire due to improper wiring, or simply didn’t function properly.
Many people grew resentful for the stress tiny houses put on them.
On the flip side, other companies took advantage of the market differently. They saw the novelty and status a tiny house could bestow. They put time and energy into building extravagant high-quality homes. And people loved them.
Many janky tiny house companies went under. But the quality ones lasted. Becoming a luxury item, increasing in demand and price. Naturally, if you look up tiny house companies the ones with the bigger marketing budgets will be the first to show up, making all tiny houses look entirely too expensive.
I have been shocked at seeing how much people are willing to spend on a tiny house. Often, people who have lots of money are the ones who buy them. As in any free market, supply and demand determine cost. Most tiny house companies are booked out for months, if not years. Therefore, regardless of cost, they are selling.
Tiny House Costs
Tiny houses are amazing designs packed with useful features wrapped in a small area. Since tiny houses usually contain standard features as a regular house, just in a more efficient space, they still cost more than people think to build. However, since the square footage is so small, it means you can splurge on the extras.
Most people want granite countertops and tile showers, but may not be able to afford them. But in a tiny house, the cost is significantly cheaper. So people upgrade. Everything gets upgraded. From appliances to floors. Most tiny houses nowadays are quite spiffy. And why not? If you have the money to do then make this home something you will love.
However, this makes tiny houses look much more expensive than they really are. If you were to take most tiny houses built by reputable companies and build an equivalent “full-sized” home, it would also be very costly. But people don’t see comparable prices. So often tiny houses look overpriced.
People often assume that since it is a tiny house the costs of upgrades are tiny. In comparison they often are. But costs add up, as they always do. And even tiny houses become pricy.
But you are investing in a house. A properly built tiny house should be livable, with standard upkeep, for decades. RVs and travel trailers are often compared to tiny houses, but this isn’t equivalent. RVs fall apart after years of use and are much less functional than tiny houses.
Tiny houses are expensive because they are houses, and houses are expensive. You are not buying an RV for week trips. You are buying something to live full-time in.
When we built our first tiny house we had people offer to buy it for $13,000. Mind you this was years ago before inflation took off. We had over $30,000 in materials alone and it wasn’t even finished. It blew my mind that someone thought such a magnificent beauty could be built, and sold, for next to nothing.
How to Have an Affordable Tiny House
So, how can you have an affordable tiny house? What is affordable varies from person to person, understand you are buying a house you want to last and it is not cheap. You can find a tiny house company that builds affordable quality tiny homes, like Specialized Tinys, LLC. You can also build a tiny house yourself but keep in mind the following risks.
You must be careful to securely fasten your structure to the trailer, the wiring is installed properly and will not catch fire, and the plumbing is in the right location so it won’t flood the house if it leaks. I would recommend paying a professional electrician and plumber.
But if you don’t want to spend months learning and sweating over the construction. Then how can you determine whether you are getting a quality tiny house for a good price? A few simple things you can do is ask for an RVIA (or NOAH) certification, and check that the belly pan is covered (no open insulation). This is a telling sign of a quality build versus shoddy. Additionally, if you have a friend who you trust to inspect the house, bring them along and ask for pictures of the build as they go.
If you want to know more about certifying tiny houses as quality, check out this article.
It is difficult to give prices for tiny houses, as those fluctuate depending on the market and inflation. But understand that you are buying a real house, that you hopefully want to last, and that you will be saving money on many other bills. Decided what is affordable to you.
