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If you love the idea of a flexible lifestyle and don’t mind living in a small home, a tiny home might be for you. The popularity of tiny homes has grown exponentially since 2020, as more and more people have embraced a minimalist lifestyle and are working from home after moving to the suburbs or even rural areas. Tiny homes also cost significantly less than traditional types of houses.Ìý

However, they are certainly not for everyone. To live in a tiny home, you have to learn to live in a very small space. For many, this requires a significant purge of belongings, furniture, and clothing. It’s also very difficult to gather with groups of people in tiny homes. Ultimately, you are the only one that can decide whether the low-cost, minimalist lifestyle is for you.

What’s considered a tiny home?

A tiny home is a fully functional home that is less than 600 square feet. Tiny homes, unlike vans or small apartments, are fully enclosed, standalone houses. They include a bedroom, a bathroom, a kitchen, and a living space. They look very similar to typical family homes, just much smaller. Most tiny homes utilize a loft-style floor plan to make the most of the small space. Some are stationary, while others can be towed from place to place on a trailer.

→ Learn how to calculate square footage

Although the maximum is 600 square feet, most tiny homes are around 400 square feet. However, you can choose a smaller or larger design depending on the amenities and number of bedrooms you need.

How much do tiny homes cost?

The average tiny house costs between $30,000 and $60,000, with the average house costing $50,000. This range is what you can expect to spend regardless of whether you buy a prefab home (that’s already built) or purchase materials to build it on your own.

Just like any other type of property, there are many options that fall outside the average price range. You can DIY a tiny home with minimal amenities for less than $10,000 or you can purchase a multi-bedroom custom home for over $100,000.Ìý

Utilities and the land for your tiny home are other costs to build that you need to consider. If you plan to purchase land or if you need to install utility hookups, make sure to factor those costs into your budget. (Find out how much an acre costs here.)

The bottom line is that tiny homes cost far less than a typical family home, even though you will end up spending more per square foot.Ìý

Related: How much does a barndominium cost?

How do you buy a tiny home?

Buying a tiny home is a relatively straightforward process, but several steps differ from the traditional home buying experience. The steps you’ll need to take include:Ìý

Determine the purpose of the tiny home

Tiny homes can serve many different purposes so before you can decide what model to buy, you need to decide what it will be used for. Will it be your full-time residence? Will you use it as an office space in your backyard? Will it be a house on wheels that you take on family vacations?

Decide what features you need

Based on the home’s intended purpose, make a list of the features you need. This includes the number of bedrooms, whether you need working utilities, and the square footage you want.

Consider where you want to live

Determine where you will put the home and if there are any restrictions that will impact your purchase. Check the zoning laws in your area and determine whether you need to obtain a building permit. Depending on the zoning laws of your state, a tiny home may be considered an RV or a house, which will impact where you can build.

Research companies that build tiny homes

Research companies that offer both prefab (prebuilt) homes and custom homes. If you find a prefab model that meets your criteria, you may be able to save money compared to a custom build.Ìý

→ Here's what to ask a home builder

Decide how to finance the house and order it

Most tiny homes do not qualify for mortgages, but you can take out a personal loan to cover the expense if needed. Decide if you will purchase it out right, seek a loan — or find another method, like selling your stock or using your 401(k) to purchase the house. Once you choose a model and determine how to pay for it, you’re ready to order!

How do you build a tiny home?

Many people opt to build their own tiny house instead of buying a prebuilt version. Building a tiny house is a great option for DIYers that want to put special touches on their home and enjoy the process of building something from scratch.Ìý

If you want to build your own, review these steps to get an idea of what the process is like.

Decide what you will use the home for

You need to know the purpose of the home before you work on any building plans. This will help you determine what features to include in your custom build. For example, if you want your tiny home to be able to go off the grid, you’ll want a plan that includes solar panels. Alternatively, if you’re planning to use the tiny house for a solo cross-country trip, you need to make sure you have ample kitchen and storage space.

Choose a building plan

Unless you have knowledge on how to draw up plan a for a house, it’s worth purchasing one from an experienced professional. You can find many types of building plans, including for tiny homes, online that will meet your needs. You also need to make sure the location you choose can accommodate your house.Ìý

Purchase materials and request a permit

Use your building plan as a guide for the materials and tools you need. Purchase and store the materials until you’re ready to begin construction. Request any necessary building permits before starting your project.

Build and install

Follow your building plan to build the frame of the home. Once the frame is built, you can build the roof and walls. Then, install windows, doors, a second floor loft, and any other custom details you like.Ìý

Customize

Once your home is built you can add all of your favorite, finishing touches. This is the part of the process that will make your tiny home feel truly custom and special. Add ceiling designs, built-in storage solutions, and trim throughout the home.Ìý

→ Learn whether it's cheaper to build or buy a house

What are the pros and cons of living in a tiny home?

If you desire a minimalist lifestyle and enjoy living in a small space, the tiny home life might be worth a try. However, if the restricted space is too much for you to handle, it might not be the right solution for your full-time residence.Ìý

Review the most commonly stated pros and cons of tiny living below:

Pros

• Easy to travel: If you choose to tow your tiny house from place to place, it’s very easy to experience new places. This mode of traveling can also be quite convenient, since you have all of your belongings (and your office space) with you.
• Low-cost living: The cost of a tiny house is much less than an average home. You will spend less to buy and furnish the house, and you’ll spend less on monthly utilities. (Learn the hidden costs of owning a home.)
• Minimalist lifestyle: Due to the size of a tiny house, you won’t be able to collect any excess items, clothes, or even food. This leads to much less waste and allows you to live a minimalist lifestyle.

Cons

• Small space: The number one disadvantage of tiny house living is an obvious one — you have significantly less space for everything. Most tiny house owners need to minimize size since they have less space for furniture, clothes, keepsakes, and other belongings.
• Limited ability to gather with others: Most tiny homes have a very small (if any) living space. This means you won’t be able to lounge on the couch with friends and family. Due to the small kitchen, it is also difficult to cook for large groups. Most tiny homes are equipped with small ovens and mini fridges, so you won’t be able to whip up large dishes.
• Proximity to the bathroom: The small square footage means you are always very close to the bathroom in your tiny house. There is typically only one full bathroom, which may have a sewage tank that you need to empty every so often. It may not be an important factor for everyone, but needing to empty a sewage tank and always being in close proximity to the toilet is a level of familiarity that not everyone is comfortable with.