Tiny house in woods.

How To Build A Tiny House: Getting Started

Katie Ziraldo6 minute read
UPDATED: April 14, 2023


If you’re looking to downsize your living space and perhaps your cost of living in general, then you may be one of many who are checking out the tiny house trend.

It’s easy to see the romantic appeal: the idea of swapping thousands of residential square feet – and a bunch of stuff – for the freedom and cost-saving that tiny houses seem to offer. According to Tiny Living, 55% of people who live in tiny homes have more money saved in the bank than average Americans, with 65% of them having no credit card debt at all.

Yet while many people are becoming more interested in this building alternative, few may know where to start.

Step 1. Where To Put Your Tiny House

Most tiny houses fall within the 100 – 400-square-foot range, so you can pretty much build it anywhere and take it anywhere, right? Not so fast! How and where you construct a tiny home will affect your building options, pocketbook and lifestyle in a big way. 

Choosing A Base: Land Or Wheels

Begin by deciding if you want the house on a foundation or on a trailer.

Permanent foundations like concrete slabs give you more control of the floor plan. You aren’t limited to the dimensions of a trailer, and you can add features like a crawlspace. Of course, building on a foundation also requires the homeowner to buy land to build a house, but this higher upfront cost can be managed through applicable financing options, such as personal or land loans.

Building on a foundation may also require local permitting, so it’s important to check with the local building department. Building permits run homeowners between $452 – $2,101, on average.

The biggest advantage of building on a trailer is obviously mobility. You won’t be subject to building codes in most areas if you build on a trailer, but the unit might take on RV status and make it subject to RV regulations. And like with an RV, you’ll be limited to RV hookups for utilities.

It’s also important to note that real property and RVs do not appreciate the same way over time. In general, tiny houses are not guaranteed to appreciate in value in the same way traditional homes do, although those built on foundations have better odds. A tiny home can even depreciate in value over time, especially if it is on wheels or highly customized. These homes also fall into a niche market, so it may be more difficult to sell your home down the line.


Many states don’t have zoning specifically for tiny homes. You may want to check with your city or county to be sure you aren’t violating any zoning laws by having a tiny home on a site. For example, it’s illegal in many areas for your tiny house to be placed on a friend’s or family member’s land for free.

Some zoning laws also have minimum square footage requirements on the parcel. Other areas may have covenants limiting the length of time an RV can remain on a site. If your tiny house is built on a foundation and meets the minimum square footage requirements in your area, it may be legally considered an accessory dwelling unit or ADU.

Building Codes

While zoning regulations impact where you can build these unique houses, building codes impact how your tiny house is built. Building codes are primarily in place to protect public health and safety. Both zoning and building regulations vary between locations, so it is crucial to check the guidelines in your area before planning your project. You can typically find this information online by visiting your state’s website.

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Step 2. Make A Budget For The Cost To Build A Tiny House

Tiny houses can cost less than $12,000. If you buy a new one, most sell for $35,000 – $80,000, and if you build your own, the average price for materials hovers between $20,000 and $30,000.

In most cases, the average cost per square foot is more (and often much more) than that of a traditional home. The nationwide average cost of a tiny home is $300 per square foot compared to a traditional home’s $150 per square foot. However, that doesn’t account for the fact that traditional homes typically cost more to finance and maintain. In the end, you can own a tiny home flat-out for the cost of a down payment on buying a house. But there are many other financial factors to consider. 

The Cost Of Land

Per the USDA, the average cost of land outside of city limits (all land and buildings on farms) is $3,020 per acre. The closer you get to civilization, the higher the cost. In some cases, purchasing an investment property may be a cheaper option than buying undeveloped land, as long as it’s legal for you to place and live in an ADU on the property, because this opens the door to using more traditional forms of financing. 

Tiny House Construction Materials

Tiny homes might not be big, but the list of construction options is long. Thinking about how you want to have your tiny home constructed, you have two options: do it yourself or hire a contractor.

Building your own tiny house is undoubtably cheaper than buying one prebuilt, but there are several routes you can take if you decide to do it yourself. If starting from scratch isn’t for you, there are tiny house shells available, which provide a finished exterior with an unfinished interior, allowing you to still personalize the space for your needs. There are also kit homes that typically cost less than $10,000 and come with blueprints, a customized trailer to build on and a list of needed supplies. You can even look into building your own shipping container home!

But your desired level of customization will also affect the overall price of the project. For example, you might want to bolster your tiny home if you go mobile. A metal roof is recommended over shingles to handle wind and could cost up to three or four times more for installation. Let’s say you build on a foundation in the countryside and forego the power grid. You’d need an alternative, and solar panel arrays – a popular choice – can tack on $8,000 to your bottom line.

With the limited space, there won’t be a lot of large items to purchase. However, you may want some amenities like a patio or deck, unique decor, and storage that can increase the size of your investment. 

The Build

A unique aspect of a tiny home is that even if you’ve never built a home before, you may be able to do it yourself anyway. Plans and cost lists are plentiful on the internet, and although this is a great idea for some people, we typically do not recommend DIY’ing your home without some sort of advanced construction experience, as small mistakes could lead to high costs.

According to Tiny Home Builders, depending on whether you just want the shell or the whole house built, you’re looking at a cost range of $12,000 – $61,000.

Step 3. Finance Your Tiny Home Build

Now that you have your budget ready, it’s time to finance your build. Depending on your needs, there are several different routes you can take to obtain financing, from financing through a tiny home builder to obtaining an RV loan.

If you’re building your tiny home, construction loans may be a good option as these short-term loans function very similarly to mortgages but cover the cost of custom home building.

Step 4. Prepare For The Downsize

Since space is more limited in a tiny house, you need to think creatively about storage and features. But first, evaluate the things in your current home and the features of the home itself.

What must you bring with you and have in your new tiny home? What can you live without? Chances are, you’ll need to make some tough decisions and fashion your space around the essentials in your new life.

Creative ways to save on space in a tiny home include sleeping in a loft space above the rest of the home or in a hide-a-way bed if you use a loft for storage.

If you want to maximize space, a good rule of thumb is to furnish your tiny house with things that turn into other things, like couches that turn into shelves and window blinds that turn into racks.

You can also add a small shed to the side or back end of the unit or make use of space under a floating floor or under a bench seat.

Step 5. Time To Think Design!

Once you consider location, cost and creative ways to house everything you need, it’s easier to start imagining what your tiny home could look like. Learn more and check out some samples to get your mind going.

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Katie Ziraldo

Katie Ziraldo is a financial writer and data journalist focused on creating accurate, accessible and educational content for future generations of home buyers. Her portfolio of work also includes The Detroit Free Press and The Huffington Post.