Why It's More Expensive To Hire A Tiny House Contractor Than You Think

As you look around your current home and realize it's a lot of work to keep up, you may be tempted to build a tiny home, one that takes up less space than your kitchen and provides for everything you need. It sounds like a dream to be able to live in such a small footprint, but these homes come with numerous unexpected factors, including that they end up being more expensive to build than most realize.

It's smaller! Why would it cost more to build? Rocket Mortgage says the average cost of a tiny home is about $300 per square foot, much higher than the $150 per square foot for a traditional single-family home. They usually cost between $30,000 and $60,000 to construct, sometimes much more. Now, that total price tag may be far more affordable than what you could expect to make a traditional home in the U.S. today, but if you're downsizing this much, you may be perplexed as to why it costs so much.

A part of it is the contractor

While you may be packing your tiny place into a small area, what the builder sees is a project to build a home, not necessarily a tiny one. Contractors do not anticipate making less money on a smaller house, as that isn't an appealing reason for them to take on the project, states Reader's Digest.

Sometimes, to make up for the smaller square footage of the property, the contractor is likely to boost the amount they are charging for the project. That is, their markup on a tiny home is going to be much higher than what could be expected from a traditional house build. And sometimes, if the project isn't financially sound for the contractor, they will not take it in the first place, which makes it even harder to actually find a builder to take care of the building aspect of your tiny home.

There's a lot that goes into it

Even more so than just the price the contractor charges, there's still quite a bit that goes into building a tiny home, and you'll have to foot the bill for it. Even though it's a small space, you still need to have proper plumbing and electrical, and you'll need to meet code regulations in these areas, too. Sometimes tiny homes are more complex to build because so many aspects need to be included in a small area.

According to Forbes Advisor, things like the foundation, amenities, and square footage play a role in the cost. For example, sometimes home buyers decide to purchase higher-quality materials and finishes, or they need a specially constructed table that fits under their living room furniture to make the best use of that space. Complexity aside, there are also factors like location, purchasing land, and having home inspections to consider when determining how much you can spend on buying a home.