So You Want a Tiny House… Should You Buy One or Build Your Own?

by Kurt Galley, Owner

Carriage Houses NW

[8 minute read]

There are a lot of great reasons to consider living in a tiny house. Most often, people point to the benefits of a more minimalist living situation – lower costs of ownership, greater lifestyle flexibility, reduced stress and a sense of adventure all come to mind. Additionally, many tiny house enthusiasts consider an option they probably wouldn’t with a more traditional sized home: the idea of building the tiny house themselves. I think this is a function of several factors. Chief among them is the opportunity to save money versus paying a professional builder. Other factors may include a desire to accomplish something significant like building a home and maintaining the exact vision one has for their space and not leaving that in someone else’s hands. Whatever the reason, there are pros and cons associated with both options and we’ll explore a few of them here. Others have written in more detail on this topic and I would encourage readers to research other articles and opinions. 

Issue #1 – Cost

I don’t think it will surprise anyone to know that as a professional tiny house builder, we’re in the business of building tiny houses for a profit. Gross, I know. Not only do we need to cover the costs of materials and the direct labor that goes into building the tiny house, but we need to cover additional costs including: factory space, tools & equipment, insurance, taxes and our indirect labor cost, such as bookkeeping and management. All the direct costs and a portion of the indirect costs (aka overhead) go into the price of a tiny house. Then we cap it all off with a light sprinkle of margin or profit. It might look something like this:

26’ Tiny House on Wheels

Direct Costs
$  35,000 Materials 
$  21,000Labor (We’ll get into this in issue #2)
$  56,000   Direct Cost to Build
Indirect Costs
$ 15,000 Overhead 
$ 17,750  Margin @ 20% 
$ 88,750 Retail Price before tax

These numbers assume we already had building plans in place and that there was no additional cost for drafting, engineering and plan approvals. Now let’s compare that cost to that of a cost of a DIYer building a tiny house themself. Assuming you do all the work and don’t hire any sub-contractors, all you’re left with is the cost of materials. As a builder, we have access to preferred pricing from many vendors that probably equates to a 10% discount versus paying retail. So let’s assume that a DIYer’s material costs increase from the $35,000 above to $38,500. Even with this cost increase, purely looking at costs, the DIYer saves about $50,000 building the tiny house themselves versus paying a builder. I’d say this issue is advantage DIYer. 

Issue #2 – Time

Even though tiny houses are . . . well . . . tiny, they need all the features of a typical house, albeit on a smaller scale, as well as a few features not required by a typical house. Generally speaking, it takes our team approximately 600 hours to build a tiny house from start to finish. Major components of a tiny house are:

TRAILERFRAMINGSIDING
ROOFWINDOWS & DOORSINSULATION
LOFT/STAIRSELECTRICAL SYSTEMPLUMBING
HEATING & AIR CONDITIONINGAPPLIANCESCABINETRY
FIXTURES & FINISHESINTERIOR WALLSCEILING FLOORING

The last steps of building a tiny house are trimming it out and painting and this is where things can really bog down. A tiny house can go from start to looking like a house in just a couple weeks, but it can take a couple hundred more hours for us to dial in all the details that make a tiny house a beautiful, comfortable living space. With a crew of 3 or 4, we can build a tiny house start to finish in about a month. With our current backlog and wait times to get a trailer, we tell customers to expect 3 to 4 months from order to delivery. 

Now let’s say a DIYer does the same job and has the skill to spend the same 600 hours building their tiny house. Assuming this person has a full-time job, that means they’ll most likely be building the tiny house in their “spare” time. If they were to spend 2 hours per workday and 6 hours per non-work day constructing the tiny house, they could put in 22 hours a week working on the tiny house. Without taking any days off, they would have their house complete in about 27 weeks, or a little over 6 months. If the person has a need for tiny house sooner than later, this gives the advantage to the professional builder. But if time isn’t of the essence and the person enjoys the idea of making a significant time commitment, building the tiny house themselves may be an excellent option.  

Issue #3: Inspections and Resale

As a builder in the great state of Washington, our tiny house builds are regulated by a special group within the Department of Labor & Industries called the Factory Assembled Structures division. Every one of our tiny house builds must begin with an approved set of building plans. As we build, an L&I inspector comes to the shop for several inspections per house including framing, electrical & plumbing, insulation and a final inspection where they affix an insignia to the tiny house verifying that it was built according to the plans and that it met the state’s requirements for recreational vehicles. This inspection process is mandatory for professional builders as a means to ensure public safety. 

If an individual builds a tiny house for their own use, this process is not required. However, that doesn’t necessarily mean that no inspections are required at all. People often tell us that if the structure is under 200 sq ft, they don’t need a permit. While that is true for storage sheds, it’s not true for buildings designed to be used as “habitable” space like an office, extra bedroom, art studio, etc. Typically any building that is designed to be lived in requires at least an electrical inspection. It’s important to check with your local municipality to make sure you understand the rules of engagement.

Additionally, if a tiny house owner is looking to place their tiny house in an RV park or other place where tiny houses on wheels are allowed, that facility may require that the tiny house has an insignia on it verifying that it was built according to existing codes. So you may not have the freedom you hoped for when building your own tiny house.

The last consideration when it comes inspections and insignias is resale value. All things being equal, a tiny house on wheels with an insignia will have a higher resale than one without. This is because potential buyers know the house met certain build standards and they will not have issues proving that their tiny house is a registered recreational vehicle.

There are of course many other considerations when choosing whether to build or buy a tiny house on wheels. This article was meant to shed some light on 3 of the primary issues we see. If you would like more information about our company or tiny houses, please visit our website www.chnwbuilds.com, send us an email at info@chnwbuilds.com or give us a call at 206-910-1813. We’d love to hear from you!