Building a new 500-square-foot (46.45 sq m) house can cost as little as $20,000 dollars if you opt for a pre-constructed accessory dwelling unit. If you go for a traditional new construction, it can cost up to several hundreds of thousands of dollars and beyond.
What Is the Cheapest House To Build per Square Foot?
The cheapest way to build a 500-square foot (46.45 sq m) house is to invest in a pre-constructed, shippable modular home and, depending on local regulations, keep it at a trailer park along with other mobile and manufactured homes. This approach may cost as little as $20,000 or even less.
Building a Small House
Before you build a small house, you need to consider a few things.
Land To Build Upon
Every home needs to be situated upon a plot of land.
While many new home constructions purchase outright the land onto which the home will be built, it is also common to own trailer homes or manufactured homes in larger communities where the homeowners rent the land upon which their home sits.
Permits To Acquire
The local government would need to authorize permission to commence a variety of components to the home building process, including the following:
- Building permit
- HVAC system permit
- Electrical system permit
- Plumbing system permit
Contractors are hired to complete the building of the house, including both the exterior and interior features and systems.
Typically, there is a general contractor who oversees the progress and quality control of the subcontractors. These are specialists focused on completing a small part of the finished product.
Foundation for the House
Newly constructed traditional homes would require a type of foundation for the home to be fixed upon, whether it is a simple slab of concrete, some extent of crawl space, or an impressively extensive basement.
For mobile homes or manufactured homes situated within trailer parks, a foundation would not be necessary due to the mobile or compact nature of the home itself. This can be a great cost saver that also supports mobility for homeowners.
HVAC, Electrical, and Plumbing Systems
HVAC is the acronym for Heating, Ventilation, and Air Conditioning systems combined together as one of the major features of a home for the safety and well-being of its occupants.
The electrical systems support the operation of household appliances such as stoves, washing machines and dryers, dishwashers, hot water systems, and climate control.
The plumbing system is important to ensure that sanitation needs are in good working order and that occupants won’t have to resort to public bathrooms.
Exterior essentials include features such as pavement, driveways, roofing, walls, doors, windows, landscaping, fencing, swimming pools, and patios. This would also include things like mailboxes, carports, or walls for a future vineyard.
Determining interior design is a highly variable component of building a new home.
Whether your kitchen countertops are made out of stone, square tiles, granite, marble, pure gold, or anything in between is something that will make a big difference in the total cost of the new home.
Likewise, fancier versions of household staples are a tradeoff between enjoyment and financial expense that you should clearly quantify before making any legal commitments.
Breakdown Analysis of the Expected Costs
While it is important to keep in mind that every situation is a little bit different, a new traditionally-built 500-square foot (46.45 sq m) house may cost as little as $62,500 or less or up to and exceeding $350,000, depending entirely on the particulars of the house being constructed.
While Synergy Homes calculates that a 500-square foot (46.45 sq m) home may cost anywhere from $62,500 to $72,500, combining a variety of resources into a single cost breakdown yields the following table, which features the running total cost of the house in the right-hand column.
|Component||Cost of Component||Cumulative Cost of House|
|Plot of Land||$0 ~ $17,000||$0 ~ $17,000|
|Permits||$2,200||$2,200 ~ $19,200|
|Foundation||$2,000 ~ $12,500||$4,200 ~ $31,700|
|HVAC, Electrical, & Plumbing||$30,000 ~ $52,500||$34,200 ~ $84,200|
|Exterior||$40,000 ~ $60,000||$74,200 ~ $144,200|
|Interior||$50,000 ~ $175,000||$124,200 ~ $319,200|
|General Contractor Fee||10% ~ 20% of total cost||$136,620 ~ $383,040|
Pre-Constructed Shippable Homes
While building a small home may not be as expensive as building a full-sized one, you can still be cost-efficient and save a bit of money.
Lately, there have been a wide variety of startup companies that market and sell pre-constructed, shippable modular homes for a fraction of the cost that a traditionally built new construction would run for new home-seekers.
One such company that is currently open to new investors is Boxabl. While they have not yet released pricing details for their Casitas, modular homes typically start at $10,000.
A great benefit to owning a pre-constructed home is that they surprisingly retain their resale value very well, even after occupants have been living inside them for some time.
“Tiny homes” are gaining quite a following. But what exactly is a “tiny home” and how much does it cost to build one?
The definition of a “tiny home” is any home under 500 square feet (46.45 sq m).
Thus, a 500-square-foot (46.45-sq m) house would just narrowly miss the categorization as a tiny home and would likely be regarded as a “smaller” home that size-wise sits in-between tiny homes and a typical single-family home.
Higher Costs Per Square Foot
Did you know that a “tiny home” costs, on average, approximately $400 per square foot (0.09 sq m) to construct? This is potentially a dealbreaker for value-oriented homebuilders, as a traditionally-sized home, on average, only costs around $150 per square foot (0.09 sq m) to construct.
This phenomenon suggests that, much like the electronics for phones and computers, making things very small can drive up costs due to the increased functional demands per square foot.
The kind of house you build should depend on your values and priorities of what you are seeking.
Luckily, prospective homeowners who are looking for something smaller have a full spectrum of price ranges and possibilities to choose from—whether simple and functional or ornate and awe-inspiring. Today’s smaller-sized homes can be virtually whatever you need them to be to accommodate your lifestyle.
For more, check out What Is a Composting Toilet?
Hey, I’m Jim and the author of this website. I have always been interested in survival, fishing, camping, and anything in nature. In fact, while growing up I spent more time on the water than on land! I am also a best-selling author and have a degree in History, Anthropology, and Music. I hope you find value in the articles on this website. Feel free to contact me if you have any questions or input!