What is the Cost of Building a Small House?


Over the past few years, Off-Grid Living has informed so much information on off-grid living topics. A question that keeps coming up frequently among our readers is, “How much does it cost to build a small house?” This article is about what could be the cost of materials and labor to build a small house.

Off-grid Living will share detailed records of the cost of materials and labor as two different friends were building their own houses. We choose two different individuals to make a comparison on what kind of small or big differences in building a house can be. Do visit Lifetime Exteriors now >>> to learn more about the affordable exterior design packages that are available in the market to select the one that suits your house.

The cost of a small house will depend on many factors such as:

  • Building yourself or hiring out the labor

  • Building permits required where you live

  • New or reclaimed/recycled materials for building the house

  • The quality of your materials (for instance a granite counter top vs. a re-used counter from the Habitat ReStore)

  • Many other factors, such as wiring for electricity, plumbing, etc which can be done best by hiring professional services from companies like SLAM Plumbing

Cost to Build a 120 Square Foot Small House on Wheels

Our friend Bill is a skilled natural builder who used a combination of his own labor, volunteer labor, and hired labor to build his 120 square foot house on wheels. His house includes a 6 x 8′ porch, and a 7 x 7′ sleeping loft.


Bill’s house was built with a combination of reclaimed lumber for the framing, subfloors, and trim, and locally milled wood to frame his porch and sleeping loft. The reclaimed lumber was obtained from a regional friend whose cottage industry is to find, collect, and prepare reclaimed lumber, so builders can use it in a “like-new” condition. As such, his lumber costs .80 cents a board-foot.


Bill’s walls and ceiling are insulated with 1″of rigid foam and 6″ of blown cellulose, and the floors are insulated with 8″ of rigid foam, which he says it certainly added to his costs.

Other reclaimed materials include cabinets, all windows except one, floor tile, sink, Formica countertop, tongue and groove subfloor and loft floor, trim wood, custom closet design with shelving, and a trailer chassis. He purchased a new table and chairs and those costs are reflected here as well.



Bill’s Labor: close to 1,000 hours

Volunteer Labor: 100 hours

Hired Labor: approx. 465 hours at $15.00 per hour

Materials Cost: $14,200 (this includes a used hay wagon chassis on which his house sits)

Labor Cost: $7,000

Total Cost of Bill’s 120 Square Foot House: $21,200


Cost to Build a 350 Square Foot Small House

Our friend Jon has years of building experience, and did most of the labor on his 348 square foot house. He gladly accepted volunteer labor when it was offered, but did not track the hours, as much of his building was done in between planting trees and growing a garden.


Jon’s house was built with a combination of reclaimed and new materials. He used locally milled wood for the framing, but purchased reclaimed 100-year old barn wood for the exterior siding. The windows and doors were a combination of reclaimed from the Habitat ReStore, and bargains from a materials overstock warehouse. You can check here for the best warehouse facilities.

The house is insulated with rigid foam in the floors and blown cellulose in the walls and ceilings. Half of the house’s floors was insulated with free, used rigid foam; the rest was new.

Jon’s house interior is still unfinished, but the estimate of the materials he needs to purchase (sheetrock, plaster, low VOC floor sealant for the living room and kitchen) are included in the costs. However, the cost of his front porch, or some interior finish wood/shelving are not included in the cost.

Unlike Bill, Jon did not account for items like a table and chairs, sink, counter top material, or a wood stove because he already owned those items.


Jon saved thousands of dollars by doing most of the work himself, occasionally trading work with friends and neighbors, and hosting a week of work parties for the final push of insulating. He was also blessed with three weeks of help from his best friends, and many hours of drop-in volunteer assistance.

Jon did hire a carpenter friend for one afternoon.

Materials Cost: $7,800

Labor Cost: $470

Total Cost of a 348 square foot house: $8,270

So, how much does it cost to build a small house?

It really depends on exactly what you are including when you declare your sticker price. I have seen advertisements online for plans to build a tiny house with new materials, for $2,000. But when you read the fine print, that cost does not include doors or windows.

How quickly do you need your house built? In Jon’s case, he needed to move into his house before the fall weather became too cold to camp in a tent. So he ended up purchasing new materials that he perhaps could have obtained used, because he needed them immediately.

Where do you live? Here in NE Missouri, our friends Bill and Jon have access to relatively inexpensive lumber and contractors. A lack of building codes in their area makes building very inexpensive.

One should also consider the costs of maintaining and living in a small house. Bill, who spent hundreds, if not thousands of dollars on insulation, literally heats his house with small sticks of wood that he gets for free at the local sawmill, or cuts by hand from the forest around his house.

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