How to Start a Tiny House Business

Part 1 - How to start a Tiny House business - Background

Tiny houses are all the rage. These uber-small homes have just enough space for a minimalist individual or small family. A tiny house business builds, sells and/or rents tiny houses to those looking for a place to live or stay.

You may also be interested in additional unique business ideas.

Our guide is in 3 parts:

• Part 1 - How to start a Tiny House business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a tiny house business?

The building materials are the primary expense. The construction of tiny houses requires an array of materials ranging from wood to nails, bricks, lighting, appliances, flooring and so on. An office for administrative functions will also be necessary. Your office needs computers, printers, desks, chairs and high-speed Internet. You will also need a team of tiny home builders to construct these cute little houses. Some tiny house builders buy the property upon which tiny houses are built. If you plan on purchasing such property before constructing the tiny houses, be sure to budget for these costly acquisitions of land.

What are the ongoing expenses for a tiny house business?

The cost of labor is one of the major tiny house business expenses. Your tiny house builders will require a wage of at least $12 to $15 per hour if not more. The construction foreman/manager will require a salary in the range of $45,000 to $100,000. You will have to hire a receptionist, administrator, marketing professional and accountant as time progresses. A receptionist and administrator will earn between $10 and $15 per hour. Marketing and accounting professionals typically earn between $35,000 and $55,000 per year.

You will need an office to conduct your tiny house business. This space will likely cost between $700 and $1,500 per month depending on its size and location. Utilities and high-speed Internet will cost between $150 and $250 per month. Budget in another couple hundred dollars per month for insurance. Constructing tiny homes requires building materials. The cost of these materials hinges on the number of tiny homes you plan on building. You will likely spend between $2,000 and $20,000 or more for each tiny house’s building supplies. The exact cost hinges on the size of the tiny home along with its appliances and luxuries. If you plan on buying property and then building tiny homes on the land you purchase, your budget will be exponentially higher. Though tiny houses are small, the land upon which they are built can cost anywhere between $10,000 and $50,000 or more.

Who is the target market?

The ideal customer is an individual with an expansive budget and a desire for an upscale tiny home. In some instances it is possible to sell several tiny homes to a real estate investor who intends to “flip” those properties or use them as tiny house rentals/hotels.

How does a tiny house business make money?

Tiny house businesses make money by selling tiny homes to buyers. It is also possible to rent out tiny houses.

How much can you charge customers?

Tiny houses sell in a price range between $5,000 and $50,000 or more. The exact price depends on the size, location, and amenities within the house. These diminutive homes are quite appealing to a wide variety of audiences. If you decide to rent out your tiny home as a hotel of sorts, you can charge upwards of $100 to $200 per night. People are willing to pay good money for a brief stay in a tiny house in order to determine if this style of living is appealing and also to find out what all the fuss is over.

How much profit can a tiny house business make?

A tiny house business has the potential to make six figures right off the bat. The amount of profit your tiny house business makes hinges on overhead costs, the number of properties your team can build and the state of your local real estate market. Keep building and selling tiny homes and it is possible to turn your business in a multi-million dollar enterprise within half a decade.

How can you make your business more profitable?

If you have a tiny home on the market that few (or no) people bid on, consider renting it out. It is also possible to rent tiny houses as hotels. If you understand the intricacies of tiny house construction, you can make extra money by teaching others how to build these highly unique structures.

Day-to-Day and Growth

What happens during a typical day at a tiny house business?

A tiny house business owner orders building materials, manages builders, secures plots of land, buys/sells tiny homes and establishes relationships with suppliers. Some tiny house business owners even handle the accounting and marketing duties until the business reaches the point where professionals can be hired to handle these responsibilities.

What are some skills and experiences that will help you build a successful tiny house business?

Knowledge of home construction with a particular focus on tiny house construction will certainly help. Those who are familiar with the real estate nuances of their area will have a firm grasp on the local codes that apply to tiny houses and the best places to build these homes. It will also help to be a savvy marketer. Though many tiny homes sell themselves, making target customers aware of your tiny homes for sale is critically important.

What is the growth potential for a tiny house business?

Tiny houses are as en vogue as it gets. Just about everyone wants to spend a night in a tiny house. Plenty of millennials are interested in these diminutive homes as permanent living spaces. Even baby boomers looking to downsize are interested in tiny houses. The potential for growth is exponential. If you build or acquire tiny homes in the next half-decade, they will almost assuredly sell at a profit. Capitalize on this trend now and you will be able to grow your tiny home company into a business empire across posterity. It is likely that tiny houses will remain popular far into the future as the population increases, space becomes more limited and traditional home values continue to soar.

What are some insider tips for jump starting a tiny house business?

Become familiar with your local building codes. Find out the specific regulations in your jurisdiction that pertain to tiny house construction, location and living. Hire your building team with care. Only select builders who understand the nuances of tiny home construction. If you aren’t sure where to start and do not have experience with tiny houses, it is advisable to attend at tiny home workshop.

How and when to build a team

You will need a team of tiny house builders right away. You can’t build all these houses yourself. Furthermore, it will help to hire a real estate agent or tiny home expert to help you show the tiny houses you have for sale. If you do not want to answer the phone calls of prospective buyers throughout the day, it will be necessary to hire a receptionist. Hold off on hiring a marketing professional, accountant and administrator until your business ramps up.

Read our tiny house business hiring guide to learn about the different roles a tiny house business typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.

Part 2 - Is a Tiny House business the right fit for you?

Part 3 - Action plan to launch your Tiny House business in 90 days