Friday, June 16, 2023

Someone's not doing the math...


Zero Hedge had an article yesterday about Home Depot's $44,000 tiny house design.

Called the "Getaway Pad," the 540-square-foot kit home has enough space for a living room, kitchen, one full bathroom, a bedroom, and a rooftop deck accessible by a spiral staircase. The "framing kit" costs $43,832.

The tiny home is a framing kit made by PLUS 1. Home Depot said, "Most finishings you'll need to complete your personal space such as doors, windows, electrical, plumbing, and finishes" are available on its website or at stores. This means the home could cost thousands of dollars more, depending on how one furnishes the inside.

There's more at the link.

So... you have to cast a cement/concrete pad for the house, pay someone to erect it, pay more for all the internal bits and pieces, insulate it, lay power, water and sewage lines, and all the rest.  $44K is only the start;  I reckon by the time you add all of the other elements, you'll be paying at least 50% more than that, if not higher.

In contrast, I put up a metal building in my back yard last year (details at the link).  It measures 16'x25', for a total area of 400 square feet (albeit without internal partitions to divide it into rooms).  The total cost - including concrete slab, building kit, erection, insulation, paying extra for a regular and a garage door, electricity and a mini-split HVAC system - came to almost exactly $25,000.  If I wanted to, I could move in and live in it.  The only drawback would be that it's rather noisy inside during a rain- or hailstorm.  Earplugs would be essential!

So, tell me - why would a bare-bones kit for a slightly larger building, but without any of the extra elements I would need, cost so much more than my complete shed?  I could put up another shed, add partitions, bathroom, kitchen, etc., and still pay less than the base kit price;  and if I put up a shed of the same size as the kit, I daresay I could finish it, with all added bells and whistles, for not very much more than the base kit price.

Someone's making a killer profit on this kit.  It's anything but a bargain.

I wonder... should I buy a plot somewhere, put up three or four sheds like that with basic internal partitioning, fittings and fixtures, and rent them out as tiny houses?  I reckon I could build each one for less than $50K, and if I charged the going rate for tiny houses, I could get a return on my investment of at least 15% per year.  That's a whole lot better than any bank or stock investment would guarantee!



Michael said...

Peter, you and I have lived in areas where a solid rain proof, pest proof one room shed was luxury. Note I said pest proof.

Our "perfect homes" have expanded wildly from the post WW2 2 bedroom one bath ranch to Mc Mansions.

But like the building of the Tower of Babal humbleness in inflicted.

As those informercials like to say "BUT WAIT" for the World Economic Forum's 15 minute cities where "micro-transportation" (read feet and bicycles) replaces the wide open road of automobiles and such.

BTW I hear tales that in TX they are already setting up "undocumented immigrants in dirt cheap housing, so you'd be in competition with the US Government and they HATE Competition.

Anonymous said...

Your description sounds spot on. The 'Tiny House' movement saves money on property needs but spends the savings on keeping up appearances. Building inspectors are a real PITA when it comes to structures built outside the norm. If you are planning to build one, it would be of benefit to meet with them to discuss the project. They don't like surprises and if asked politely for assistance in planning, can smooth projects like that.

You could erect an aluminum 2 car carport over your small metal building to provide more protection from hail and sunlight. Should help your building insulation from direct sunlight.

Years ago, I frequented a forum which had a member that purchased a small rural property that had been a small business. It had a small empty rigid framed metal with an overhead door. He purchased and lived in it, installing a travel trailer inside for extra protection. The building also housed a small fleet of motorcycles too. Easier to secure from small time burglary.

We use one of those carport units for our ranch shelter, adding a wood platform for sleeping inside a closed space. About 8' x 8' square, the floor mounted high enough for a truck bed to slide under for easier loading.
Its gone through two minor hurricanes with zero damage.

Jess said...

Going to a pre-engineered metal building company would lead to a larger building, with a wind-rating, and a custom design.

A premanufactured home would be a better option than the kit home, be turn key ready, except for utility hook-ups, and be designed for the area to be installed.

Anonymous said...

I think Michael and Anon nailed the issue: appearances! People are so concerned with their image and appearance. Its a lot different in the NE than down here in ETN, and the rest of the south. Very significantly, I had no idea until I moved out of there, the amount of social pressure exerted on where you live and what your job title says about you. I think it is an underlying part of our social issues:
Up north it was the external image that mattered most. Spouses could be philandering swingers, house a mess, kids unruly, debt to the moon.... but if you lived in the right zip code, had that manicured lawn, 2 hondas and a job title, none of that mattered.
Down here its who you are, what do you do with your kids, where you go to church, and are you employed. They don't care if you're the jizz mopper at the nudie bar, just have a fucking job.
Huuuuge differences culturally. When I was out of work up there, everyone tells you to get all the freebies (welfare, medicare, etc.) When you're out of work down here people tell you about their neighbor or uncle who's hiring, and their church has a blessings box outside if your cupboard is ever short.
Yuuuuge differences.

Anonymous said...

Looking at the additional cost to of complete this architects' vomit it looks like it would cost about $140 per square foot, without land, sewer, or utilities. These are near luxury prices in much of the US.
Zoning and building codes are a necessary evil, to protect the value of existing properties from being reduced by newer construction that impacts its value, as there is no effective way to sue for such relief.
That said, many of these regulations exist to protect industries, rather than people, and keep lowet cost housing from being built where it is needed.
John in Indy

Steve said...

In 2021 I found out I needed a storage shed for my stuff. Turn-key, (8 foot by 10 foot on piers) built by Joe-schmoe, the price; $3600.
Built by me over the course of a VERY HOT summer; $1900.
The inspector asked me if I built it. Yeap. He handed me the "approval sticker" without even looking inside of the building.

EricW said...

Speaking of lightweight structures, looks like you were on the fringes of yesterday's big storm. Hope you didn't get structurally challenged by it.

Paul M said...

Tiny Houses are symbolism for social status among a certain demographic. It's a trailer house as most are built on 6x16 flatbeds.

$44K for framing materials? Minimally double it for remaining foundation and finish costs, triple for contingencies. For that money why not buy a used 5th wheel or bumper pull on those are way down from mid-Lockdown prices, and they come ready to go with all the amenities. We have a [remodeled]'56 Shasta...we'd live in that before a trailer box.

PS- Metal roofs are notoriously noisy, adding 1/2 of foamboard on the purlins before installing the roof panels reduces this significantly, otherwise insulate the underside of the roof.

Anonymous said...

Depending on where you are, the "Gateway Kit" might be easier to get approved to code standards. A "kit house" would probably be acceptable in places where improving a portable building is verboten.

Another consideration is that developers and contractors just flat won't do starter homes. The ROI is too small. Several I've talked to insist on a bare minimum of 2500 square feet, with very nice trim and finishes that bring the cost up to $A Lot. Anything less doesn't pay. So a kit house might well be the only way to get a starter home.



JaimeInTexas said...

Appearances. Yep. Most likely because of trying to please those of the female side.

Why build houses in the South with dark shingles and high sloped roofs? Makes no sense.

To minimize sound, spray on insulation and hang false ceiling which also can be used to hide ducts, cables, etc. Need not cover every square foot and indirect lighting can be used to mask gaps and provide soft ambiance.

Anonymous said...

From my research, "Tiny Homes" are primarily a code and zoning work around for areas where prohibitive costs for "normal" construction make housing unaffordable to most people.
They don't make sense for long term use anywhere else.

Aesop said...

Nearly $44K just for the kit to frame a house?!?
That's more than it costs to pay for both materials and union carpenters to frame a 2000 ft² house.

This is like the steak house menu:

12 oz Sirloin : $15
Manager's Special:
6 oz Chuck steak $25

No wonder the manager likes it.

For reference:
(Home Depot prices from 30 seconds ago)
You can build a wood conex-box size structure 8' x 8' x 40' (320 ft²) with

108 2" x 4" x 8' $3.35@ = $361.80 (wall framing)
21 2" x 6" x 8" $6.22@ = $130.62 (ceiling joists)
21 2" x 8" x 8' 6.62@ = $139.02 (floor joists)
44 3/4" x 4' x 8' pressure treated 49.38@ = $2172.72
(Floor, roof, walls)
20# 3½" 16d galvanized framing nails $9.43@ = $188.60
That comes to $2992.76, not to frame it, but to build the thing.
Throw in $1K for roofing, another $500 for paint, $2K for doors and windows, and $500 for hardware, and even $500 for StrongTies to hold the lash-up together, and you're still at less than $7500 for a fully-built space that's 64% as big as the kit will frame, and as big as a large trailer.
You could pay five guys $100/hr each for five days' work to build the thing, and that would still only add $20K to the price, and you'd still be $17k cheaper than the price of the framing "kit", for which sum you could insulate it, wire it, plumb it, wall off separate usage areas (bedroom/bath/kitchen/living-dining), and get the fixtures, cabinets, furniture and carpet for a finished tiny house, and probably still have money left over from $44K.

If anyone would buy that framing kit, have them bring me a prime heifer to trade me for some magic beans I just happen to have handy.

"There's a sucker born every minute." - P.T. Barnum

ASM said...

$252 per square foot for a rather nice home:

JNorth said...

There is a building supply company in my state that sells small pre-fab cabins that are 12x16 or 16x20, a year or two ago the 12x16 was ~10k and that was for the pre-fab walls, rafters, floor joists, etc. Everything you need to put it together and it could be done in a day or two with a couple people. They are post-on-pad as we have permafrost up here so you don't need a concrete slab.

I'm not sure if it is a several folks or just one guy in several locations but there are now several small "neighborhoods" of these where 6 to 12 of them were built in an a lot and are rented out. In my area it is probably a good return on the investment.

tsquared said...

Back in the early 90's I built a 12' x 16' camping shelter at the camp of the hunting club I belonged to. I had 4 telephone poles that were 14' that I put 4' into the ground with a cement footer. The walls were 6.5' on the 2 outside wall and the 7/12 roof pitch. It had one window and one door. The inside had a built in bunk bed with a singe up top and double underneath. It had a kitchenette with a 2 burner stove, a large toaster oven, and a sink just large enough to was the 14" skillet that I had. The table was a drop down that could seat 4 with 2 of the seats being on the double bed. A flush toilet was in a closet on one end of the 3.5' wide porch and a shower closet was on the other end. We tapped into the camps well for water and I put in an instant-on electric hot water heater. Back then I had less than $6 grand tied up in it. Today I don't think I could build it for less than $20k.

Charlie said...

I just built a 10 X 12 greenhouse.
Materials delivered from home depot
all in $2600
rather than the clear panels, regular roofing and siding materials would have knocked the price down just a bit.
AND I overbuilt it.

HMS Defiant said...

You know a GP medium tent over your shed would significantly reduce the sound of water hitting the roof. :)

Orvan Taurus said...

Through at least the latter half of the 1970's I lived in a Menard pole building (no I was NOT "born in a barn" but I have lived a place that could have mistaken for a farm outbuilding...) You ain't kidding about hailstorms! Rain was no big deal, but hail was **LOUD**. On the other hoof, chimney fires didn't matter - sheet metal doesn't catch fire that easily.

The building as *hastily* subdivided into rooms when the landlady of the least expensive (inexpensive, NOT "cheap"!) place in town decided she, or her sister, could no longer live on her own. It was whole lot of Not Much... BUT it was cool (A/C) in the summer, warm (wood with oil backup) in the Winter, and the roof held. Non-ideal? Sure. But not *BAD*. I found out later just how amazingly lucky we were. The family was Traditional and Held. So what if the living space was a bit odd?

Anonymous said...

In and around Cookeville Tennessee tiny houses are above $200k. Most of the purchases have moved fron California, New York, and other bastions of liberal idiocy.

Will said...

Most anywhere you would want to live in the US, that has zoning laws, will make a "tiny home" illegal to build or live in. There seems to be minimum home sizes and construction requirements that are intended to protect land values and labor groups. It may be legal to build the structure, but living in it is a whole different story. It's not considered a "home" until you attempt to take up residence.

Lots of u-tube videos of the travails of people trying to live in them and deal with various levels of government interference. For that matter, even if you own the land, most areas won't let you live in a travel trailer or motorhome on it, although some will for a short time while you are building a traditional home. If you aren't spending big money on a big house, you will end up spending it on legal issues if you attempt to do something different. It would appear that the primary duty of a sheriffs dept is to enforce zoning laws.

Aesop said...


That's only true if you attach it to the ground permanently.

That's why most of them are built on trailer frame bases. Once they're on wheels, they become "vehicles", not "structures", and zoning laws are inapplicable.

Vehicle codes generally only care that hunks won't fall or fly off rolling down the road.

You can also put the frame on rail bogies and build train car homes/rooms on track sections, and entirely avoid building code purview (and property taxes!) in exactly the same way.

Which is generally the whole point of the exercise.

HMS Defiant said...

I don't know about the last comment. Boats are vehicles and California goes lightyears out of its way to tax them everywhere in the world most especially if it was bought in California. People went out of their way to legally change the boats homeport to another State or country and California taxmen went after them hammer and tongs for years.

Aesop said...

@HMS Defiant,

Boats are indeed taxed as yachts over a certain length.
There is no length at which a mobile home (even built on train bogies or semi-trailers) becomes a mansion.
Yet again, that's the whole raison d'etre for tiny houses.

Anonymous said...

A couple of years ago, you could buy a complete prefab home, with plumbing, electrical, and most accessories from alibaba for a bit over 20k. All comes in a shipping container, ready to put together.