Look..building a house for $50K or less is going to be a huge challenge–but there are some strategies you can employ that just might help you pull this off.
There are two ways to build a house for $50K:
- Do a lot of the work yourself building with a low cost home kit and get the land for free or practically nothing
- Go with a really small modular prefabricated house (ideally with some financing options)
Let’s explore the first option–and some strategies you can consider to pull off what most people would consider to be an impossible task.
Securing Low Cost Land
The first step in your journey toward building a house for $50K or less is securing land for an incredibly low cost.
There are many areas in the country where $50K wouldn’t even buy you the raw land–much less be your total budget.
You’ll need to get creative if you want to get really low cost land.
Here are some strategies to consider:
- Find a land owner that is willing to do owner financing
- Contact a homeowner with a large lot and work out a deal to subdivide
Land Owner Financing Strategy
There are some folks out there that are sitting on property that they no longer want in an area that isn’t in high demand.
Turning that land into something that generates a predictable cash flow can be attractive to the right seller–which is your opportunity to get some land for little upfront cost.
An owner-financed land deal allows you to purchase the land from the seller for a set amount of money down and a monthly payment until the terms are settled and you’ve paid for the land.
In the right area of the US, you can probably get someone to sell you the land for as little as $500 down and a fairly low monthly payment.
Out here in the state of Florida, I know certain areas where you can buy land for less than $10K (total).
Over a 5 year payment term, this could be as little as $166 per month owner-financed (not counting interest or any money down).
Buying Land at Auction
Every year, there are thousands of parcels of vacant land that go up for sale by local governments when the owner hasn’t paid their property taxes.
It’s not uncommon for these parcels to get sold for way under $10K–which frees up critical capital needed for you to hit your goal of building for less than $50K.
Utilities Connection – A Hidden Money Pit
While searching for a bargain on the land–remember to keep one thing in mind that is critical: The property must be close to the utility pole hookup to keep the costs low on getting an electrical connection.
Running electricity to a house when the utility pole is far away can get extremely costly very quickly–that’s why some folks that own land in remote locations can’t get rid of it–it’s too expensive to get the power set up without some off the grid power set up.
Going off the grid for your electricity requires solar systems, batteries, and potentially generators (not to mention a unique lifestyle of conversation). This can get expensive and may not be practical in every climate.
The easier option here is to make sure the lot is close enough to utilities where you won’t have to worry about this.
Option 1: DIY Home Building Using a Low Cost Home Kit
The world of low cost home kits is a revelation for anyone looking to build a house on an extreme budget.
You can go on Lowes or Home Depot’s website right now and find what appear to be really nice looking, full sized homes with a modern design for $20-40K.
Seems too good to be true–right?
Well, that’s because it is.
You see, these kits are basically shells. You’ll need to fill in the blanks with things like appliances, all fixtures, electrical, plumbing, and sometimes even basic things like windows and doors.
You’re basically buying the frame kit–which gets you about 25% of the way to a complete home.
That other 75% is going to add up to a considerable cost, unless you are able to do the work yourself.
You’ll have to check the local laws in your area–but building your own home and sub contracting out the necessary is allowed as an “owner builder” — someone that owns the land and builds the house themselves.
You’ll still need to obtain the proper permitting and get inspections done by local authorities–but building this house DIY is 100% necessary if you want to get this done for less than $50K.
Being Your Own General Contractor
Keeping the cost to $50K is going to require you to act like a general contractor and work with subcontractors for stuff like the electrical and plumbing systems.
Make friends with local electricians and plumbers–you’re going to need their help with your tight build budget.
See if you can barter some of your skills and talent for their skills and talent.
I remember when I couldn’t afford chiropractic treatment in college, I bartered with the local Chiro to get adjusted in exchange for creating his office a website.
It may not be easy–but that’s what it’s going to take to get a house done for $50k.
Buying Used Fixtures and Appliances
Part of building a home is getting it set up with all of the fixtures and appliances.
High end fixtures are one of the main reasons why “luxury” homes cost so much to build.
When you start adding high end fixtures like Granite countertops, stainless steel, and fancy tile and cabinets–you’re going to drive up the cost of the finished product.
It’s not uncommon to hear stories about someone that remodeled their kitchen and bathroom and spent $50K just on that alone.
At this price point–we need to save where we can–so let’s go shopping for these things.
Consider making friends with local home builders and see if you can buy any leftover materials from their builds.
There is a notorious amount of waste when it comes to traditional, on-site built homes. This waste is your opportunity to score some materials for your build on the cheap.
In terms of appliances, countertops etc.–consider checking out your local Habitat for Humanity ReStore.
ReStores are all throughout the US and sell second hand fixtures, cabinets, appliances, and pretty much anything else you might need to round out your build.
Buying these items second hand can help you save a ton of money in the end.
Flooring
Make friends with the local builders in your area and see if you can buy any leftover materials from their builds.
There may be an opportunity to buy leftover flooring at a wholesale price if a homeowner changes their mind at the last minute–or some if leftover.
Flooring retailers often have sales throughout the year as well–wait for the perfect time and buy at a discount.
Vinyl plank flooring is easy to lay and snaps together. Carpet is also fairly easy to lay–so stick with those two choices (carpet is the cheapest for the materials cost).
Why the Home Kit Option May Not Work
As you can see, it’s incredibly difficult to build a home for $50K or less when you’re going with a full size house and use a kit.
There are a ton of extra expenses–and a lot of variables. If anything goes wrong–it can blow up your budget.
There may be an easier way to build for less than $50k…
Option 2: Going with a Complete, Low Cost Prefab / Modular Home
If you’re willing to go with a small house–you can buy a complete, done for you prefabricated modular home for under $50K.
Consider the Casita model by a company called Boxable.
It’s just under 400 sq ft. and costs just under $50K. It’s completely done on the inside and includes fixtures, appliances, flooring and everything you need to start living.
There will be some initial feed to get it set up and connected to the utilities–but this is the low hassle approach to ultra-affordable housing.
Companies like Boxable will even hook you up with financing so you can get your unit for a low monthly payment–how sweet is that?
Now, the tradeoff is this: You’re going to be living in a small house.
But consider this…
Modulars like the Casita are literal boxes–and are meant to be reconfigured, combined, added to, and even moved in some cases with their foldable design.
If you paid cash for the Casita (and the land)–you could live for a year in your paid for Casita house–and save up the cash to go ahead and buy another similar unit!
This allows you to stay without a mortgage and continue to increase the living space on your property with new additions, or at least new units (separate kitchen and living quarters, etc.).
It’s definitely not the traditional approach–but hey, you’re trying to live on practically nothing.
The Casita is a pretty decked out and classy structure. Can you go in one of those for one year while you make your low cost housing dreams come true?
The world’s richest man, Elon Musk, lived in a Casita on and off for months when he needed a place to crash near the Tesla factory.
If the world’s richest man can stay in there–chances are you can pull it off.
If you’re prepared to go against the grain a little bit–I think you can save and build your way to success by going the small, modular approach.
It’s more predictable, and won’t require you to become a general contractor (or gain the skills of one) to make your low cost housing dream come true.
Conclusion
Look, don’t let the naysayers tell you otherwise. It is possible to build yourself a low cost house–even one that is $50K or less.
It’s going to require a ton of planning up front–and some major sacrifices on your part if you want to pull it off.
I’d personally opt for going the small, modular built route to get something livable at first–and add on to it over time as you take some of your savings (from not having a mortgage payment) and put that into more modular units that can be combined on your property.
Sure–even a tiny house might be more than $50K all in when you factor in the land and assembly–but you can get pretty close with the Boxable Casita.
Let me know if you try any of these strategies on your journey.
Good luck!