As home prices skyrocketed and the process of buying a home became ultra-competitive during the pandemic, many individuals were forced to put their dreams of homeownership on hold. Walmart has unveiled a tiny home that you can buy for less than $16,000. Could this be the solution to the skyrocketing real estate prices, and should you buy this tiny home?
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The Bargain Walmart Tiny Home
Walmart’s Chevy Industrial Expandable Prefab House is priced at $15,900. It measures 19 x 20 feet and is marketed as a “portable prefabricated tiny home.” The description states that the house is “easy to set up and quick to assemble and comfortable to live in.”
The description also notes that the house will be shipped via flatbed trucks, and the customer is responsible for unloading the product with forklifts or a crane.
But is this home the bargain that it appears to be?
Whitney Hill, co-founder of SnapADU, a design-build firm specializing in accessory dwelling units in Southern California, explained that though the upfront cost of a $16,000 tiny home could be enticing, it’s important to consider several factors beyond that initial purchase price. For example, the home will need to comply with your local building codes, plus you’ll need to oversee transportation and installation logistics, as well as the cost and process of hooking up utilities.
“Unlike traditional homes or permanent Accessory Dwelling Units (ADUs), tiny homes often come with regulatory challenges depending on the state and city, making it vital to confirm zoning laws and long-term viability as a residence,” explained Hill.
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Potential Delivery Costs
According to Hill, the delivery of a prefabricated or prebuilt tiny home can come with significant costs. You will typically need to invest in site preparation, such as clearing and grading the land and performing foundation work. Hill estimated that the site preparation costs can range from a few thousand dollars to tens of thousands of dollars, depending on the complexity and location of the site.
Additionally, you may need to arrange for cranes or specialized equipment to unload and place the home.
Utility Hookup Expenses
Heather Miksch, Vice-President of Operations at Villa Homes, a builder of ADUs in California, explained that utility hookups are essential for tiny homes for several reasons.
“When you buy a tiny home kit, you are not actually buying a home — you are buying a fancy shed,” she explained. “If the home doesn’t have plumbing, a kitchen and a permanent foundation, it won’t increase your property value, and it can’t be legally rented out.”
Water, sewage, and electrical hookups may require extensive work such as trenching, the installation of meters and even infrastructure upgrades.
“Costs for utility hookups can vary widely, generally ranging from $5,000 to $30,000 or more, based on proximity to existing services, upgrade requirements, and local regulations,” explained Hill.
Hill also highlighted the fact that, based on an evaluation of the tiny homes presently on Walmart’s website, it doesn’t appear that any of the models are designed for full utility hookups, such as for sewer or water.
“If a homeowner is looking to have a bathroom or kitchen, a Walmart tiny home kit would not be appropriate and they should look into building an ADU,” she added.
Finishing Work on Prebuilt Homes
According to Miksch, the process of finishing a prebuilt home can be quite involved. A tiny home’s structure will need to be put together, and will require work by boundary surveyors, plumbers, electricians, and additional specialists.
“You will likely want to engage a general contractor who has good insurance, – otherwise you may be responsible for any onsite injuries,” Miksch recommended.
The interior finish work required can be substantial, too. Hill explained that many prefabricated homes, including the kits sold by Walmart, are “shell-only” homes, meaning the buyer will be responsible for the finishing touches. That finish work can include installing appliances, completing plumbing or electrical work, adding interior finishes, and even reinforcing insulation.
Since homes that may cost less initially can actually end up costing more by the time this work is completed, Hill recommends that buyers carefully assess what is included with the home before making a purchase. Walmart’s home kits exclude interior finishes like drywall, lighting, and flooring. They also exclude the foundation and electrical materials.
Additional Tiny Home Challenges
Hill encouraged potential tiny homeowners to consider the whole picture before making a tiny home purchase.
“While the idea of low-cost housing may seem appealing, hidden costs, zoning challenges, and utility expenses can quickly escalate,” she explained.
She recommended that potential homeowners thoroughly investigate their local regulatory requirements and engage with professionals to evaluate the total costs before buying a tiny home.
Miksch also highlighted the importance of working with professionals when building a tiny home for residential use.
“If you are planning to build a little backyard structure for your own use, a home kit may be a fun thing to consider,” she explained. “However, if you are hoping to use your tiny home to house yourself, family members, or other renters, I highly recommend working with a company such as Villa, who can help you navigate the complexities of building with a permanent foundation.”
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This article originally appeared on GOBankingRates.com: You Can Buy a Tiny Home at Walmart for Less Than $16,000 — Should You?
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