Converting a Shed into a Tiny Home – A Step-by-Step Guide

Tiny homes have become an increasingly popular affordable housing option. While many tiny homes are custom-built from the ground up, converting an existing shed into a livable dwelling can be a more accessible DIY approach. Sheds provide an available and low-cost building to transform into a tiny house.

With some creativity and work, an old storage shed can be converted into a fully functioning small home. Of course, there are important steps, considerations, and costs involved in taking a basic shed and making it into an inviting living space. This guide will walk through everything you need to know to successfully convert a shed into a livable tiny house.

Is It Legal to Live in a Shed?

Before undertaking a shed conversion project, it’s important to understand the legal considerations. In many areas, zoning laws and municipal codes prohibit using sheds as dwellings, or have restrictions on minimum square footage to be considered a legal residence. Some rural or agricultural zones do allow shed homes, but you’ll want to research the local laws.

If your area doesn’t allow living in sheds, there may be ways to get approval for your project with proper permitting. Installing utilities like electricity, plumbing, and sewer can sometimes help make the case that the structure meets basic requirements for occupancy. It also helps to make sure the shed meets building code standards like minimum ceiling height. Consulting your local zoning office first is highly recommended.

With the rising popularity of tiny homes, some areas are becoming more accommodating by passing legal exceptions for small detached dwellings. If your location outright bans shed homes currently, getting involved in local government and advocating for tiny home-friendly codes can create change that enables your project.

Costs of Converting a Shed

One of the appeals of converting an existing shed is the relatively low cost compared to building a tiny house from scratch or buying a prefabricated tiny home. Here are some cost considerations for shed home projects:

  • Used storage shed purchase – A basic 8′ x 10′ or 10′ x 12′ shed can often be bought secondhand for $500 to $3,500 depending on age, materials, and condition. Scour Craigslist, Facebook Marketplace, and local listings for deal opportunities.
  • New prefab shed kit – Buying a new prefabricated shed kit allows customizing size and materials. A basic 8′ x 8′ to 12′ x 20′ kit can range from $3,500 to $10,000. Include delivery/installation fees.
  • Foundation – After purchasing your shed, proper foundation work is key. This includes a prepared gravel base, concrete slab, or pier block footings ($500 to $2,000).
  • Framing/Insulation – Any framing, insulation, and waterproofing can add $1,000 to $4,000+ to make the shed structure sound.
  • Electricity – Having proper electrical hookup and wiring for lights and outlets will likely cost $500 to $2,000.
  • Plumbing – Installing plumbing for bathroom and kitchen needs can range from $1,000 for basic sink/toilet to $5,000+ for full system.
  • Interior Finishes – Drywall, flooring, cabinetry and final fixtures will cost $2,000 to $8,000 for a ~100 sq. ft. shed.

Total Cost – In total, expect to spend around $6,000-$20,000 converting a basic storage shed into a finished tiny home, depending on size and amenities. That’s quite affordable compared to the $40,000 to $100,000+ for a custom built tiny house.

Step-by-Step Shed Conversion Process

Taking an empty shed and turning it into a comfy home is a major DIY undertaking. Here is an overview of the key steps involved in planning and executing your shed to tiny house conversion:

Prepare Shed Foundation

Having a level, sturdy foundation is crucial, otherwise the shed floors and walls will warp over time. Options include:

  • Concrete slab – Provides firm, level base, but permanent.
  • Gravel pavers – Allows portability if shed isn’t permanent.
  • Pier blocks – Raises shed off ground, but allows some shifting.

Ensure proper drainage around foundation to prevent moisture issues.

Run Electrical and Plumbing Utilities

Get appropriate electrical or solar panels hooked up, either buried or overhead wiring. Plan the circuits and outlet placement wisely.

For plumbing, determine if you’ll connect to existing home water supply and septic or install an off-grid system. Get proper permits.

Seal Air Leaks and Insulate

Sealing any gaps with caulk and spray foam will make the shed weather tight. Use fiberglass batts or spray foam to thoroughly insulate walls, roof, and floor against drafts or moisture.

Install Drywall and Interior Walls

With utilities and insulation set, add drywall or wood paneling to the interior walls and ceiling. Mud, tape, and paint for a finished look. Build dividing walls as needed.

Add Interior Finishes and Fixtures

Installation of flooring, cabinets, bathroom fixtures, lighting, and other finishes can now take place. Customize to your style and storage needs.

Create Loft Space

To maximize square footage, building a loft over the main space provides extra sleeping and living space. Just be mindful of ceiling height.

Build Fold-Down/Murphy Furniture

Optimize the compact floorplan with fold-down beds, tables, and other space saving furniture that tucks away neatly when not in use.

Add Bathroom and Kitchenette

A tiny wet bath with toilet, shower pan, and vanity can fit in a shed, if permitted. A compact kitchenette with sink, stove, fridge, andconvertible dining table/worksurface maximizes the cooking and eating area.

Finish Outdoor Living Areas

An adjacent deck, porch, or landscaping helps extend the tiny home’s living space outdoors. Outdoor lighting, seating, plantings, and fences or screens create pleasant yard space.

With diligent planning and work, your basic shed can be transformed into a custom tiny home haven that suits your needs and style. Let’s look at some of the design considerations that can make shed living comfortable and inviting within a limited footprint.

Design Ideas to Make Sheds Livable

While sheds weren’t originally designed as dwellings, there are many ways to adapt and customize them into great tiny homes:


Adding a loft over the main space doubles your usable square footage. Lofts can be framed with wood and accessed via ladder or ship stairs. Optimize headroom underneath.

Murphy Beds

Beds that fold vertically up onto the wall or down from built-in closets are great space savers. Murphy beds allow living rooms to convert to bedrooms.

Convertible Furniture

Tables that fold down from walls or raise/lower on pulleys allow dining then converting the space to a desk or lounge area.

Flexible Floor Plans

Use sliding barn doors, folding partitions, and modular, movable furniture to morph spaces from bedroom to living room and more as needed.

Lighting & Windows

Skylights, ample windows, and lighting help small sheds feel open and airy. Grow lights are great for plants.

Bathroom Hacks

Tuck toilets into under-stair closets or alcoves. Choose corner showers and vanities that maximize floor space.

Kitchen Organizers & Slideouts

Making use of vertical space with hanging pots and pan racks keeps counters clearer. Slide out pantry cabinets also gain storage.

Outdoor Living Areas

Decks, porches, and terraces adjacent to shed homes are crucial extra living areas. Treat the outdoor spaces as additional tiny rooms.

Ladders & Built-Ins

Steep ladders with built-in storage drawers double as space savers and allow roof access for storage.

With thoughtful and savvy design, sheds can truly feel like much larger spaces that provide all the necessities and comforts of home in a pint-sized package.


Converting a storage shed into a tiny house is an affordable, achievable DIY project that allows customizing a small personal living space. By following essential steps like securing a proper foundation, insulating well, and installing utilities, old sheds can be transformed into contemporary tiny homes.

Creative tiny home design elements like lofts, multi-purpose furniture, and outdoor living areas also maximize usable space. The shed’s smaller footprint and simplicity lends itself well to minimalist living. While being sure to check your local codes first, converting sheds to dwellings offers flexibility and self-expression for crafty tiny house enthusiasts seeking alternative living spaces. With some diligent planning and perseverance through the construction process, you can join the ranks of shed-to-tiny-home converts.

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