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Turning a Shed Into a Tiny Home: What You Need to Know

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Converting a storage shed into a tiny home may seem like a strange concept, but shed houses are becoming mega popular as people seek more sustainable and affordable lifestyles. However, there are a large number of considerations before embarking on this process, such as configurations, permitting, plumbing/electrical installation, and more. 


Developing a shed house is often a cheaper and more customizable alternative to directly purchasing a tiny home, but it does mean you’ll have to more closely familiarize yourself with the building process. In this in-depth guide, we’ll direct you through all the considerations for turning your storage shed into a small residential structure.

Get the right permits

In order to qualify your shed as a habitable structure, you’ll need to ensure that it is in accordance with local building codes and zoning regulations. This means that it may have to maintain a minimum square footage, have sufficient doors/windows for fire safety, and receive approval for plumbing/electrical upgrades. 

Different counties also have varying requirements for minimum setbacks – this refers to the distance your structure must maintain from property lines. On average, the minimum setback is about 15 feet, so depending on the square footage of your lot, you may want to carefully consider the shed sizes available to you.

If your habitable shed structure is going to serve as an Accessory Dwelling Unit (ADU), it must also maintain a certain distance from your main residential structure for compliance with fire safety codes.

Decide on a layout 

First thing’s first, you must decide on the overall desired size, layout, and placement of your shed house. We’ve covered some requirements for placement in the previous section, but keep in mind that an even plot of land can go a long way for blocking, anchoring, and configuring a crawl space for adding utilities. 

The structure needs to be blocked and anchored on a solid foundation or sheetrock, otherwise it will crack as it settles. As a result, doors jams and window opens will become out of square, making them difficult to open and close.

Beyond this, a popular tiny home configuration is that of a two-story shed house. These two-story structures are favorable because they can provide maximum square footage with minimal footprint, so if you’re limited by your setback lines, opting for a two-story structure can still help you get the most amount of space.

Two-story shed house from Keen's Buildings.

A two-story shed house (occasionally referred to as a barndominium) is engineered with cost-savings in mind. What’s more, this structure is excellent for serving as a mother-in-law suite or ADU.

At Keen’s Buildings, we’ll construct the shell of your shed house and leave the interior up to your imagination. Whether you decide to keep an open floor plan or hire a contractor to add interior walls, the sky’s the limit.

Install insulation 

Proper insulation is what truly separates a habitable shed from a storage shed. Where insulation requirements for storage sheds are pretty minimal – so long as it’s enough to prevent your tools from rusting and moisture from getting in – it becomes absolutely critical in a residential structure. 

Spray foam insulation is a very simple DIY yet cost-effective solution. It allows you to cover all the cracks and crevices while still deterring moisture, keeping pests out, reducing noise, and actually enhancing structural integrity. 

Your floors need to be insulated as well. On standard storage sheds, the floors don’t come insulated, so you’ll have to elevate the structure for residential applications in order to do this.

Set up ventilation

Now that you’ve got insulation covered, you need to think about ventilation as well. Combatting moisture doesn’t stop there. You’ll either have to consistently run a dehumidifier in wet or humid climates, or you’ll need to seek out an HVAC unit with a built-in dehumidifier.

Many shed house owners also opt to install ceiling fans, but this means you must account for this by choosing the correct wall height. This also goes for overhead light. A minimum side wall/base plate height of 8 feet is recommended for these overhead elements.

Configure plumbing, electrical, and sewage

This is where things tend to get tricky. You’ll need plumbing, electrical, and sewage to make this a habitable space, but this infrastructure doesn’t yet exist with a shed house. The first thing to do is create a crawl space by elevating your tiny shed home in order to make room for running piping and electrical lines.

You will want to install a well and septic tank for plumbing and sewage purposes, but keep in mind that your structure often has to maintain a minimum distance from these systems.

Consider floors, roofing, and walls

Durability is everything. Think about how critical your anchoring diagram is for storms and wind.  Look into local weathering codes and see if there are minimum requirements for wind load rating. All Keen’s Buildings shed structures are wind load rated for gusts up to 160 mph. Your local climate will affect the materials you choose to use. 

For example, when selecting a roofing material, you’ll likely have to choose between steel and aluminum. While an aluminum roof is superior for heat disbursement – as it reflects heat off the structure, therefore keeping it cooler inside – it is thinner and more pliable. This means you cannot place a structure with an aluminum roof underneath a tree, otherwise falling debris and branches during a storm can damage it. Meanwhile, a steel roof is sturdier, but more likely to trap heat inside. If you opt for an aluminum roof, you’ll need to reinforce it for structural integrity.

Pressure treated floors are also a must in order to ensure the wood does not decompose. If you order your new shed house with pressure treated floors, make sure you don’t plan to move in right away. It can take at least two weeks for pressure treatment chemicals to dry, but you can ventilate the structure to expedite the process. If you do not wait for the floors to dry completely, then paint will not stick.

On the topic of ventilation, you’ll need to have sufficient openings for the sake of fire safety. Local building codes may require front doors, back doors, and windows to even be a certain size (width/height) for optimal fire escape accessibility.

One universally agreed upon material is wood for the exterior of your shed house. Though metal is recommended for storage sheds, wood will better serve you for the longevity and aesthetics of your tiny home.

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