How Much Does it Cost to Build a Guest House in the Backyard (with 4 Examples)

A guest house is one of the best ways to improve your property’s value. You can also use it as a rental unit or simply enjoy having guests over without hassle while you’re away working

A backyard guest house with a bathroom and kitchen can cost anywhere from $5,000 to $150,000. The price depends on the size of the home and how many amenities are included.

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Having more room at home might help guarantee that visitors are comfortable throughout their visit. It may also be a smart method to supplement the household’s income by renting the space or renting it out as temporary holiday lodging on sites like Airbnb. Changing a Shed or garage, acquiring a camper van or housing kit, or constructing a home outright in a backyard are all viable possibilities for guest accommodation. 

Some may ask why they should build a guest home rather than just a single room for visitors. Having a separate guest room helps homeowners to feel at ease while also offering a suitable living place for their visitors. While a visitor is coming, providing a quiet room away from the main house will help the homeowner to feel less crowded and out of their own home. The choices are available in a wide range of forms, sizes, and pricing ranges. 

Contents Table of Contents


  • Changing a Shed 
  • Garage Conversion
  • Making Use of a Camper
  • Kits for a Guest House
  • Constructing an ADU

Changing a Shed 


Changing a Shed into a living space can be a fairly cost-efficient way to create a comfortable space for guests. Sheds can come in a variety of sizes, and can also be one of the most affordable ways to provide private guest housing. One of the hardest parts in having a shed for guest housing is choosing the type of shed. They can come in a variety of colors with different building styles. Taking into account how often guests would stay and how many guests would use it at once is important to consider before purchasing a shed. 

Choosing to convert a shed into a guest room might be a cost-effective alternative. The price may vary anywhere from $6,000 to $21,000. It’s also a simple way to bring the shed into the backyard. Making an area for someone to sleep in at night would be the cheapest choice for a shed.  

Electricity and plumbing are two more possibilities that need the use of contractors. Hiring the correct professionals for plumbing and electrical will not be the most expensive part of the project, but it will add a significant amount to the budget.

In order to turn a shed into a guest house, it is also necessary to incorporate insulation. It will assist the shed to feel more like a room. If you’re looking for the best methods to heat a shed, we’ll go through the many possibilities.

Garage Conversion


Garage Conversion into a guest living space is also a perfect option. In some cases it can be around the same cost of Changing a Shed, but can also be more or less expensive in other cases. The average cost runs between $6,000 and $19,000.


The cost in Garage Conversion depends on the size of the garage and the amount of professional help that will be needed. Some important things will include adding insulation in the floor and walls. This will possibly raise the floor height in the garage depending on your floor material. This option works well for people with multiple garages or for people who do not drive.

The greatest option for converting a detached garage into a guest dwelling room is to convert it. It’s also up to the individual converting the garage to select how they want to handle the garage door and whether it will be included in the final conversion or made into a wall with a conventional door. 

Garage Conversion is a lower cost option than creating a tiny house or building an addition because it already has walls and a foundation. If you need to heat your garage, here’s our some great choices.

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Making Use of a Camper


Making Use of a Camper van as a guest living space is one of the easiest options for guest living. A camper van already has everything needed to live. A camper or RV won’t provide the full amount of space that a guest may feel like they need to truly live in a RV or camper for an extended visit. Having the guest in the main home often can be better for the guest. 

The majority of the effort goes into selecting the appropriate camper. They are available in a number of sizes and pricing ranges. A camper may cost anything from $10,000 and $300,000. When using a camper as a guest living area, one item to bear in mind is the electricity. An RV or camper may use a lot of energy, and a home might not be able to keep up. A visitor may realize that after the camper is connected to the house, they are unable to switch on the air conditioning or anything similar. 

Kits for a Guest House


Kits for a Guest House are tiny houses that can be bought almost anywhere. These are easy ways to have a home addition set up in a backyard. These kits can be around the same price as a shed as well. Most sites that sell pre-made house kits also mention installing the homes for an additional cost. These kits can range from around $5,000 to $30,000 in some cases.Tiny houses are becoming increasingly popular over the years as a way to like minimally, which makes them perfect for guest living spaces. These house kits can come with nearly everything needed. 

These home kits are available in a wide range of designs and sizes. Some resemble a log cabin, while others like a compact contemporary house. These housing kits are offered as a variety of products. They may be used as a shed, storage area, craft space, or work space in addition to being a terrific guest housing space.

Constructing an ADU


Another option for creating a guest living space is simply by going through the process of building a guest home. More time and money can go into Constructing an ADU, similar to building a full sized house. An accessory dwelling unit, ADU, is also called granny flats and can cost around $200 per square foot on the lower end of things. The overall cost can range between $40,000 to $150,000. This can be similar to the cost of some other higher-end options for guest housing. The average cost for creating an ADU is the most expensive of options, but guarantees an amazing space and accommodations for guests. 

A homeowner has numerous alternatives when it comes to creating a guest housing room in their backyard. These alternatives come in a wide range of designs and budgets, but only the homeowner and their visitors can decide which is ideal for them. Check out our other post to learn how much it costs to landscape your backyard, as well as how much it costs to construct your own fence and outdoor kitchen!


The “affordable backyard guest house” is a question that has been asked many times, and I am here to answer it. This article will show you how much it would cost to build a guest house in your back yard.

Frequently Asked Questions

What does it cost to build an outdoor guest house?

A: The cost to build an outdoor guest house varies. For example, in the area you mentioned it would cost $50 – 100 per square foot and on average a building of this size can be built for around $180 – 300 per square foot.

How much does it cost to build a 700 square foot guest house?

A: This is a difficult question to answer. It depends on the size of your guesthouse, how much it will cost per square foot and what materials you want for building it out of.

What is the cheapest type of house to build?

A: The cheapest type of house is a stick-built, single story home. These homes can be built with less than $10,000 and take about six to eight weeks to complete.

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