Building a Prefab Home or Turnkey Prefab ADU – Types, Cost, Pros & Cons – Part two

3. Pre-Cut Homes

Pre-cut homes are “kit” homes, such as log cabin kits or dome homes. The homes are cut to design specs in-factory, then are shipped as a kit to the building site to be constructed on-site. Some pre-cut homes are panelized homes, but not all panelized homes are pre-cut homes.

One factor that sets apart pre-cut homes from panelized homes is that pre-cut homes are often designed for the motivated home buyer who wants to construct the home on-site themselves using the materials and instructions supplied by the manufacturer. The kits come with a detailed list of instructions and parts, much like a piece of Ikea furniture. The home buyer then works to piece the home together, either alone or with the help of a general contractor.

The basic difference between a panelized home and a kit home is intention – most panelized home builders intend for the panels to be pieced together by their company on-site, while kit home builders have no such intention, unless construction is an add-on feature. Also, not all pre-cut homes come with full walls or ceilings pre-manufactured.

For instance, some pre-cut log cabin homes simply provide the pre-cut logs and framing materials ready to be assembled on-site. These tend to have the longest on-site build times, which range drastically depending on whether the home buyer completes construction him or herself, or if he or she enlists the help of a contractor. Total build time can be estimated at a minimum of five months, although it could be much longer. Appalachian Log Structures is one example of a manufacturer of log cabin pre-cut homes, while Timberline Geodesics is an example of a pre-cut dome home manufacturer.

4. Shipping Container Homes

Shipping container homes (homes made, quite literally, from industrial steel shipping containers) have made a splash in the media because of their funky and creative designs. Much like modular homes, shipping container homes can be stacked and pieced together like Legos to create homes, offices, and funky eateries, such as Container Bar in Austin, TX.

However, before you settle on shipping container building, just be aware that it’s not the same as building a prefab home. Shipping containers may be sturdy and strong, but they aren’t designed for residential use. This means you need to check your local building codes to see whether there are more restrictions for building homes using shipping containers. And unless you’re quite handy with a welding torch, you’ll likely need to hire an architect and general contractor to figure out exactly how to construct the home. These are still on the fringes of modular building, which means there are more hoops to jump through.

If you love the look and feel of shipping container homes, there are a few modular manufacturers who have redesigned the shipping container specifically for residential and commercial use. For instance, MEKA Modular Buildings Worldwide is a modular home manufacturer that uses the standards of a 20-foot shipping container to design its modular structures. For this reason, the homes are actually built to withstand worldwide shipping.

Size and Aesthetics

The sky’s the limit when it comes to prefab home size. There are tiny modular structures, such as Eco-Cottage’s 250-square-foot Starling model, boasting one bathroom and zero bedrooms, and there are sprawling, several thousand-square-foot options, such as Blu Homes’ Breezehouse, which offers up to five bedrooms and five bathrooms, and almost 3,000 square feet of space.

One reason modular homes have become so popular is because they meld nicely with the small house trend. Building a house of any size is never cheap, but those who want to keep costs and energy expenses low can opt for a tiny, pre-built modular home that requires much less in terms of foundation and utilities expenses, and can be constructed much faster than a stick-built home.

If you’re interested in building a prefab home, you really aren’t limited by aesthetic. You may just have to choose a particular type of prefab home based on your style preferences.

  • Modular Homes: Most modular homes have a sleek, modern, boxy look because the modules are built in squares or rectangles that are then stacked or arranged onsite according to the predetermined building plans. However, some modular builds are combined with panelized walls or roofing that changes the boxy appearance into almost any style of home.

  • Panelized Homes: Panelized homes can be built in almost any style or aesthetic according to the home buyer’s preference. Because the homes are built in panels, they can be constructed on-site in a variety of home styles with few limitations.

  • Pre-Cut Homes: Particularly considering dome homes and log cabin kits, pre-cut homes are often a specific aesthetic. These aesthetics vary depending on the type of kit you choose. There are actually a wide variety of aesthetics to choose from.

Some manufacturers combine different types of prefab building methods to open up the aesthetic possibilities. For example, Westchester Modular Homes builds a home’s rooms and structure using pre-constructed rectangular modules, but then uses panelized walls and roof trusses to change the style and appearance of the home.

Home Package Inclusions

When considering a prefab home, it’s very important to pay close attention to what is and isn’t included in the home package you select. For instance, modular homes are often (but not always) sold with a full package of fixtures, appliances, windows, and flooring, while pre-cut and panelized homes often consist just of the materials necessary for a wall, roof, or frame. These walls and roofs may or may not include insulation, wiring for electrical, windows, doors, or even drywall. In some cases you can pay additional for the completed wall structure, but in most cases you have to work with an onsite contractor to help you complete and finish your home, including the finishings of the roof and walls.

As an example of what you can expect to be included in each type of structure, I’ll use Stillwater Dwellings. The company offers modular and panelized prefab options, making them a great resource for comparison.

1. Modular Dwelling

With a Stillwater modular build, a buyer might expect to receive:

  • Architectural components, the building’s blueprints and design

  • Structural engineering, to ensure the structural integrity of your home

  • State building permit

  • Floor structure (not including foundation)

  • Roofing

  • Lighting fixtures

  • Plumbing fixtures

  • Windows

  • Siding

  • Cabinets and trim

  • Flooring

  • Countertops

  • Appliances

  • Smart home automation system, to remotely manage electricity use, lighting, and security systems

  • Installation of home on prepared foundation

There are upgrade and personalization options available, but these are somewhat limited. Essentially, you choose one of the company’s three finish packages (appliances and fixtures) to achieve the interior aesthetic you’re going for, and you let them do the work.

Some other modular home builders, such as Blu Homes, do offer a greater variety of finishing packages, enabling you more personalization of your home’s finished appearance, but you’re still fairly limited relative to what you can buy on your own. You can’t simply choose a Wolf appliance package if the company doesn’t offer it – you’d either have to opt not to receive the appliances in a package, or you’d have to choose from the appliances the company offers.

2. Panelized Prefab

Stillwater’s panelized prefab homes, as well as other panelized home builders, have fewer inclusions, which can be viewed as positive or negative. If you want more control over the final aesthetic of your home, picking and choosing appliances and fixtures yourself, then panelized construction is your best bet. But if you’re more concerned with a quick build, and you just want to choose a design package that’s already been selected, then modular builds are probably best.

With a panelized home from Stillwater Dwellings, you receive:

  • All major framing components (walls and roof)

  • Architecture – the blueprints and design

  • Structural engineering – ensuring the panels and their placement on your foundation are structurally sound

  • State building permit

What’s Typically Not Included

Don’t get lulled into a happy sleep with the phrase “all inclusive” when it comes to buying a modular home – it can be misleading. Understand that the base price of a prefab home doesn’t account for many of the expenses required to build a home.

You must be prepared to pay additional expenses, which may include:

  • The land the house will be built on

  • Soils testing

  • Site survey

  • Utility hookups, if necessary (water, waste water or septic, electrical, cable)

  • The prepared foundation for the home to be built on (concrete slab or pier and beam framing)

  • Landscaping

  • Driveways and sidewalks

  • Garage or carport (may be available from some manufacturers)

  • A local contractor or builder to finish the interior of a panelized or pre-cut home

These expenses are incredibly variable based on location, size of home, and even municipal requirements or personal preference. For instance, if you’re building in the country, you may not need or want much in the way of outdoor landscaping. However, if you’re building in the city – or in a neighborhood with strict home owners’ association standards – you may be required to put in some kind of landscaping. That said you can expect to spend possibly tens of thousands on permits, fees, foundation, and utility hookups – especially if your property isn’t served by a local sewer and water system and you’ll need to put in a septic system and well.

Before committing to a particular home or manufacturer, make sure you speak extensively to the company about what it provides, and what you’re be expected to manage separately. Also, when comparing manufacturers, get specific information about what each company provides so you’re positive you’re comparing apples to apples.

For instance, some builders may offer a more turnkey service, including site prep, soils testing, and foundation preparation. You’d hate to rule out a turnkey service just for being more expensive on the surface, when in reality the total cost differences might be negligible.

Options and Upgrades

In addition to the modular home finishes that come standard in a preselected home build, it’s important to understand that there may be a selection of upgrades to choose from for an additional price. For instance, pieceHomes offers a single finish package, but you can upgrade items, such as opting for bamboo floors instead of cork floors.

Other modular home manufacturers may have more options when it comes to customizing your final project. To get an idea of the types of options or upgrades you may be able to make, check out Blu Homes’ configurator. It enables you to first select a home based on pricing, size, and style; then, once you’ve selected the floor plan you like, you can make alterations to the color finishes, the doors, baseboards, appliance packages, and more.

While Blu Homes has many more options than pieceHomes, you still don’t have as many options as you would have if you were working with a designer or simply shopping online for the perfect finishing touches. Also, remember that many of the options and upgrades come at an additional price – so if you’re working within a tight budget, be very careful about selecting upgrades.


One of the major selling points of buying a prefab home is that, generally speaking, they’re less expensive to build than a stick-built home. Modular Homeowners estimates that the average cost per square foot of a completed home to be built – not including the cost of land (including taxes or fees), the setup of utilities, or exterior touches (driveways, landscaping, and porches) – is $110. However, many modular home builders command a price much higher than that due to their designer finishes – closer to the $220 per square foot range. So to build a 250-square-foot home, you could expect to pay between $27,500 and $55,000, and if you want to build a 2,500-square-foot home, you could expect to pay between $275,000 and $550,000, not including the cost of land, site costs, or taxes.

There are a couple reasons why prefab homes tend to cost less than site-built homes:

  • Less Waste. When you have several groups of contractors delivering materials to a site and building a house on location, there’s a lot of waste created in the form of excess materials. When a home is built in panels or modules in a factory, the system can be improved and waste can be reduced.

  • Less Labor and Time. During a traditional build, multiple groups of subcontractors (such as plumbers, electricians, painters, and framers) all come out separately to do their designated work. This work is often delayed or hampered by the work of other subcontractors. When modules or panels are built in-factory, the labor can be more effectively managed so that the work is done quickly and efficiently.

Also, buying a modular prefab home is essentially a “one-stop shop.” While not all finishes are low-cost, you may still get a deal because the modular home builder is buying product in bulk and passing the savings on to the buyer. You also save the stress and time it takes to painstakingly pick out your own appliances and fixtures.

Overall, Modular Homeowners states that you can expect to save approximately 10% to 20% on the total cost of building a modular home as compared to building a stick-built home. These cost savings are expected to be less for a panelized home, as the construction takes longer and you still have to hire a contractor to complete the home once it’s built on-site.


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