Can’t Afford a House? Try One of These Low-Cost Alternatives

by Jessica Sommerfield · 18 comments

To this day, many people pursue the American Dream of owning a home.

But if you can’t afford to buy a house, have lost your home, or are unable to sell without a loss, you’re probably desperate for lower-cost housing options.

Here are a few alternatives to the traditional American Dream:

4 Low-Cost Housing Ideas

1. Room Rentals

If you already own a large home and have some extra space, this might be a good way to get caught up on your mortgage payments and other financial obligations. It can be challenging to open your doors to a stranger, but as long as you utilize a good screening process, this arrangement works well for many people. Young adults traveling for work or internships are often looking for these type of living arrangements, because they don’t require a lengthy lease and are cheaper than renting an entire apartment.

2. Co-ops & Rental Management

Co-ops are growing in popularity. With a co-op, you share property and maintenance responsibilities with other owners. They’re supposedly cheaper than condos, so they’re ideal for people who want ownership rights for a smaller price. Of course, much depends on which one you choose and who your co-op partners are.

Most people consider renting only as a last resort or in a temporary situation, but have you ever considered managing a rental establishment? Many owners allow managers to live in one of their apartments rent-free! Your job will require you to be available for renters’ needs at all hours of the day, but you can save a considerable amount of money to put towards eliminating debt or purchasing a home.

3. R.V. Living

Many retirees are now taking to the roads in their recreational vehicles, fed up with other expensive housing options. This type of living is for the adventurous at heart, as it allows you the freedom to pick up and go almost anywhere you want. Beyond the initial expense of purchasing an RV and its routine maintenance, you’ll need to pay RV park fees, which are usually cheap. (Though some places you stop will be free.)

You don’t have to be retired or on the road to live in a mobile home, however; MoneyNing contributor Alexa Mason purchased a trailer to use as inexpensive housing.

4. Tiny Homes

I recently saw an advertisement for a compact house you could build for $10,000-$15,000. If you browse the Internet, you’ll find dozens of webpages dedicated to the design and sale of these “tiny houses.” Most of them are ultra-modern, creatively designed to utilize every square foot, and surprisingly spacious on the inside. Some of the homes are permanent, while others can be mobile. This trend is becoming popular as people become disillusioned with the housing market, and also have the desire to live more simply than in the past.

What other low-cost housing ideas do you have? Have you tried any of the options above?

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{ read the comments below or add one }

  • Reelika @Financially Wise On Heels says:

    Tiny houses have become really popular. I see those on HGTV all the time and they look very nice and cute. Probably a family with kids wouldn’t really fit there, but it might be a great option for either young professionals or retirement age people. I guess you have to consider the weather as well.

  • Bert says:

    With regards to Mike, diesel powered motorhomes will retain real value for a decade or so. He is correct in his appraisal for other types of RV’s. The trick here is to shop for a unit at least five years old, preferably ten. As many RV’s are used on a limited basis, clean and excellent buys are out there. My current motorhome, a gasoline V-10, drives like new. It is twelve years old, and was purchased with 31,000 highway miles, at a price of $13,000. After new rubber and some upgrades, I added another 3k. My current lot rent is $135, including all utilities, with the only caveat being I must heat with my own propane when it is cold. I would not recommend diesel unless one plans to drive a couple of million miles in it. As long as one can adjust to living lean, this lifestyle has no comparison for value and fun.

  • Grinch says:

    I have looked at tiny homes for awhile now. I am impressed by the uses, such as a home for parents or returning kids. When a tiny home is built on a trailer frame, you avoid a building permit and associated fees. There certainly some great designs out there.

  • Mike says:

    Just be careful with RV’s since they depreciate in value. Unfortunately someone who buys an RV just because they can’t afford anything else probably also can’t afford the few thousand dollar depreciation hit they will take too.

  • lana says:

    I’ve thought about downsizing but it would cost us tens of thousands to sell and buy and then incur capital gains.

    A house keeper would be cheaper.

    • David @ says:

      Remember that you get $250k for individuals, and $500k for couples of tax free gains from a house sale as long as you lived in it the whole time within the last 5 years.

      With enough time, downsizing could really make sense!

  • Cindi says:

    I’m doing 2 of the four choices. #4 I downsized into a smallish home (from 9 rooms to 4) and #3, we have a smallish RV to travel in (only 17 feet). Going smallish keeps costs down AND makes things more affordable, thus possible.

    • David @ says:

      It must’ve been hard to find everybody with 9 rooms! Good for you to downsize since it’s not easy to make the move!

  • debt debs says:

    I would be a perfect candidate for a tiny home. I used to love living in a hotel room for three weeks on end when I used to travel for work. Consequently, now I spend most of my time in my bedroom. Maybe I just need a bachelor apartment?

    Regarding renting out rooms, we rent out our basement to a coop student and it works out great.

    • David @ says:

      You would be debs, and you should give it a shot now! Otherwise you would get used to the bigger spaces and won’t want to go back as much!

  • Kate @ Money Propeller says:

    I love the idea of living in a tiny home, as long as the surroundings are clean as well as the house, then it would be completely perfect! I can even see myself living in that kind of home with my family.

    • David @ says:

      I would second that, but I also want the space to be nicely furnished. As long as it looks nice inside, then I would be happy to live in there I believe.

      It would be hard to convince my wife and kids, but I want to at least give it a try.

  • Kevin @FinanceFoes says:

    Some of the tiny homes are wild! I have seen the same documentary. It’s amazing how they utilize every square inch. It makes you remind yourself of what “shelter” actually consists of as a necessity and how foolish people can be spending their money on real estate.

    • David @ says:

      Can you imagine how our finances would be as a nation if all of us adopted your view on housing? Real estate would plummet, making it much more affordable for everybody and we would keep so much of our hard earned dollars to fund everything else too!

  • Brenda @SuperMoney says:

    On Netflix, there’s a documentary called “Tiny” about tiny homes. Not too long, a bit bizarre actually, but it shows so many different kinds of tiny homes and why people live in them. Many to try something new, to make a change. Others to cut back and minimize. But every single one of them is saving heaps of money on living expenses!

    • David @ says:

      It’s really amazing how we convince ourselves that we NEED so much space, just so we can be out working long hours everyday to pay for it!

      Perhaps one day we will move back to smaller houses, and save ourselves some money in the meantime.

  • Hannah @ Wise Dollar says:

    I have never tried one of the options above yet because we are living with my parent’s house. If so, I would do the last option, the tiny homes, it could be very beneficial. And since, we don’t need a huge house too. I believe that as long as you live with your own family no matter how small your house, it will still be full of happiness. 🙂

    • David @ says:

      Kudos to you for living with family, and especially for loving it! Being able to spend more time with those close to you is really underrated, and as you know, the savings are huge too!

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