6 Alternative Homes To Consider If You Can't Afford To Buy A House

"Home" doesn't have to have three bedrooms and a two-car garage.

Buying a home is the biggest purchase most people will ever make. And even if you save up for years, chances are you'll still have to take on some serious debt.

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In the US, the average listing price is $293,349 (as of early August 2021), which means you'd need to save up a whopping $58,670 for a 20% down payment. You can, of course, put down a smaller down payment (or no down payment), but that usually buys you a hefty interest rate and a mortgage insurance requirement (two things that will burn you in the long run).

No matter what, buying a home guarantees that you'll be in debt for a good chunk of your life. Yay?

But there are way more affordable homes out there — you just have to be willing to go against the norm and reset your expectations.

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Warning: These affordable home are alternatives, so don't expect to find a three-bedroom house in the suburbs.

Also, keep in mind that while many alternative homes are more affordable up front, they come with their own set of challenges. For example, in some cases you'll need to check out your city's zoning and building codes to figure out where you can legally put a yurt or container home. And while finding a place to park your RV might be fairly easy, you'll need a power and waste hookup (unless you set up a solar system and empty your own sewer tanks).

1. Container Home

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Shipping containers can be used for more than transporting products around the world. The rectangular metal boxes — which typically come in two sizes, 20 feet by 8 feet (160 square feet of living space) or 40 feet by 8 feet (or 320 square feet) — offer an instant, durable structure for alternative home seekers.

Pros: You get an instant structure that's durable and fairly transportable.

Cons: You'll still need to put down a foundation, connect to utilities (unless you go off-the-grid), and will have to figure out how to keep the structure from getting too hot or cold.

A container home can cost you as little as $25,000 if you go the DIY route.

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Crystal Glynn and her fiancé built out a shipping container for around $25,000, but they did all the work themselves.

"We chose containers mostly because Matt [her fiancé] liked the idea of repurposing materials and wanted something super durable," said Glynn. 

Estimated cost: $25,000 if you DIY or $32,999 to $61,000-plus for a pre-made, pro-built container home

2. Tiny Home

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Tiny homes buck the idea that you need three bedrooms and a garage to be happy. While a typical American home is around 2,600 square feet, a tiny home is usually 400 square feet or smaller and is often on wheels to ensure transportability (you can pull them behind your car like a trailer).

Pros: You'll have everything you need without all the stuff you don't. The ones on wheels make moving your tiny home super easy.

Cons: You'll need a place to park and hook up the home so you have electricity, water, and sewer (unless you go off-the-grid).

Building a tiny home yourself could cost as little as $23,000.

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The Tiny Life notes that the average cost to build a tiny house yourself is around $23,000, but depending on the size, materials used, and your construction know-how, it could be much more.

Tiny house owner Bodē Loebel said he ended up spending around $50,000 on his tiny home, which he went with to maintain "flexibility in a transitional time of life. Lower cost. Lower commitment to place given that it can move with me."

Estimated cost: $23,000 or more if you DIY, while a pre-made tiny home is usually $81,959 or more

3. Yurt

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Yurts have been used as portable shelters by nomads in Central Asia for thousands of years, and today they're seeing a sort of resurgence among people who want a structure that is relatively easy to assemble, affordable, and portable.

 
A yurt is like a much sturdier, much larger take on a tent or teepee that can be customized with windows, a fireplace, and a deck. Typically, they offer anywhere from 115 to 700 square feet of living space.

Pros: Unlike the months or years it takes to build a traditional home, you can set up a yurt in a matter of days (usually one to five depending on the skill of your crew). Plus, yurts can be taken down, moved, and set up in another location.

Cons: You'll need to build a platform and find somewhere to put it that has an electrical, water, and sewer hookup (unless you plan to rely on solar, a compostable toilet or outhouse, and collect rainwater).  

Buying a basic yurt can cost as little as $9,500 — but it might be more realistic to budget for $27,000.

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Hansa and Jyoti Jacobs bought, built out, and lived in a yurt full time for almost five years. "We decided on the yurt as we wanted to be able to move our shelter. At the heart of it, we love the idea of the freedom that it represents. We wanted to stop renting and instead invest in our own, more long-term solution. For us, it was an active step to become more self-sufficient and sustainable," said Hansa.

Because they live in Colorado, the Jacobs upgraded their yurt with roof insulation and an exterior that could handle wind and snow, paying around $19,000. From there, Hansa estimates, "We put down approximately $4,500 on the decking, $700 on a used woodburning stove (with a flat top to cook on) and $2,000 on the triple-wall stove piping." She estimates that the overall cost was around $26,200.

Estimated cost: $9,500 for the yurt itself, but around $27,000 after you pay for a platform, decking, and any extras

4. Housing Cooperative

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A housing cooperative is a great option if you can't afford to buy a home or apartment, but still want to live in a traditional home. The setup can vary, but in general, you buy shares that give you partial ownership of a housing corporation that owns or leases real estate. So you won't own your home, but you will own a share of the org that provides you with long-term housing. 

Instead of a mortgage, you'll work to pay off the shares you bought (often called a share loan) and your portion of operating expenses — maintenance, property taxes, insurance, and utilities. 

Pros: More space than most alternative housing options, low down payments.

Cons: Finding an affordable option isn’t always easy, and you may need to meet certain low income requirements.

You can find a spot in a housing cooperative for around $110,000, but prices vary greatly by co-op, location, home size, and income.

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In Atlanta's Ansley North Cooperative, for example, you can currently buy into the co-op around $10,000 (cash is requested) with a total home or "share" cost being $110,000 or more for a two-bedroom home. Meanwhile, a 900-square-foot three-bedroom place at the Calvert Court Apartments co-op in Baltimore is currently at $148,000. On the higher end of things, a two-bedroom stand-alone home in the Amabel Pocket Neighborhood in Ithaca, New York, starts at $282,200, but includes the lot.

You can find a list of co-ops in the US here.

Estimated cost: Anywhere from $110,000 and beyond, dependent on location, home size, and income

5. RV or Van

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RVs aren't just for road-tripping retirees. There's something appealing about a fully built out — often with a kitchen and bathroom — home on wheels. You can take it and park it anywhere, and depending on what type of RV you get, it might not need any modifications or work. 

Just keep in mind that the RV spectrum is broad, covering everything from VW EuroVans to giant Class A rigs.

Pros: Great option for the not-so-handy, as the vehicle may already have everything you need to live inside it. Plus, RVs offer freedom to travel when and where you want.

Cons: Unless you plan to rely on solar and know how to empty your own sewage, you'll need to park somewhere with hookups. And don't forget about paying for gas.

An RV can cost as little as $10,000 (if you go minimal, small, and used) but will likely need some work and time spent building everything out to your liking.

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You can buy a used VW EuroVan for less than $10,000, but a souped-up Winnebago will run you upward of $300,000. Go with a model that gives you the home-like amenities you want, or you'll need to do some serious work on the vehicle.

After living the yurt life for several years, Hansa and Jyoti Jacobs gave RV living a try. Hansa says, "When looking at staying at other people's property (before we bought our own land) the common answer was that land owners would not approve of a yurt on their land, but they would be OK with an RV." While she preferred living in a yurt, she says that the RV has more built-in amenities.

Estimated cost: $10,000 (or less) to $300,000 (or more) for the vehicle, plus building out and gas costs

6. Houseboat

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Houseboat living offers up quite a few perks, including the opportunity to live literally right on the water in highly desirable neighborhoods. Plus, when the mood strikes, you can drive your home out to sea or hop from marina to marina.
Pros: Portable, waterfront living.
Cons: You'll have to pay fees to dock the boat, including covering costs for water, electricity, and sewer.

You can buy a boat for a few thousand dollars, but maintenance and build-out costs may bring that number closer to $30,000.

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The cost of a houseboat depends on what sort of base, or boat, you start with. You could buy a boat for a few thousand bucks, but the chances of it having home-like amenities that work, a nice interior, and a working motor are slim. If you're a DIY-type person, that may suit you well, but even so, a middle of the road boat build is estimated to cost around $30,000.  

Estimated cost: Around $30,000, depending on the state of your boat and how much work you're able to do yourself. Keep in mind that docking your boat in a marina can cost anywhere from a couple hundred dollars to $1,000+.

What kinds of alternative homes have you tried out or heard of? What are their pros and cons? Keep the conversation going in the comments.

And for more stories about life and money, check out the rest of our personal finance posts.