8 Alternative Housing Ideas That Are Cheaper Than Buying a Traditional Home
Do you dream of owning a home one day? Or, maybe you’d just love to rent a nice, relatively spacious apartment in a desirable neighborhood. Both of those things are becoming increasingly out of reach for many people. In fact, it’s bringing alternative housing options to the forefront for those who don’t see traditional housing as viable options anytime soon.
The median home price in the U.S. is around $350,000 — that’s $100,000 more than it was just five years ago. Rent costs vary widely by location, but the latest Consumer Price Index from the Bureau of Labor Statistics show the cost of shelter has gone up 3.7% just in the last year.
So, what can you do when your rent goes up too high and you can’t afford a $350,000 house? We have some alternative housing options that could be the right path for you. We’ll talk about living in a tiny house, an RV, houseboat, shipping container and much more. All of which will likely get you a much lower price tag.
What Is Alternative Housing? Why It’s on the Rise
Alternative housing describes your options outside of traditional living arrangements, like buying homes or renting apartments. We already know that rent and mortgages are tough to afford. Inflation has made everyday items more expensive, and student loan and credit card debt are at some of the highest levels they’ve ever been. Who can save for a down payment among all those financial burdens?
Now with remote work flexibility and more cheap housing options, people are looking elsewhere. Several of these options have even more benefits than just being cheaper. People sometimes enjoy downsizing, like they would with a tiny home, or having a flexible living arrangement, like with an RV.
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1. Tiny Homes: Small Footprint, Big Savings
The median square footage of a single-family home was 2,417 square feet at the end of 2024. Tiny homes, in comparison, are typically less than a quarter of that size. So this option works well for people who don’t need a lot of space or stuff.
Though the living space is smaller, the potential to save is larger. In addition to spending less on the home itself, tiny house dwellers often pay less in utilities, and they buy less things because of the limited space. You also won’t spend as much on maintenance because there’s less to maintain.
Tiny homes typically cost anywhere between $30,000 and $60,000. That’s a whole lot less than the cost of the average home.
2. Houseboats: Live on the Water for Less
These certainly could cost as much as a house if you go for a luxury option. But there are affordable houseboats out there, especially if you buy used. This site has decent houseboats for around $10,000. Some, however, get up to a couple hundred thousand.
In addition to spending less on the boat itself, you won’t have to pay property taxes. Though you will likely have to pay a fee for docking. These vary based on location. You could expect to spend around $2,000 to $4,000 a year. There’s also maintenance costs just like any other abode, but it’s significantly less than a house.
If you love being on the water and study up on your boat maintenance knowledge, this could be a great option. Keep in mind the risk of extreme weather. You’ll have to have a plan for intense storms or hurricanes.
3. RV Living: Mobility Meets Affordability
Experience a nomadic lifestyle by living in an RV. These tiny houses on wheels are a fraction of the size of a typical home but also a fraction of the cost. It will cost around $20,000 to potentially over $100,000 for the RV itself, depending on the kind you buy. Don’t forget to factor in the rent at a campground or RV park if you don’t own land to park on. Those fees run around $500 to about $1,200. Also, the cost of gas will be a big factor, especially if you plan to move around a lot.
Campground fees may sting a little, but you’re not paying off a mortgage, and you’re mobile. That means you can go to a different campground if you wish. That’s also why this option is great for people who have flexible or remote jobs and love to travel.
4. Shipping Container Homes: Durable and Budget-Friendly
This alternative housing option will require you to have land if you plan to build it yourself. This could be someone else’s land who is allowing you to live on it or land you’ve purchased. That would be expensive, however, it’s still a lot more cost effective than buying land then building a traditional home.
It will be crucial to check local regulations where you plan to build. While there might not be any state ban on them where you live, many local municipalities have rules around them.
If you are in the clear to build, these homes cost around $20,000 to $50,000, but of course could get more expensive depending on the size and features. It’s a lot of money, but again, you’re avoiding a potentially decades-long mortgage. It also is a much quicker build than a traditional home and great for people who want to be off the grid.
6. Yurts: Minimalist Living With Low Overhead
Yurts are circular spaces that you might compare to a glamping tent, but it isn’t really a tent. They were commonly used by nomadic people in Central Asia. They’re durable and can withstand some pretty harsh weather, if built correctly. The considerations are similar to shipping containers. You need the land to build it on and you need to make sure that it’s allowed and you have the right permits.
If that is the case, expect your yurt to cost anywhere from about $10,000 to $30,000. There are definitely options that are much cheaper or much more expensive. However, the cheaper it is, the more basic your accommodations will be.
7. Barndominiums: A Rustic and Spacious Option
Barndominiums are like shipping containers on steroids. So if you’re looking for something more that’s not quite a full-on traditional house, here is your middle option.
The word itself combines barn and condominium. So you’re living in a luxury barn meant for people. They’re typically framed with steel or metal and are great for those who love an open floor plan, because this is about as open as it gets.
These will run you about $130,000 to $320,000, depending on customization and location. You will need to check the local regulations around these as well. Also, make sure it can stand up to the climate in your area. If you experience a lot of snow or hurricanes, you’ll need to consider that.
8. Coliving: Share the Costs, Share the Space
Imagine living with a bunch of strangers for the sake of saving money on housing. That might cause you to picture your college days of living in a dorm, and you’re not that far off.
Coliving is an alternative housing concept where multiple, unrelated individuals live under the same roof sharing common space like living rooms and kitchens while enjoying private bedrooms … and private bathrooms, if they’re lucky.
While the living arrangement is not new, it has gained popularity in recent years among cash-strapped young professionals in urban areas. But coliving can also be found outside major metropolitan cores.
It’s more or less just getting a lot of roommates. It can seriously cut down on costs when you’re sharing bills. And if you and your cohabitants don’t mind sharing the space, then why not?
The biggest downside (outside of things getting a little crowded) is the responsibility that can come with organizing it. How to split everything, from bills to chores and upkeep, will need to be thoroughly planned out.
Is Alternative Housing Right for You?
Buying and renting houses and apartments aren’t the only options when it comes to your living situation. There are several alternative housing options to choose from. Although cost is what would send a lot of people in that direction, there are plenty of other benefits. It could be a quicker path to housing or be a more flexible way of living. It could also help you live a more minimalist lifestyle, if that’s what you’re looking for.
The most important things are to consider any additional costs that could cut into your savings, such as paying docking fees on a house boat, and any local rules around that type of housing. And make sure you’re ready for a potentially drastic change in how you’re currently living. Once you’ve done the math and read the rules, you’re on your way to living in alternative housing.
FAQs: Alternative Housing
The most affordable options upfront tend to be tiny homes and yurts, often costing under $30,000. However, the best value depends on your location, long-term needs and whether you already own land.
Some options, like barndominiums, qualify for specialized loans or FHA financing. But options like shipping containers and tiny homes may require personal loans or cash.
No. Zoning laws and building codes vary widely. Always check local regulations before purchasing or building any alternative housing structure.
It depends on lifestyle preferences, but many people live in RVs or vans full time. It requires regular maintenance, a plan for mail and health care, and comfort with a smaller space.
Savings vary, but many options cut your housing expenses by 50–70% compared to a traditional mortgage. Ongoing savings also come from lower utility bills, maintenance costs and property taxes.
Nicole Dow is a senior writer at The Penny Hoarder. Freelancer Dennis Lynch contributed to this report.
