The rent is too darn high, and it’s hard to catch a break. The same can be said about paying the mortgage each month.
With housing costs eating up about a third of many household budgets, it’s typically the highest single expense Americans face each month. Still, you’ve got to have a roof over your head.
Here are six alternative housing options with the potential to significantly cut costs while keeping you comfortably sheltered.
Imagine living with a bunch of strangers for the sake of saving money on housing.
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 millennials in urban areas. But coliving can also be found outside major metropolitan cores.
Jillian Warwick moved into a St. Petersburg, Florida, coliving space this summer. She pays $600 in a city where rent on a studio apartment can exceed $1,200. Her monthly payment includes utilities and high-speed internet, and the home includes free laundry access and is stocked with complimentary coffee and household supplies.
2. Tiny House
According to the National Association of Home Builders, a median new single-family home was 2,355 square feet in the beginning of 2019. Tiny homes, in comparison, are typically less than a quarter of that size.
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.
Andrew and Gabriella Morrison and their two kids cut roughly $300 in monthly expenses (or about $3,600 a year) from their budget by switching to tiny house living. Joel Weber built his own tiny home while in college. After spending between $13,000 and $16,000 for the build, his combined cost to park his home and pay for utilities came to about $300 a month — almost a third of the cost of living in a dorm.
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.
Cortni Armstrong ended up moving to an RV five years ago. Her living situation was the catalyst to a new career: renovating and flipping RVs. Armstrong has sold remodeled RVs in the $30,000 range — which can sometimes be a mere down payment for a traditional home.
Like with tiny house living, don’t forget to factor in the rent at a campground or RV park if you don’t own land to park on.
Similar to an RV but in a more unique package, a skoolie is a decommissioned school bus that has been converted into a home on wheels. It can also be less expensive than an RV.
Phil Risher bought a bus for $5,000 and spent $2,000 transforming it into his living quarters for a 95-day trip around the country. He and his father took on the renovation themselves using a free layout from Pinterest and tips from YouTube videos.
5. Off Grid
Ever want to distant yourself from the constructs of modern society? Off-grid living is an alternative housing option that requires you to be self-sustaining. You rely on independent power and water sources rather than municipal services. You grow or hunt your food rather than shopping at a grocery store.
Tyler and Ashley Selden and their daughter Sydney maintain an off-grid lifestyle in Alaska. Though it’s a lifestyle choice rather than a financial one, they estimate they save up to $10,000 a year just by growing, fishing or hunting their own food.
6. House Hacking
House hacking, in a nutshell, is buying property and recruiting others to help you pay the mortgage.
Riley Adams and his girlfriend (now wife) lived in a three-unit residential property in New Orleans cost-free for three years. Their house-hacking arrangement involved renting one unit out and having Airbnb guests in the other, which covered the mortgage.
House hacking is also possible without living in a multiunit property. Kristine Dowhan became an Airbnb host, listing three bedrooms of her four-bedroom home to afford her mortgage. She even made a $1,200 profit her first year renting out rooms.
Even if you don’t have extra bedrooms in your home, you can get creative with the space you do have. John Potter rented out a tent in his backyard on Airbnb. Talk about thinking outside the box!
Nicole Dow is a senior writer at The Penny Hoarder.