5 alternative housing options you can afford

Before you go, we thought you'd like these...
Before you go close icon
Housing affordability

Keeping your housing costs low is key to achieving financial freedom. Minimizing your expenses frees up more money for investments, savings, and pursuing your passions. While renting an apartment or a house is still the mainstream approach, there are other alternatives available that are more cost effective. By pursuing one of these nontraditional housing options, you can cut your expenses and break the paycheck-to-paycheck cycle.

1. Co-Living Spaces

Co-living spaces, which often resemble college dorms, are increasingly popular in places with a high cost of living, such as San Francisco. The tech capital is booming, and as a result, it is unaffordable for many; a one-bedroom can cost nearly $3500 a month.

More and more people are turning to co-living spaces as a cost-effective way to get living situations they can afford. In Silicon Valley, co-living spaces can be had for $1,000, less than half what a regular apartment would cost. In these dorm-style spaces, renters usually have a small bedroom of their own, but share the kitchen and common areas with up to a dozen other residents. Besides cost savings, these arrangements also provide people new to the area with great social opportunities and allows them to meet others in their industries.

2. Housing Co-Ops

While housing co-ops are fairly common overseas, they are just starting to gain traction in the United States. In a co-op, residents pool resources to own and manage housing together. The property can be a cluster of homes or an apartment-style building. Dwellers use their joint contributions to purchase the facilities and pay for community amenities like utilities, Wi-Fi, and lawn maintenance. The community approach cuts down costs dramatically, allowing you to save a significant amount of money compared to traditional housing.

The National Association of Housing Cooperatives has comprehensive information on how to locate a co-op, how to start one yourself, and questions to ask before handing over your hard earned money.

3. Work-Trade

Many people find success with work-trade agreements. Most common in rural areas, people can get free or cheap housing in return for a set number of labor hours, such as weeding, yard maintenance, or gardening. However, this approach is also getting more common in suburban and city areas, as even regular apartment complexes are willing to offer rent subsidies for men and women with repair or maintenance skills. You can find work-trade arrangements by searching for "work trade housing" or "rent-free exchange" on community job boards.

4. Tiny Homes

While tiny homes are increasingly popular for those looking for a cheap alternative to homeownership, these micro living spaces can also be a great avenue for renters. Many tiny home communities offer select units for rent. This approach can be a great option to cut down your costs while you save up a down payment for a home of your own, or to test out if small living is for you. Housing can cost as little as $300 a month.

RELATED: 10 cities with the most tiny homes:

10 cities with the most tiny homes
See Gallery
10 cities with the most tiny homes

10. (Tie) Dallas, Texas: 14 Tiny Houses for Sale

Not everything is bigger in Texas. In fact, tiny homes are catching on throughout the state. Dallas has the 10th highest number in the nation of tiny homes listed for sale — tied with Irving, Texas, and Nashville, Tenn.

Like in many large cities, housing costs are high in Dallas. The city has experienced one of the steepest surges in rental prices in the nation, according to the Zumper National Rent Report for August 2015. Low-price tiny homes might be offering an alternative to high-rent apartments and high-priced homes.

Related: Best (and Worst) States to Buy a Home This Spring

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

10 (Tie) Irving, Texas: 14 Tiny Houses for Sale

This suburb has as many tiny homes listed for sale as its bigger neighbor, Dallas. High housing costs could be among the reasons.

According to Zillow, monthly rent in Irving is $1,429 — $132 higher than in Dallas. And the median sale price for homes is $175,598.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

10. (Tie) Nashville, Tenn.: 14 Tiny Houses for Sale

Nashville is one the many cities where the tiny house movement is growing. In fact, a micro-home community for the homeless was recently created in Nashville, reports USA Today.

However, there are some restrictions on small homes in the city. Zoning laws allow for accessory dwelling units — small structures built on property with a primary structure — according to MusicCityTinyHouse.com. But houses on wheels can only be in areas that allow RV camping.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

9. Aurora, Colo.: 18 Tiny Houses for Sale

Housing costs in this city in the Denver metropolitan area aren't as high as in Aurora's bigger neighbor. But there are several tiny home contractors in the area, which might explain why so many tiny homes are listed for sale in Aurora.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

8. San Antonio, Texas: 21 Tiny Houses for Sale

One of the big builders of tiny homes, Tiny Texas Houses, is located about 60 miles from San Antonio — which might explain why the city has many tiny homes listed for sale.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

7. Memphis, Tenn.: 24 Tiny Houses for Sale

Small home construction company Tennessee Tiny Homes — and sister company, Tiny Happy Homes — are located just outside Memphis, which might explain the high number of small house listings in the Memphis area. In fact, one of Tennessee Tiny Homes' houses has been featured on the FYI TV series, "Tiny House Nation."

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

6. Denver: 25 Tiny Houses for Sale

Tiny homes were actually the big attraction at the recent Denver Home Show, a testament to the growing popularity of these small structures in the Mile-High City. "Tiny House Nation" has even filmed episodes in Denver, according to The Denver Post.

However, zoning laws in Denver — like in many other cities — don't favor tiny homes. But, city officials have said recently that they're open to discussing rules regarding tiny houses, reports The Denver Post.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

5. San Francisco: 26 Tiny Houses for Sale

It's well known that San Francisco is one of the most expensive cities to live in. The median home sales price is nearly $1 million, according to Zillow. With a lack of affordable housing, there is a demand for inexpensive tiny homes.

However, prospective tiny house homeowners should do their research first; San Francisco's zoning codes make it difficult to have a tiny home legally.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

4. Oakland, Calif.: 31 Tiny Houses for Sale

Housing costs also are high in San Francisco's neighbor to the East, Oakland, which recently saw rent prices surge 20 percent, according to the Zumper National Rent Report. As a result, it seems that tiny homes are growing in popularity as an affordable alternative.

But, zoning laws make it difficult to find a place to park or build a tiny home legally, too. Despite the obstacles, tiny house enthusiasts abound in Oakland. The East Bay Tiny House Enthusiasts group has more than 1,000 members.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

3. Austin, Texas: 50 Tiny Houses for Sales

Austin residents who are renting might want to consider becoming first-time homeowners — tiny house homeowners, that is. Austin was the second fastest-growing rental market in the U.S., with rental prices jumping 17 percent, according to the Zumper National Rent August 2015 Report. As a result, there's been a push in the city for more affordable housing.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

​2. Seattle: 64 Tiny Houses for Sale

The growth in tiny homes might be fueled by the high cost of housing in Seattle, which has the 10th highest median rent for one-bedroom apartments in the nation, according to Zumper, and a median home sale price of $515,561, according to Zillow.

Seattle created a village of tiny homes and opened it in early 2016 for those least able to afford the city's high housing costs: the homeless, reports local news station KIRO 7.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

1. Portland, Ore.: 87 Tiny Houses for Sale

Portland is considered to be a hotbed of tiny homes (it's also the best U.S. city for saving money). There are likely many reasons why the tiny house movement has caught on here.

For starters, the median rent is among the top 20 highest in the nation, according to the Zumper National Rent Report. And the median sale price of homes in Portland is $332,600, according to Zillow.

Portland's zoning rules are also friendlier to tiny homes compared to other areas. There also are plenty of resources for tiny home enthusiasts — including lecture series and workshops — and the Build Small, Live Large small house summit was held in Portland in 2015.

Keep Reading: 10 Tiny Homes for Retirees

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com


5. House-Sitting

Another option is to act as a serial housesitter. When people are selling their homes, the structures often go vacant for months, leaving them vulnerable to thieves and squatters. Many sellers hire housesitters to live in the home rent-free to keep the home occupied and safe while it's on the market. This idea is a great strategy to get free housing without requiring a lot of work or time. You can often find housesitting opportunities on Craigslist, Trusted Housesitters, community classifieds, or by connecting with local realtors.

With the national rent average increasing for yet another year, many people are feeling pressure regarding their budgets. Housing eats up a huge part of their income, making it difficult to meet their other obligations or pursue their goals. Alternative housing solutions offer cost effective ways to keep a roof over your head while minimizing your expenses.

Have you considered these — or other — alternative housing arrangements?

More from Wise Bread:
Should you move to a new city to reduce lifestyle costs?
9 sneaky home money pits that sap your savings
5 things you need to know when renting-to-own a home

Read Full Story

Find a New Home

Powered by Zillow

People are Reading