There’s no denying that the housing market is incredibly hard to get into, especially for first-time buyers. From sky-high prices to limited availability, it can be frustrating. Fortunately, exploring alternative housing options can provide solutions for those who want to get into the market.
Tiny Homes
Tiny homes have become a popular alternative to traditional housing. Not only are they green and affordable, but they’re trendy too! They can also be easily customized to fit your lifestyle. Let’s explore the cost first.
The average price for a professional construction tiny home (that is about 206 square feet) is about $60,000. This is far more affordable compared to the median price of a home in the U.S., which is currently over $400, 000!1 What’s more, electricity is a lot cheaper, as it costs less to heat, cool, and power a smaller space. The average monthly costs can be as low as $600 (but sometimes up to $1000) for utilities and renting a lot or plot of land.
Another major benefit of owning a tiny home is they’re customizable. With the rise in popularity, many tiny home manufacturers are popping up, making them more accessible than ever! It’s important to research various tiny home manufacturers and compare their features and prices to find the right fit for you.
Container Homes
A shipping container is a big box made of steel that is traditionally used for shipping goods across long distances. They’re also used for storage. However, people are also using them to make modern homes, which could be a cost-effective alternative to a traditional stick home. 2
A container home is a living space made from shipping containers. Sometimes people will weld more than one container together to build a wider or taller home. There are several benefits to choosing a container home, including:
- Durability: Shipping containers are made of corrugated Corten steel that can withstand extreme weather conditions. They can also be insulted to ensure you stay warm and cool during all seasons.
- Quick construction: Construction is a lot faster than a traditional home, mostly because these homes are smaller but also because the container structure has already been manufactured. You’ll just need to make some adjustments to make it livable.
- Mobility: Due to their durability and steel frame, container homes are portable, allowing you to move them if needed.
- Affordable: Container homes are more affordable because they’re smaller than traditional homes and you’ll need fewer materials, but also because you’re not building the home from scratch.
- Unique designs and freedom to customize: Shipping containers can be used to build modern, unique homes. There are many fun and interesting ways to customize your container home!
Manufactured Homes
Previously known as mobile homes, manufactured homes have come a long way. Gone are the days of old, outdated, and embarrassing mobile homes. Even though they’re a lot more affordable than traditional homes, many come with modern features like stainless steel appliances, walk-in closets, and even fireplaces!
Manufactured homes are unique in that they’re built in a factory and moved to the location you choose to live.3 The cost of a manufactured home will vary based on the manufacturer as well as the size. Fortunately, there are options for single people, couples, and even families from single, double, or triple-wide floor plans. In addition to the cost of the build, you’ll also need to buy or rent the land your home will sit on. However, these costs will still total far less than the build of a traditional home.
Rent-to-Own
If you don’t currently have the funds or credit score to secure a mortgage, then a rent-to-own agreement might be a good option for you. Rent-to-own homes are homes that include a clause in the rental agreement that gives you the option to buy the home after a certain period of time. What’s more, a portion of the monthly rental payments typically count towards the down payment.4
It’s also important to be aware of nonrefundable upfront fees. In a rent-to-own agreement, the buyer (you) is required to pay the seller a one-time (often nonrefundable) fee. This fee is sometimes called option consideration, option fee, or option money. This fee is what gives you the option to buy at the end of the agreement. It typically ranges from one to five percent of the purchase price.
Rent-to-own is a great option for someone who desires to own a home but is not quite ready financially. It’s important to work with a reputable real estate attorney to review the agreement to ensure you fully understand what you’re signing up for.
Co-Housing Communities
Co-housing refers to a small (intentional) community of private homes. They’re typically gathered around a shared space, such as a recreational area. While you may not have heard of this alternative housing option, it’s actually been around since the 1960s. As far as we know, Denmark created this concept as a means to create villages to aid in raising all the community children.
There are several benefits of cohousing to consider.5 Some of these include:
- Affordability: The legal structure is usually a homeowners association or housing cooperative. Sharing land and living spaces makes the cost of living a lot more affordable.
- Amenities: Urban co-housing communities often feature luxury amenities, such as gourmet kitchens, fitness areas, and maid services.
- Sense of Community: One of the biggest benefits is the sense of community. This can be particularly beneficial for individuals who work a lot and don’t have time to meet people, or if you’re new to the area.
Shared Homeownership
If you really want to own a home but aren’t quite financially capable, then you can also consider shared home ownership. Co-ownership refers to when two (or more) people who are not married share ownership of a home. This may be with a friend or relative, or a combination.6
Essentially, each co-owner has a stake in the property and will have joint ownership over roles, rights, and responsibilities. It can be helpful to think of it as a business partnership. Shared home ownership is a popular option among multi-generational families, such as a young family buying a home with their parents.
Shared home ownership can be a great way to get into the housing market but there are many factors to consider. When deciding to co-own a home with other parties, it’s important to carefully consider everything it entails to ensure all parties have a full understanding of what they’re signing up for.
Learn More About Alternative Housing Options
Getting into the housing market can be stressful but you do have other options than traditional stick homes. Whether you like the idea of affordable tiny homes or the convenience of a manufactured home, there is an alternative housing option for you! Each one offers unique benefits and requires careful consideration, so keep learning. Homeownership is within reach!