Paying for housing, whether it’s rent or a mortgage, can be very challenging as it takes up a significant portion of many household budgets, usually more than a third. On top of that, transportation and food expenses make up around another third, making it very difficult for many Americans to catch a break. Despite these challenges, having a place to live is a basic necessity.
These six housing options have the potential to reduce costs while providing you with comfortable shelter significantly.
If you want to save money on housing, you might consider living with strangers. It can be similar to living in a dorm during college.
Coliving is a housing concept where several individuals, who may not know each other beforehand, live together in a shared space. They have access to common areas like living rooms and kitchens but also have their own private bedrooms. Additionally, some coliving spaces may offer private bathrooms to residents.
Although it’s not a new concept, coliving has become more popular among financially-strained millennials living in cities. However, coliving options are also available in non-urban areas like Jersey City and Naples, Florida.
In the Summer of 2019, Jillian Warwick started living in a coliving space in St. Petersburg, Florida. She pays $600 per month, which includes utilities and high-speed internet. This is a good deal considering that rent for a studio apartment in the city can exceed $1,200. The coliving space also features complimentary laundry access and free coffee and household supplies.
2. Tiny House
The National Association of Home Builders reported that as of the end of 2022, the median size of a new single-family home was 2,276 square feet. In contrast, tiny homes are generally less than 25% of that size.
Although tiny houses have less living space, they have greater potential for cost savings. Not only do they cost less as a home themselves, but those who reside in tiny houses often have lower utility bills and buy fewer items due to the limited space.
The Morrisons, along with their two children, saved about $300 a month (or $3,600 annually) by shifting to tiny home living. Joel Weber constructed his own tiny house during his college days, and spent around $13,000 to $16,000 for the construction. The total expenses for parking his home and utilities came out to about $300 a month, which is nearly one-third the cost of living in a dorm.
You can live a nomadic lifestyle by residing in an RV, which is a tiny house on wheels that is much cheaper than a regular home and takes up less space.
In 2014, Cortni Armstrong moved into an RV which led her to a new career – renovating and flipping RVs. As a result, she has sold remodeled RVs for around $30,000, which is often only a small fraction of a traditional home’s down payment.
If you plan on living in a tiny house, remember to consider the cost of renting a spot in a campground or RV park if you don’t have land of your own to park on.
A skoolie is a retired school bus that has been transformed into a mobile home and is similar to an RV, but with a distinct and quirky appearance. Moreover, it may cost less than an RV.
Phil Risher purchased a bus for $5,000 and then spent an additional $2,000 to turn it into his living space for a 95-day trip around the country. He collaborated with his father to carry out the remodeling, using a free layout from Pinterest and guidance from YouTube videos.
5. Off Grid
Are you interested in living apart from modern society’s norms? Off-grid living is a housing option that involves self-sustainability. You would be responsible for generating your own power and finding your own water resources instead of relying on city services. You would also produce your own food by either growing it or hunting it, rather than buying from a grocery store.
The Selden family, consisting of Tyler, Ashley, and their daughter Sydney, live off-grid in Alaska by choice. By growing, fishing, or hunting their own food, they estimate they save up to $10,000 annually.
6. House Hacking
In simple terms, house hacking involves purchasing a property and enlisting the assistance of others to cover the mortgage payments.
For three years, Riley Adams and his now-wife lived in a three-unit residential property in New Orleans without paying for housing. They rented out one unit and hosted Airbnb guests in another unit to pay for the mortgage.
It’s worth noting that you don’t necessarily need to live in a multi-unit property to try house hacking. For instance, Kristine Dowhan could afford her mortgage by listing three of the four bedrooms in her home on Airbnb. In fact, she made a $1,200 profit in just the first year of renting out these rooms. If you don’t have spare bedrooms, there are still options available. For instance, John Potter rented out a tent in his backyard on Airbnb – sometimes creative thinking can lead to success!