With a shortage of conventional homes on the market, alternative housing options are becoming more popular. Buying a house is likely the biggest investment you’ll make, and these housing styles can cater that investment to fit your unique needs, interests and routine. Whether you want to live a more minimalist lifestyle, enjoy more financial freedom, or reduce your carbon footprint, having an unconventional home provides the opportunity to make your home truly unique. This blog will explore the pros and cons of three popular types of alternative housing options.
All the rage these days, thanks in part to their popularity on home renovation reality TV shows, tiny houses are typically 400 square feet or less. They offer all the comforts of a regular-sized house, but on a much smaller scale. Providing the best of both a house and a camper, tiny houses are an excellent option for those seeking a simple, minimalist lifestyle or the chance to spend more time outdoors.
Cost. The average price for a tiny house is $45,000, with most people paying between $30,000 and $60,000. Of course, it all depends on the owner’s preferences and budget: a bare-bones tiny house with few amenities could be as low as $8,000, while a highly customized one could cost $150,000 or more. In contrast, the average cost to build a regular-sized house in 2021 was $281,220.
While many tiny house owners either own or rent the land they occupy, many opt to travel around to different campgrounds and state or national parks. The monthly expenses for campsites are generally around $500 or less, with an average price of around $40 per month for utilities. Some campsites even offer the opportunity to volunteer as temporary employees in exchange for free spots and utility hookups.
Ownership. One of the biggest attractions of a tiny house is the opportunity to fully own your home sooner than most people with a conventional home. Financing through a mortgage is an option, but lower payments mean a tiny house owner could become debt-free faster than owners of traditional homes. According to The Tiny Life, 68 percent of tiny house owners have no mortgage, compared to 29.3 percent of all U.S. homeowners.
Energy-efficiency. Less space means less to heat, cool, and clean, keeping utility costs low. Some owners live completely off the grid with solar panels, rainwater collection and composting toilets, while others choose to hook up to local water lines and electrical and septic systems. Less space also means less waste, since you can only store so many groceries, clothes and possessions.
Customization. Tiny houses can be curated and personalized to the owners’ specific style and needs, from a customized layout, amenities and finishes to clever built-in storage.
Ability to travel. While some choose to build on a permanent foundation, many tiny houses are on wheels like an RV, making them portable. For those with wanderlust or the ability to work remotely, this provides the opportunity for travel.
Zoning laws. The biggest issue with tiny houses is that they fall in a legal gray area, as zoning laws vary from state to state. Since many tiny houses are built on wheeled trailers rather than foundations, they can be classified as RVs, but unfortunately, not all RV parks accept them. To get around zoning issues, many tiny house owners opt to buy their own land, rent someone else’s property, or rent space at campgrounds or national or state parks.
Hidden costs. Depending on your financing situation and location there may be additional costs like land purchase or rent, fluctuating utility costs and vehicle expenses for transporting the house to different locations.
DIY headaches. Prefab tiny house kits are a popular, cost-effective option. They typically include all the materials needed for the frame and exterior of the home like lumber, roofing, windows and doors, but don’t typically include tools, foundation materials, or finishes like flooring, trim, shingles or paint. While going the DIY route may save money, it’s highly recommended you hire licensed electricians and plumbers for assistance.
Less space and privacy. Such close quarters are not for everyone. Some people may feel cramped, especially with children or pets added to the mix.
Requires a vehicle to travel. Though you can pick up and travel anywhere, you’ll still need a strong vehicle to haul your home.
Although shipping container homes have been around since the 1980s, they’ve gained popularity recently, thanks to their unique aesthetic, abundance in inventory and the peace of mind that comes from upcycling containers out of landfills.
Cost. Inexpensive to purchase, used containers typically cost $2,000-$6,000, depending on size, while brand-new or gently used ones sell for $10,000-$12,000. Prefab structures save money on construction, and with an excess of containers around the world, there are plenty to choose from.
Durability. Because they’re built for transporting cargo across seas and highways, shipping containers are extremely durable to withstand the elements.
Customization. At 160-320 feet each, a shipping container home can be configured however you wish, depending on how many containers are used. Some people choose a single container for a tiny house vibe, while others stack one on top of the other for two levels, or place several side-by-side for more space. Crisscrossing multiple containers in the shape of an X, T or L creates a unique Jenga-like look and layout, with the possibility of a balcony extension or patio space.
Short order-to-delivery timeline. A prefab style of shipping container means a much shorter construction timeline, and because they’re built for transportation, most designs are ready in a few weeks or even days.
Short lifespan. Shipping container homes are generally expected to last 20 to 30 years and depreciate in value over time. A used container is probably already 10-15 years old at the time of construction and will likely require maintenance within a decade.
Possibility of rust and toxins. Due to years spent exposed to the elements, the metal exterior of a shipping container is susceptible to rust damage. The exteriors are also often coated with toxic chemicals (like lead) to make them more resilient. These toxins must be stripped before the container can safely be used as a living space.
Difficult to insulate. The thinness of shipping containers’ structure can make them challenging to insulate. Depending on your local climate, having strong insulation is crucial if you want your container home to be energy-efficient.
Legal and financing issues. While some states have regulations in place, be prepared to do a lot of research about local zoning laws and necessary permits. It can also be difficult to secure a mortgage on shipping container homes, especially if the home doesn’t sit on a permanent foundation. Another potential headache lies in appraisal and resale issues, as they can be hard to conduct without comparables.
Used by various cultures for thousands of years, earth-sheltered homes experienced a surge in popularity in the 1970s with environmentalists but are making a comeback. Bermed earth shelters are usually built at ground level or into a hill, building (or berming) the earth around and on top of it, while underground earth shelters are built completely below ground. Both styles have an exposed wall with windows and glass doors for natural light, passive solar heat, ventilation and outside views.
Durability. Earth homes are incredibly durable and will endure extreme temperatures, high winds and bad weather.
Energy-efficient. The earth walls act as thermal mass, helping to maintain a steady indoor air temperature and reduce heating and cooling costs. Less susceptible to the impact of extreme outdoor air temperatures than a conventional house, these eco-friendly homes offer fantastic soundproofing and privacy, and require less outside maintenance.
Less to insure. Thanks to their ability to better withstand high winds, hailstorms, tornadoes and other natural disasters, earth-sheltered homes can cost less to insure.
Pricey. The initial cost of construction can be up to 20 percent more than a conventional house due to the necessity for careful insulation setting, waterproofing and moisture maintenance over the years. It can also be more challenging to finance and resell an earth-sheltered home, and buyers may have more hurdles to clear in the mortgage application process.
Humidity and air quality. Being built right into the soil, earth houses often have high humidity levels, which can lead to mold. Careful planning is necessary to ensure proper ventilation and good water drainage.
Less resale value. If you don’t plan on remaining in the home for a long time, an earth house may not be the best investment, as they are difficult to sell and the resale value is lower than more traditional homes.
While alternative housing options buck many trends of conventional housing and come with their own challenges and red tape, they also offer the rewards of customization, energy-efficiency, and the opportunity to create a home that reflects your lifestyle and values. If you’re interested in learning more about title insurance and settlement services available for alternative housing options, Old Republic Title is here to help.