Renting Vs. Buying a House and Alternative Housing Options

3 bedroom house

Buying a house takes a lot of planning and saving. Homebuyers have the purchase price to consider, but if they are planning on applying for a mortgage, they also have the down payment, closing costs, and reserve funds lenders like to see held in bank accounts. What about renting? Renting seems like a viable option for those working on saving up for a house, but can you really get ahead? 

When you discuss renting vs. buying a house, you need to consider other recurring payments like utilities, taxes, homeowners insurance, and maintenance. All expenses you may not have had to pay as a renter. As a quick example, say you rent a three-bedroom house for $1100/mo. and have no utility costs, and pay $10/month in renters insurance. That is the bulk of your living expenses, $1110/month.

You would need to find a house for $164,000, pay 3% down or $4,920, pay $200/month in taxes, $83/month for insurance, and a mortgage and private mortgage insurance (PMI) payment of $1109.09. The estimate is based on a 30 yr—fixed-rate mortgage at 4% interest. With the median home selling in March 2022 for $405,000, according to®, the likelihood of finding a $164,000 house that isn’t falling over is slim. 

This doesn’t mean buying a house right now is impossible; of course, it’s not. But it is becoming increasingly challenging. So what does renting look like across the United States, and could build a house using an alternative house option be a solution for your housing needs? 

Rent prices across the U.S.

renting-rent-apartments does a great breakdown monthly of the most populated cities in the U.S and their current rental rates. For the sake of this article, I’m going to highlight the top 20 for both 1BR and 2BR units in March 2022.

To put the median home price of $405,000 in the same perspective as a rent payment. According to our mortgage calculator and what I would want to be covered as a landlord (mortgage, taxes, insurance, other expenses +$100 per door), rent would need to be $2,800/month. 

According to the data below, you could rent a two-bedroom unit in at least ten of the most populated cities for under $2,500. You could also rent a one-bedroom unit in 15 of the most densely populated areas for under $2,500/month. 

2 bedroom rental rates march 2022
one bedroom rental rates march 2022

Given we are working with rent of around $2,500 a month, there are many forms of alternative housing solutions where the cost of living is much less. Your upfront costs may not be as much as the downpayment and closing costs on a traditional house, and you won’t have a mortgage to pay.

Exploring alternative housing options under $2,500 a month


Alternative housing options can range in cost and the type of house you’re considering. Many forms of alternative housing also involve a change in lifestyles like downsizing due to space like a tiny house or location like a houseboat, or both like camping, living in a yurt or tipi. We will look at the cheapest forms of alternative housing in terms of upfront cost and fall under the monthly living expenses of $2,500 a month.

Tiny house – The cost to build a tiny home can range anywhere from $20,000 – 60,000 on materials, building permits, and foundations. But you could be all-in for that price or even less if you can finish the interior yourself as a DIY project.

Earth berm house – An earth berm house is around $33 for a 24-foot modular shell. As a DIY, others have built earth berm homes for $62,000 in 3 months. All other building costs are added on top.

Earthbag home – The cost of an earthbag home can range between $6000–$10,000 for a 30-foot round home, and as a DIY takes about six months to a year to build. 

RV – Buying a used RV for $2,000–$10,000 and parking in a free parking spot. Even if you need to pay for parking, the overall cost of living ends up right around the $2,500/month mark. 

Converted van-camper, moving truck, or ambulance – The cost to purchase can range from $10,000 – $20,000, and converting it can be another $10,000 – $20,000 depending on your level of DIY skills.

Cob house– You can DIY your build for $5,000 – $20,000

Aircrete house–  According to one estimate, a 1000 square foot dome built 4-inches thick would cost about $4000. This is just the shell; you’d still have electrical and plumbing costs, which could range between $5,000-$10,000.

Camping – You could consider camping for under $40/night in a park, and you’d have to move every 14 days. The upfront costs can range from a one-time investment of $231 to $2,762. For a family of four, you could be looking at $575–$7070 in upfront costs. 

Shipping containers– Shipping container homes are trending as alternative housing solutions. You can find a built-out shipping container online for $10,000–35,000 for a basic model. You would need to have a foundation poured for $8,500 and the electrical and plumbing set for $5,000 but once set in place; you have only your utility bills. 

Straw bale house – A straw bale house is highly customizable and requires a concrete foundation for the building, which costs about $8,500. A straw bale house can cost $20–75 per square foot, depending on your DIY skills. You would then have electrical and plumbing but could be all in for less than $100,000. 

When given proper consideration, alternative housing can have people living in a home they love and possibly added to with sweat equity and an overall lower cost of living. Most alternative housing options take an upfront investment, and you may need to get a personal loan. But even taking the most expensive option on our list, the straw bale house at $100,000, a 30-year mortgage at 4% would be $2,700/month. 

Check out our pros and cons articles about permanent, mobile, and unconventional forms of alternative housing. 


Eva is a freelance copywriter specializing in all things real estate, B2B, PropTech, ReTech, CRETech. Owning rental property herself, Eva's love of real estate has turned into a passion for alternative housing options and educating people about the different types of housing available.

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