alternatives to Renting

The housing market is changing. With higher home prices it is more difficult to secure a quality house. On the other hand, rental agreement prices also continue to rise. Thankfully, there are alternatives if you’re willing to get a bit creative. Traditional renting agreements may not fit each person’s financial needs, opening the door to alternative housing. Here are our suggestions:

1. Contract For Deed Financing

Contract for Deed, or CFD, is what we here at House Help specialize in. In this method, the seller purchases the home. Then, the buyer makes payments directly to the seller. After all payments are completed, the buyer receives the legal deed to the property.

Pros:

– Lower Qualification requirements: Financial hardship happens to everyone. Buyers can fail to qualify for traditional mortgages for any variety of reasons, from credit issues to even self-employment. These buyers may find it easier to enter a Contract For Deed contract.

– Flexibility: In a CFD agreement, there is more room to adjust the down payment, interest rate, and personalized payment schedule- making it easier to fit your needs than a traditional loan

Cons:

– Higher Risk: The seller keeps the title until they receive the full price. Because of this, there is a risk of losing the deed if you fail to meet your agreed-upon pavements.

– Potential for Increased Cost: There is a chance for higher interest rates than a traditional mortgage loan. For this type of loan, the seller has an increased risk and therefore may choose to implement a higher interest rate.

2. Co-Housing

Co-housing is a unique approach to living where a community of private homes shares amenities such as kitchens, laundry facilities, recreational spaces, and more. This community-focused model allows for personal space while reducing costs through shared spaces. It can also be more eco-friendly!

Pros:

– Shared Costs: Obvious of a group-focused living agreement, a top pro of co-housing is sharing the costs associated with the shared spaces. Maintenance and purchase costs are shared among the community, reducing the financial burden of necessary costs.

– Built-in Community: Through shared spaces and an agreement to work together to maintain them, co-housing gives you a close-knit group to connect with. Social connection is vital for humanity and is beneficial to anyone regardless of their familial situation.

Cons:

– Less Privacy: Compared to traditional homeownership, co-housing provides much less privacy. Shared amenities require an increased amount of social interaction with your community.

– Difficulties in Decision Making: A common pro is also a con. All members of the co-housing section have a say in community decisions. Where the communication is beneficial it can complicate things and make decisions and changes take longer to implement.

3. A Tiny or Mobile Home

To reduce home costs, reduce the size of your home! Tiny and mobile homes are a less expensive option than buying a traditional home. With the mobile home option, you also gain the benefit of travel!

Pros:

– Affordability: Reduction in size in an increase in savings. These home options will cost you less than a traditional home. If the size works for you, go for it!

– Unique Benefits: Each option offers something a traditional home cannot. As stated above, a mobile home opens up the world. Anywhere could be home! On the other hand, a tiny home consumes less energy and saves you money on utility bills.

Cons:

– Lack of Space: Larger families may struggle with either of these options. Neither a tiny nor mobile home offers enough space for a large family to grow and thrive. Perfect for a single or a duo, they lose points as family homes.

– Low Resale: Mobile homes do not retain value well, new models come out frequently and push older homes into obscurity. For the tiny home, it is the simple fact that it can be difficult to sell a new group of people living in a tiny space if you are to move.

4. Roommates

Combining funds makes buying homes easier. Multiple incomes make potential sellers more willing to trust you with the purchase. Reach out to family, friends, or other trustworthy people about committing to a mortgage or lease together.

Pros:

– Reduced Cost: As with any shared living situation, more people committed to maintaining the space equals a reduction in the cost of maintenance.

– Social Connection: Living with friends and family makes it easy (and cheap!) to organize and speak with more people.

Cons: 

– Potential for Conflict: We’ve all heard roommate horror stories. Shared living can lead to unexpected conflicts that you have to navigate through.

– Complicated Exits: If conflict escalates to needing to leave the home, exiting can get complex in shared property agreements. Be prepared for a lot of conversations and paperwork. 

5. Rent-to-Own Agreements

A Rent-to-Own Agreement is still renting, but it has the potential to go beyond. This method differs from a CFD contract in the fact that you are not buying the property outright. Instead, a rent-to-own agreement is when a landlord allows the renter to buy the property after a certain length of time. Part of the rent paid before that point in time may be negotiated to contribute to the purchase of the home.

Pros:

– Building Equity: As the Rent to Own agreement is made ahead of time, you have an increased chance of re-selling the property for more than you owe the mortgage. When a portion of your rent payment goes towards the purchase price, it will reduce the remaining balance on the mortgage.

– Try Before You Buy: Living in the home, neighborhood, and city allows the renter/buyer to be confident in their choice of a home. It allows you to discover the quirks of living in the home, both positive and negative.

Cons:

– Non-Refundable Payments: If the renter does not purchase the home, any extra money paid towards the deed is rarely refunded. It is considered part of the rental agreement and therefore the landlords to keep.

– Fluctuation in the Housing Market: Housing prices can be unpredictable, depending on the market conditions there is a chance that the price agreed on when the rental period started will be higher than the market value at the time of purchase. 

 

Alternatives to renting are out there! When leaving renting behind, take time to evaluate your financial situation, long-term goals, and the amount of risk you’re willing to take on. Any housing option has pros and cons, but with careful planning, you’ll be able to find the path to housing that is right for you.


At House Help MN we understand the importance of a home and how big of a decision it is when it comes to buying or selling, and that not every situation is the same. That is why we follow a strict code of ethics and are transparent with everything we do. With 20 years in the real estate industry, we will walk you through multiple options and help you every step of the way. We will find a solution that is right for you and make the process quick and as easy as possible.

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