The American dream of owning your own home is fading away for many these days. Hardworking families, even with frugality and sacrifice, can’t save enough for a down payment or secure an affordable mortgage.
So instead of the traditional American model of the past – where a family saves 10 or 20 percent of a home’s cost and buys a starter home – some people are looking for alternative ways to pay for the American dream.
One of these options is simply not borrowing money to buy a home. This may sound like fantasy – and often it is – but for those willing to make a long-term commitment and work hard, it can be feasible.
Before moving forward, let’s begin with a caveat. Local zoning ordinances and municipal regulations will prevent you from building a solid, off-the-grid home in many larger cities. So the caveat is that you’ll live in a rural area outside city limits that has fewer and/or looser building codes.
So to build a home you need at least five things. First, the land for your homestead. Second, building materials and tools. Third, the labor and skills to construct a home. Fourth, you’ll need realistic expectations. Unless you just won the lottery, your home will be of modest size. Finally, patience is key. If your goal is a homestead without debt, you may have to gradually improve upon things as money becomes available.
The plan for building an off-the-grid home debt free relies on you saving enough money to purchase building materials and the tools needed to construct a home.
If you want an off-the-grid homestead without debt, land is the biggest challenge. Most people simply can’t pay for a lot of land upfront. However, there are some options.
First, look for small areas of land. Even with more than 300 million people in the U.S., there are still plots of land available for a few thousand dollars. While many living off-the-grid live on 40-acre or larger homesteads, you can live off the grid on an acre or two. No, you won’t have acres to grow wheat or corn. But you’ll have enough area for small animals such as rabbits or chickens and a robust garden that provides food for the family and fodder for the domesticated animals. You’ll also have enough space for some nut trees, fruit trees and perennial fruits like grapes, raspberries and blueberries.
Second, many people in rural areas have a lot of land. Some of them may be willing to carve off a couple acres for your homestead. Depending on the jurisdiction, splitting the assessment parcels may not be that difficult.
Finally, talk to your family and friends. Perhaps an uncle will let you build on his back 40 or your mother-in-law has a few acres in the country she never uses.
The odds of success may seem small, but somewhere out there is a small plot of land for you. Don’t give up.
Building Materials and Tools
Instead of saving for a down payment, save for building materials and tools. For example, assume you’re a typical American family hoping to buy a house for $250,000. Under many mortgage lending scenarios, you’d need a down payment of 20 percent ($50,000) to qualify for a mortgage. So instead of diligently saving for a down payment, diligently save for funds to purchase building materials and tools.
For example, you could budget $30,000 for a modest log cabin kit, $15,000 for an off-the-grid power system and $5,000 for tools.
Everything, of course, depends on the specific circumstances of your homestead. If you have access to trees, you could spend considerably less on lumber. If you need to drill a deep well, you’d need more money for that. But the basic idea is to save enough money to buy the building materials and tools you need.
Finally, give consideration into building a tiny or small home. Too many Americans build homes far bigger than they need — and their mortgages reflect that.
Once you have the building material and tools, you still have to construct the home. To do this you will probably need to rent or borrow specialized equipment (like a backhoe or well-drilling equipment). This is where friends and family come in. Hopefully, they’ll be willing to donate their time and equipment to help you.
It’s possible (even likely) that with all your savings and planning, there’s still not enough money to finish everything. For example, say that you come out $10,000 short in your projections. Instead of buying and building everything at once, go slowly. The first year, you could grade the site, pour a foundation and put in a well. The second year, you could build the home. The third year, you could install the solar power system. This is all possible because you will have a lot of extra money each month to spend on the homestead instead of a mortgage.
Many Americans are drowning in debt. Instead of slowly heading toward bankruptcy with a mortgage you can’t afford, consider these ideas for building an off-the-grid home without debt.
What advice would you add for building a home, debt-free? Share your thoughts in the section below: