Hellobee Boards

I have seen this done before and loved the idea. You get one those trifold cardboard project displays and cut it into thirds heightwise (or maybe halves for 12" dolls?) and also buy some furniture sets. Have LO if she is old enough decorate the pieces of cardboars so they look like rooms. You could even paint them with white chalkboard paint instead so she can redo them. If she isn't old enough, just get some scrapbook paper to use as wall paper and do it yourself. This way LO has a dollhouse that she can put away when it isn't in use.

@SugarplumsMom: Essentially every room is a little shadow box that you put next to each other. It would look kind of like this but with three walls and no floor:

https://s-media-cache-ak0.pinimg.com/236x/52/2f/ba/522fba4deb3bb948085cd7f83751588c.jpg

I saw this sometime in my youth and the idea stuck with me. I just also thought you could use those foldable fabric cubes on their sides and put furniture in there... but that might be tight quarters for 12" dolls. I have seen 12" dollhouses made out of Ikea Kallax bookcase so maybe not. I also really like that idea because it looks like a normal bookcase after it is no longer a dollhouse.

We have a very similar dollhouse. She has had it since 2. I think I will use it as an additional bookshelf one day to extend the life. If I was in your place, it would depend on LO and the cost of both items. Most girls won't completely outgrow having a dollhouse in their room until around 8 or 9.

When I was a girl, my parents got me plastic crates and dollhouse furniture and i could build my own dollhouse. It was very STEM of them but also cheap! And stored easily. (They definitely could have afforded a wooden dollhouse but chose not to because I always liked setting the house up
Better than actually pretending with dolls.)