Nov 2, 2023
With today’s housing shortage, record-high home prices, and rising mortgage interest rates, buying a little slice of property can seem like an impossible goal to some.
One budget-friendly workaround homebuyers have found is alternative housing. Home shoppers are looking to tiny homes, recreational vehicles, and even converted shipping containers as an affordable path to homeownership. But for those who have dreamed of waterfront living without the hefty price tag, a houseboat might be just the ticket.
Before you cast off on your homebuying journey, here are some things to consider.
A houseboat isn’t a floating home
Floating homes are placed on a permanent floating foundation, typically designed to resemble real houses, and are more spacious and expensive than houseboats. They generally range from $300,000 to over a million dollars.
Houseboats generally look more boatlike and have smaller living quarters, and they’re much cheaper than a floating house.
You can buy a simple, used houseboat for around $60,000. The vessels are less maneuverable than regular boats, although they are designed for mobility. So, if you tire of living in one area, it’s anchors aweigh to another marina.
Consider hiring a real estate agent
There are some vital reasons to hire a real estate agent with experience selling houseboats when you’re looking to buy.
“It can be helpful to have an agent to assist with locating liveaboard/docking slips and to help during the negotiation stage,” says Jheena “Jaye” Johnson, a real estate agent at Dwell Bloc Real Estate Group of RLAH@Properties in Washington, DC.
Plus, houseboat listings read a lot differently than house listings.
“You will want to work with an agent who can help you understand what it is that you’ll truly own, such as real property, structure, or access, because it might not be straightforward in a listing,” says Seattle real estate agent Melissa Ahlers, of Compass Seattle.
Additionally, an agent can recommend professional marine surveyors to conduct a pre-purchase survey (think of it as a houseboat inspection), which banks and insurance companies often require. Surveyors test the operating systems and equipment and conduct a sea trial.
Financing a houseboat
Here’s the major con of buying a houseboat: They tend to depreciate in value over time, whereas houses generally build equity.
Plus, houseboats are technically considered personal property, not real estate, so landing a traditional mortgage isn’t possible for buyers.
That doesn’t mean your hopes of living on a houseboat are dead in the water. Financing a houseboat is a little tricky, but not impossible. Houseboats are financed more like an RV or motorcycle with a loan from a local bank or credit union.
The costs of owning a houseboat
“Typically, water, sewer, garbage, and dock maintenance will be included in either your moorage fees or HOA fees if you own the slip,” says Ahlers. “In total, expect to pay between $350 to $1,000 per month depending on the ownership or lease of the dock.”
And, as with a traditional home, if your heating or plumbing is on the fritz, you’ll be responsible for all maintenance and repairs. (But you won’t have a lawn to mow!)
Do you pay property taxes on a houseboat?
As a homeowner, there’s no escaping paying property taxes. But if you live on a houseboat, you might not have to pay one dime of property taxes, which could save you thousands every year.
Houseboats are typically classified as vessels or boats and are not subject to property taxes. The caveat is that while the houseboat might not be considered real property, the structure it’s attached to could be.
“If you own a slip, you would need to pay property taxes on the slip as it is real property,” says Brandon Eshaghoff, founder and CEO of The American Houseboat. However, Eshaghoff notes that most marinas in his market around DC own the slips and rent them to the houseboat owners.
Some houseboat community slips are via a co-op or condo ownership, and if so, you’ll pay homeowners association dues and personal property taxes for the houseboat and property taxes because you own the slip.
“The combination of the taxes will be comparable to what you pay on land for a similarly valued house,” says Ahlers.
Property taxes and personal tax laws vary by state, so be sure to check before you sign on the dotted line.
And in the abstract, living on a houseboat with a gorgeous waterfront view might seem fabulous, but what does daily life look like living in tight quarters? To find out, rent a houseboat for a week or more to experience houseboat life before you embark on this unique residency.