Buying, Financing And Living In A Floating House: What You Need To Know

Alternative housing has become a hot topic thanks to housing shortages and a growing desire among home buyers for housing options that break the traditional, cookie-cutter mold.

A floating house is a type of alternative housing home buyers are starting to pay more attention to.

Have you ever dreamed of waking up to stunning waterfront views? Let’s dive into the details of floating homes, including their characteristics, benefits and drawbacks.

What Is A Floating House?

A floating house is a residence built on a foundation that floats on water, rising and falling with the tide. The house, which can be everything from a tiny house to a four-story house, is permanently moored at a slip or dock and connected to public utilities. Most floating homes are constructed using hulls made from concrete, wood or foam.

The Difference Between A Houseboat And A Floating House

Unlike a floating house, a houseboat has a built-in motor and navigation system and isn’t permanently attached to a dock. A houseboat is essentially a boat or barge modified for year-round living. Houseboats aren’t connected to utilities. They either have self-contained systems or hook up to utilities at a marina slip. The hull of a houseboat is usually made from fiberglass, aluminum or steel.

Is A Floating House Right For Me?

Buying a floating home isn’t for everyone, but it can be a creative option for people who want to experience a unique lifestyle.

Here are a few pros and cons to weigh before you start looking at floating houses:

Pros Of Floating Homes

Below are some benefits you can enjoy from buying a floating home.

• Utilities are permanently connected: Since floating homes are usually permanently moored, you’ll have permanent access to utilities, similar to a traditional house on land.
• Stronger communities than land-based neighborhoods: Like tiny home communities, floating home communities usually attract people who share similar interests and lifestyles. That camaraderie can be stronger than what you may find in neighborhoods on land.
• Likely cheaper than homes on land in expensive coastal cities: A floating home may be an affordable solution for buying a home in an expensive coastal city.
• Safer than beachfront properties in small storms: Floating homes can weather small storms better than some coastal homes because they can rise with water levels to avoid flooding.
• Beautiful views: Thanks to their enviable views, beachfront homes are often some of the most expensive homes. A floating home can offer the same striking views for a fraction of the price.

Cons Of Floating Homes

Below are some possible drawbacks to consider before buying a floating home.

• Monthly HOA fees: While a floating home is usually cheaper than a traditional home, you should account for the significant monthly fee you’ll likely pay your homeowners association (HOA).
• Difficulty getting a mortgage: Finding a lender to finance your floating home purchase can be challenging. The interest rate and loan terms may be less favorable than what a lender would offer if you bought a traditional house.
• Spotty cell and internet coverage: Most floating homes have solid amenities, but cellphone and internet service can be spotty depending on location.
• Costly property damage: A large storm may cause expensive property damage. The gentle, lapping water you’re used to can become choppy, making it difficult to sleep or complete tasks.

How Much Do Floating Homes Cost?

Purchasing a floating house involves a range of costs to consider. The first cost is the purchase price. It can range from $35,000 to over $1 million. If you need to purchase or rent a slip to dock your floating home, that will be another cost to add to the total.

There are also long-term costs for homeowners. For example, if your floating home gets weighed down by additional furniture, fixtures or renovations, you’ll need to add more flotation to the bottom to bring the house back up to the appropriate water level. If the siding gets damaged from excess moisture, you must replace it to maintain structural integrity.

Other long-term costs can include monthly HOA and rental fees if you rent a slip in the moorage. Review your budget in detail before you commit to buying a floating home. All these costs, from the purchase price to maintenance, can add up.

How To Buy A Floating House

Buying a floating house is similar to buying a condo. Floating homes are attached to a permanent structure on the water called a moorage. Moorage owners typically sell or rent the space for a floating house and often provide other services, like utility hookups.

The owner of the floating home pays homeowners association fees, and they pay rent if they’re renting a moorage space. Similar to condo HOAs, some moorage communities may set rules for owners, like no pets or no short-term rentals.

How To Finance A Floating House

Financing a floating house can be trickier than other types of homes. You’ll need to find a lender willing to issue a loan for a floating home. Floating homes aren’t eligible for government-backed loan programs. You won’t be able to use a Federal Housing Administration (FHA) loan or a Department of Veterans Affairs (VA) loan to finance the property.

Lenders may set additional borrower requirements or restrictions. For example, they may require a minimum down payment of 20%, charge a higher interest rate or require the floating home to be move-in ready.

If you’re looking to buy a floating house with a mortgage, it’s best to talk with a Home Loan Expert who can help you through the financing process. Not all lenders offer floating home loans. An agent may help you identify the best options for financing.

Are Floating Homes A Good Investment?

While floating homes can appreciate in value, they can take longer to sell. It’s a unique living situation. Not every buyer is interested in an alternative home or housing situation.

For some buyers looking for affordable housing, floating homes can be a good investment because they’re usually cheaper than traditional homes on land. With a floating home, you can live for less and potentially save more to meet your personal or financial goals. However, if you’re planning on living in the home for a short time and selling it for a profit a few years down the road, you’ll likely be better off buying a traditional house.

The Bottom Line: Floating Houses Offer Peaceful Alternative Living With Waterfront Views

For the right home buyer, floating homes can be exciting alternatives to traditional homes. If you love the water and live in an expensive city like Seattle, San Francisco, Portland or Los Angeles, a floating home may make a lot of sense. Before you start your floating home search, work with a Verified Partner Agent who knows the floating home market in your area.