Does saving money while living an alternate lifestyle float your boat?

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Published Date 11/7/2023

Where do you look for a budget-friendly housing option when there’s a housing shortage, homes carry the value of the blood of your firstborn, and mortgage interest rates make you want to move back in with your parents?

According to Realtor’s Lisa Marie Conklin, alternative housing - such as tiny homes, recreational vehicles, and even converted shipping containers can become an affordable path to homeownership.

But what if you could have a permanent water view without the hefty price tag? Before you cast off on your home buying journey, consider a houseboat. But first, educate yourself on this piece of floating (semi)-real estate.

Semantics tell us a lot. “If you’re new to the houseboat market, you might not realize there is a difference between houseboats and floating homes,” says Conklin. “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, on the other hand, look more boatlike and have smaller living quarters — plus they are MUCH less expensive than floating houses. “You can buy a simple, used houseboat for around $60,000,” says Conklin. “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.”

Finding a houseboat takes a bit of expertise, so consider using a real estate agent in your quest. Some have extensive experience in houseboat buying and selling. “It can be helpful to have an agent to assist with locating live-aboard/docking slips and to help during the negotiation stage,” says Washington, D.C. agent Jheena “Jaye” Johnson. Plus, houseboat listings read a lot differently than house listings.

Seattle-based agent Melissa Ahlers agrees: “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.”

An agent can also 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.

The thing about buying a houseboat that you may not appreciate, however, is appreciation. “They tend to depreciate in value over time, whereas houses generally build equity,” says Conklin. “Plus, houseboats are technically considered personal property, not real estate, so landing a traditional mortgage isn’t possible for buyers.”

While financing a houseboat is a little tricky, it’s not impossible. Houseboats are financed more like an RV or motorcycle with a loan from a local bank or credit union. And in popular houseboat communities such as Seattle and Sausalito, CA, you might have more luck finding a loan with good terms and rates.

A big upside? Living aboard a houseboat can be significantly less expensive than renting an apartment or living in a house. Still, there are some monthly costs when considering your overall housing budget, most of which will go to securing your houseboat to a dock or buoy. Monthly mooring fees vary depending on whether you lease or own the boat slip.

“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 even though you won’t have to mow a lawn, as with a traditional home, if your heating or plumbing is on the fritz, you’ll be responsible for all maintenance and repairs.

Taxes? You don't have to pay property taxes on a houseboat. Most houseboat owners pay not a dime in property taxes, which could save you thousands every year. Because they are typically classified as vessels or boats, they are not subject to property taxes. The slip your houseboat is attached to, on the other hand, is a horse of a different color. “If you own a slip, you would need to pay property taxes on the slip as it is real property,” says houseboat expert Brandon Eshaghoff. He does note, however, that most marinas in his market around DC own the slips and rent them to the houseboat owners.

Researching further, Conklin finds that 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.

So what does life look like on a houseboat? Conklin recommends renting one for a week or more to experience houseboat life before you embark on this unique residency. Look to AirBnb and VRBO to float your boat for a while.

Realtor, TBWS

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NEXA Mortgage, LLC (NMLS #1660690) 3100 W Ray Rd 201, Suite 209, Chandler, AZ 85226 (www.nmlsconsumeraccess.org); Equal Housing Opportunity