Buying Houseboats:Purchasing a houseboat is quite different than purchasing a home on land. We live aboard a dual stern paddlewheel vessel on Lake Union - The KevLin; so we have been through the process. Additionally, we have helped a number of people dive in to this lifestyle, so we are quite familiar with the steps involved in a houseboat purchase. We, like most people who purchase a houseboat for the first time, were very surprised at what was involved.
The KevLin is a 1200 square foot, 2 bedroom, 2 bath home with all the necessary amenities for a busy professional PLUS no lawn to mow! The benefits of living on the lake are numerous, but primarily are lifestyle improvements. Now, our time off work consists of hopping in the runabout and heading to a restaurant located on the lake for dinner, or BBQ’ing and hanging out with friends on the dock. Maybe a workout by walking, kayaking, or biking around the Burke Gillman trail, or simply enjoying a glass of wine on the deck while taking in the ever changing sites and sound of the lake.
Okay, well there are some drawbacks too (For us, the benefits FAR outweigh the drawbacks);
Space is usually at a premium… If you need lots of square feet, then a houseboat is probably not for you. On a boat, it is all about the square inches! You will probably need a storage space in addition to your houseboat. Boats move. Houses do not. You will feel motion on the lake. The amount of motion you will feel is dependent on the style, and size of houseboat, as well as your dock location. Maintenance - Boats require maintenance - Typically more than a house and may include more mechanical type maintenance. You will probably not be able to run 220 volt appliances, so some consessions are required - i.e. 110 volt washer/dryer. Some houseboats will not have washer/dryers - shop for what you want. You may be using propane & will make occasional trips to fill the tanks.
Sound appealing? Here’s some questions to ask if you are considering a buying a Houseboat , or other liveaboard: www.LakeUnionLiving.com
What are the differences in Floating Homes, Houseboats, House Barge, or Vessel? Marinas have a limited number of live aboard rental spaces available and there can be very long waiting lists to get a space. Exercise caution when purchasing a liveaboard. You must have permission from the marina to liveaboard.
What lenders do houseboat loans? This varies with the times, economy, and policies of the lenders. Interest rates are typically higher than a mortgage loan and vary depending on the lender, down payment and credit scores. So it is highly recommended that you get quotes from several lenders. Rates will typically be 2 to 3 points higher than residential rate. Also, rates vary by lender, and are affected by the economy.
How much down payment is required? Typically 25%, however I have heard some will go down to 20% depending on credit and other factors. What will the lender require? Good credit.
A Marine Survey for barges and vessels. Appraisals and dive inspections for floating homes.
What is the standard loan term? Vessels and barges in condo and rental slips loan terms are typically 20 years . Yet again there are a few lenders that will go longer and some only 15. Floating homes vary similarly to residential mortgages.
What is the inspection / appraisal process? Vessels and barges require a Marine Survey (includes the inspection and the appraisal to determine value). The Survey will be used by the lender and the insurance company. Buyer pays for the survey, price depends on the size of houseboat and must be hauled out to survey the hull. This too is an expense to the buyer and can cost aproximately $14.00 per foot and up depending on the size and service used. Vessels may require a sea trial. Floating homes have appraisals and diver inspections. Most lenders have their own approved surveyors and divers.
Who pays the sales tax at close and how much is it? Vessels have sales tax and buyer pays the sales tax , which in Seattle is 10%. Housebarges may be exempt from sales tax - please check with your marine title company regarding this. The sales tax may or may not be rolled into the loan, so check with your lender. If Sales Tax cannot be rolled in to the loan, you must plan for this to be in addition to the downpayment and the survey costs.
Is there Excise Tax? (paid by seller) Floating homes (deeded property) - yes Vessels - no, only the deeded dock space, such as condo type dock. Housebarges - check with marine title/escrow company.
Are there property taxes? Floating homes (deeded property) - yes Vessels do not have excise, only the deeded dock spaces. Check with the marine title/escrow company regarding Housebarges.
Can an owner deduct interest paid when filing taxes? Yes, you can typically deduct the interest you pay on the loan as these may be considered primary or secondary residences. Check with your CPA.
Who insures houseboats? Vessel insurance companies will typically insure houseboats and the cost varies, so you need to check around. I will be compiling a list of contacts for insurance to be available soon. How much is the insurance for a house boat?
It will depend on the size of the houseboat, however the cost can be much higher than you expect, so be prepared. Do not be surprised to see insurance rates of $2500 or more per year on larger houseboats, usually payable in quarterly payments. It really pays to shop around for the insurance before you close.
What will the insurance company require?
Insurance requires a copy of the Survey , or diver inspection.
Who closes the sale transactions:
Floating homes - Residential title/escrowVessel or barge - Marine Title Companies.
What is the difference in the Marina versus owned dock, and how does this impact the loan?
Marina’s are typically month to month rental slips and must be approved for each owner. You must be approved by the marina before you buy, because there are no gurantees that you will be approved for the slip once you close on the deal.
Rental cost determined by the length of the boat.
Liveaboards usually have an additional fee
Deeded docks are similar to condo’s, with member associations and HOD’s.
HOD’s vary depending on the locations.
Things you need to know:
The lake will varies in elevation about 2 feet, so you will need to adjust mooring lines on fixed docks, and you also may need a removable step stool to board.
Water is typically turned off in the marina’s when it is freezing to prevent exposed pipes from freezing and boats from sinking. It is helpful to have a water storage tank.
Some marina’s have restrooms and showers.
Marina’s are limited to a certain percentage of liveaboards, therefore there can be a long waiting list to get into a liveaboard space if you decide to move to a new location, or if you buy a houseboat not already located in a slip.
In the marinas, grey water (showers, dishwashers, sinks, clothes washers) goes into the lake. You must take care of the lake and use eco friendly products to protect the lake enviornment.
Pumpout services for sewage (black water) are available on the lake and will pick up on a regular schedule, or on call. They get busy in the summer, so pays to have a regular servicing scheduled. Sewage should NEVER be dumped into the lake and is a seriously fineable offence.
Electrical is from a plug in on the dock, typically limited to 110 volts.
Water is from a water hose connection.
What contingencies need to be in the offer should you choose to purchase a vessel, barge or floating home?
The following are minimal contingencies that should be in any offer you make on a Floating Home, Houseboat, or other liveaboard:
- Ability to obtain Financing
- Ability to obtain Insurance
- Satisfactory Inspection (appraisal or survey)
- Ability to live aboard
It is strongly recommended that you use an experienced vessel, barge or floating home agent when buying or selling. If you have questions, or just want to come visit to see what liveaboard living is like, call Linda (206) 419-0065 for a personal tour. We will take the runabout out on the lake and tour the lake living, sites and marina locations. Allow a minimum of two hours for the tour.
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