Expert: Graham Marden, Prudential Northwest Properties
Reprinted with permission by the Oregonian Publishing Company
Topic: What should I know about buying a floating home?
Q: I'm thinking about buying a floating home. What should I know about financing?
A: Floating homes are considered personal property, so the few lenders that offer loans on them have different requirements than for a home on land. Interest rates are usually about 1 1/2 - 2 points higher than for real property loans. These lenders require a 20-25 percent down payment, with the balance at roughly 5 to 6 percent interest over a term of 20 to 25 years.
To make the deal more attractive, some sellers offer to carry the sales contract themselves (also known as seller financing), which allows them to ask for different terms than banks typically do.
Q: How do floating home inspections differ from those on land?
A: The most important aspect of inspecting a floating home is the dive or float survey. This entails going under the home to check on the condition of the logs, stringers, shims, pins, flotation and chaining to the mooring slip. Cement floats will have far less maintenance than a log and stringer float. All lenders require a dive survey. The cost is about $550.
In addition, I always recommend an above-water-line inspection, as a buyer would do with a home on land. The cost is usually $300 to $400, depending upon the size of the property.
Q: What should I know about homeowners insurance for a floating home?
A: Homeowners insurance is easy to obtain but is slightly higher than for homes on land. The annual premium is about $400 to $1800 depending upon the total amount of the coverage for the home, the value of the property (excluding the value of the slip), personal belongings, etc.
Q: What are some positive features to look for in a floating home? What are some "red flags" to watch out for?
A: Positive features to look for include:
* Having the slip included in the sales price;
* Decking that is part of the house and/or a swim float that is attached to the main house which offers additional outdoor decking space for viewing the river and entertaining.
* A cement float, which lasts longer and is easier to maintain than a log float (in newer homes with log floats, however, look for steel stringers);
* A metal roof, which is easier to maintain and lasts longer than composite, rolled or shake roofing materials;
* A place to moor your boat or other water toys.
Some "red flags" watch for are
* Windows with cracked seals;
* Damaged or weathered siding;
* Chaining & bracketing properly to the mooring slip;
* Problems with the float or built-up sediment under the house, both of which can be detected in a dive survey. (Also, if the home had a second level added after original construction, have your inspector make sure that the home is structurally sound.)
Q: What should I find out about the moorage?
A: Check the by-laws or lease agreement for possible restrictions - such as pet policies (whether dogs are allowed); the size of the boat that can be moored to your home; the availability of RV parking, storage and a garage for your car.
Also, find out whether slips are available for purchase or by rental only. Even if you own your slip, there is a Home Owner's Association (HOA) fee which typically range from $200 to $350 per month and includes your; water, garbage and sewer service, plus maintenance for the common areas including the walkways, parking lot, landscaping and entry gate, if available. If you do not own your slip, the rental/moorage fees will be higher, usually from $500 to $750 per month, w/ the same services included.
Q: What should floating home novices know about life on the water? A: Part of living in any moorage means hauling your groceries down the ramp and your garbage back up. Plus, most moorages do not have garages to keep your car from the elements. Only four moorages can guarantee you an owned garage and two others have them on a rental basis only. The largest moorage in town, Jantzen Beach, has some carports w/ storage, but these are not owned or transferable, they are rented and available on a wait list basis.
What one is really buying on the river is a lifestyle unavailable anywhere else. For most people, life on the water provides tranquility and a respite from the trials of life itself. It also offers buyers the opportunity to view an abundance of wildlife not found in the city.
Q: What about resale prospects?
A: Due to the strict financing requirements, it usually takes longer to sell a floating home than a house on land, on average six months to 1 year (compared to a land average of 100 to 180 days in the Portland-Vancouver area).
The appreciation of floating homes follows that of the overall real estate market. From 1993 to 1998, the values soared. However, during 2001-2003 annual appreciation slowed considerably during the economic slowdown. The same holds true since the recession that began in 2008. As the economy and overall real estate market improves, so will appreciation on the river with floating homes.As the available inventory of slips diminishes, the values should continue to gain in the future.
Q: Anything else I should know about purchasing a floating home?
A: Buying a floating home offers a unique opportunity for a different and relaxing lifestyle. Slip prices range from about $75,000 to $150,000, depending on the moorage, the exact location of the slip, and whether a garage is included.
As with homes on land, it is possible to have a new house custom-built to your specifications. For further information about building a floating home, obtain financing, inspections, insurance and viewing of properties on the river, my contact data is noted below.
To read additional information about floating homes, click this link - Floating Homes 101.