Waterfront homes for a fraction of the cost

Imagine waking up in the morning before work, and heading out to your deck to watch the sunrise over the water. If this sounds like the perfect start to the day to you, a float home lifestyle may be just what you need.

“It sounds cliché, but you feel like you’re on vacation when you’re in your own [float] home. You’re on the water, you’re surrounded by nature, the air is fresh and clean,” said Ricki Willing, a B.C. float home owner and realtor.

A float home, unlike a houseboat, is an actual stationary house that just happens to be on the water. According to Willing, float homes are gaining in popularity, especially with baby boomers, many of whom have no interest in downsizing to a condo. According to the TD Canada Trust Boomer Buyers Report, conducted in British Columbia, while 61 per cent want a smaller-sized detached home, only 24 per cent are interested in a condo.

Of course, there are lots of ways to go smaller without hitting the waves, but if you are interested in a place on the water, know that there are some key financial considerations involved. For instance, there are no property taxes on a float home (just on the waterfront lot). It’s true that property insurance on float homes cost considerably more than insurance on a typical home, however, the purchase price of float homes are much cheaper by comparison.

Take this 916 square foot float home with a waterfront lease on the Fraser River in Richmond as an example. With a purchase price of $178,000, you’re looking at a cost of $194 per square foot. A similar 838 square foot condo in a nearby neighbourhood comes in at $536 per square foot, for a total purchase price of $449,000.

That said, it's not for everyone - life on the water can come with a few unique challenges, including the danger water poses to children and the constant soft sway of the tide.

Taking the plunge

If you believe this lifestyle could be for you, there are a few important differences between buying a floater versus landlocked digs.

When you buy a float home, you can apply for a mortgage. There are two types of float home purchases you can make, and the lending process is different for each. You can decide to live in a marina, which means paying a monthly fee to dock your home, known as a moorage fee. Alternatively, you can buy a home located in a strata community, where you’re also buying your waterfront lot.

In B.C.’s Lower Mainland, the cost of a strata float home starts around $430,000. If you’re paying monthly moorage (docking fees), however, the home itself costs significantly less – around the $100,000 to $175,000 mark.

How to get in

As you can imagine, the monetary differences can play a significant role in whether or not you qualify for a mortgage on a float home.

"Quite often, I'll have a client ask me, 'How come I can only afford X-amount on a float home, but with a condo I can afford so much more?'," said Kelly Fishbrook, a Lower Mainland RBC Mortgage Specialist.

As it turns out, when you're renting the moorage for your float home, your lender considers these fees when determining whether or not you qualify for a mortgage. With moorage averaging $800 to $1,000 a month, this can mean a drastic change in some people's affordability. By using a mortgage affordability calculator and inputting the moorage fees, you can get a better idea of how this might affect you.

Additionally, all float homes require mortgage default insurance, regardless of the size of your down payment. On a typical house or condo, CMHC insurance is only required when putting less than 20 per cent down on a home worth no more than $1 million. While the actual dollar amount might only be a few thousand dollars, CMHC has very stringent affordability rules, which can present a problem for some buyers.

Despite all of this, there are a number of float home communities in Canada, although they’re typically more popular on the west coast, where the winter weather is more favourable to a waterfront community.

"Other communities do exist,” said Fishbrook. “There's a small float home community in Toronto, and you’ll even find float homes in places like Whitehorse."

Both Fishbrook and Willing agree that regardless of cost, by purchasing a float home, you're really buying into the lifestyle: colourful sunsets over the water, breathtaking views, and wildlife at your doorstep.

"Is it cheaper to buy a condo somewhere? Yes," said Fishbrook. "But is it going to be as much fun as it is to live on a float home? No."

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