Can you finance a container home?

How To Finance A Container Home: All You’ll Need

Can you finance a container home? Well, before acquiring a shipping container home, you may want to know if that’s possible. Let’s find out if that is possible for a start. The positive news is that yes, you can finance a container home, but the bad news is that the financing options are limited.

The most possible question running in your mind is, how much limited are they? Well, most banks do not feel it right to lend out loans for a structure that is not permanent. In rare cases, you can mortgage a container home if it is sitting on permanent foundations, and on land that belongs to you.

In such a scenario, the mortgage covers both the container and land (if you don’t already own it). You can only finance a container home through a personal loan.

Are Container Homes a Good Investment?

With their appeal and durability, container homes can be a great way to make money. What you need to do is to invest in attractive land. What meets the eye is very important.

The land should be clean, full of fresh air, the nature around should be beautiful. Then assemble the container in the right way to prevent damage from disasters such as hurricanes. You can rent it out as  HomeAway or an  Airbnb when all this is done.

Below we give a number of reason why shipping container homes are considered to be a good investment. This is due to factors such as;

  • Flexibility. The containers can be used for many applications and purposes. They are easy to modify due to the materials they are made of.
  • Costs. Are affordable for both new and used home containers. The low labor cost makes the containers to be more economically friendly.
  • Durability. Containers are designed to carry heavy loads, withstand tons of pressure, and resist harsh weather conditions. Due to this, the home containers can last for a very long period.
  • Standardized; many home containers have the same width, length, and height measurements. They can easily be converted to a larger structure.

Read More: How to perfectly budget for the cost of a shipping container home in Texas

Are They a Good Investment?

At the end of it all, the answer to the question of whether container homes are a good investment lies with you—finally, how you plan to use the property and the investment goals matter. The home container can quickly pay for itself if it is short-term, such as vacation rentals.

Also, there is a market gap in the states where home containers are legal. You can build and sell the containers. For investors, it can be a great opportunity to earn as long as they follow the rules and regulations of what is required.

Most of the richest people in the world have made their fortunes in several ways, but the most common one is investing in real estate.

See also  Important Tools for Building a Container Home

Read More: Is a container home a good Investment for daring homeowners?

Who Invests in Container Homes?

The banks do not offer funds for structures that are not permanent. The best option to finance a container home is through your funds. Some lenders are lenient, and they can give you loans.

If your communication skills with your lender are good, you have a good amount of savings, and a source of income that is reliable, then you might be able to qualify for finance.

Read More: Unique states that openly allow shipping container homes in the US

How to Invest in Container Homes

You can invest in container homes and earn a great deal of money. There are many ways available for you to do this;

  • You can rent out a container home as an Airbnb or HomeAway. It would be best to make sure that the container is placed where the environment is cool, clean, and has fresh air. Then have the containers designed in a way that is attractive to stir up that holiday feeling for those who will rent it. Vacation rentals are a good way of investing.
  • You can make a pool out of a container and charge it to the communities who have fun. You can charge a fair fee so that both kids and adults can flock there.
  • Bar container- You can build a fully equipped bar out of a container. This is a guarantee of having the happiest neighbors around. Especially during the festive season, it is highly likely that the container will be flooded with people partying. So yeah, a bar container of another way you can have a great investment.
  • Rental storage units-People need places to store their tools or items instead of just putting them away in random places. You can rent out containers as storage units.
  • A billboard/advertising platform: Are you in need of space to launch a new product or advertising? Well, containers come in handy as they offer temporary advertising space, and after they have served their purpose, the containers can then be transferred for another project in another location.
  • Art out of containers-You can use containers to make art and then showcase them in art events.

Read More: Ultimate Truth About Shipping Container Homes in California

What Else can you Invest In With Shipping Containers?

  • A hotel out of containers – If you can make a house out of a container, you can also build a hotel. You can have containers designed attractively and painted with cool colors. People can enjoy a meal and spend a night in the containers.
  • Playroom – You can compile a playroom for kids out of used containers.
  • Greenhouse – Take a used container and make a greenhouse out of it with or without electricity.
  • Furniture – parts of the containers can make furniture such as chairs or tables.
  • Rental houses – You can invest in real estate by renting out the container homes to people who have no place to live in. They can then pay you rent at the end of the month.
  • Rental offices – the container homes can also be used as offices.
  • Hostel – There are several beautiful shipping container hostels across the world that are very successful.

Some Disadvantages of Container Homes

Even as you think of investing in a container home, it would be best to know some of the disadvantages of the containers. They include;

  • Obtaining building permits in some regions can prove to be a difficult task. However, some places such as the United States, New Zealand, and China have regulations about container homes. Any questions that you may have or any clarification you may need, you can consult your city planning officer to get more information on the requirements for container housing and other related inspections.
  • Container homes are not always eco-friendly- container homes are the best way to recycle old containers. Depending on how the container has been used, used containers are more eco-friendly.
  • Modem appliances such as electricity and plumbing can be difficult to install. If your location has no access to electricity, you will have to hire a contractor for solar panels.
  • They often need reinforcements such as cutting holes for windows and doors.
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How do you get Financing for Your Container Home?

Financing a container home depends highly on how you build it. If you are thinking of building a brand new shipping container, you can get a home construction loan for the finances.

Categories of Loans for Financing a Shipping Container Home

There are two categories of loans for financing a shipping container home. These are construction only, and construction-to-permanent loans.

  • Construction Only

You are given a loan to construct your shipping container home, and once you are through with the construction, you have to pay it back. You can borrow another loan to pay out the first loan from a new lender or the same one.

  • Construction-to-permanent

In this type of loan, you are given a loan to construct your shipping container home, and when the construction is through, the loan is converted to be a permanent mortgage.

If you prefer purchasing a container home that is already constructed, all it needs is to be transported to your land. It can be financed as a manufactured home. This is a good thing as it gives you various financing options depending on how permanent the home is or the size.

Professional advice from a mortgage broker to clarify the borrowing options would be of great help. Give the broker all the information concerning the construction plans, and you all also approach lenders who are specialists with lending criteria that are not that much restricted.

Challenges When Financing a Shipping Container Home

Strict lending guidelines: Unfortunately, most lenders become strict when releasing money for a modular home. Most lenders will only release funds after key milestones in the building have been reached.

For example, after the surveyor has issued a certificate of occupancy or services have been connected to the property. The lender will only release funding after the home is finished in rare cases.

Loan security: Banks can be reluctant to pay a builder as banks have collateral only after the building is complete.

Read More: Amazing cost to build a shipping container home

How to buy a Shipping Container for a Home

Before putting your hard earned money to invest in a shipping container home or structure, are a few nuggets that you should take into consideration.

1. Know What You’re Looking for

Before you can purchase a shipping container, you need to know what you are looking for. The right type of container should be purchased to ensure that it goes hand in hand with what you plan for your shipping home.

You can either purchase the container yourself or hire experts to do it for you. The container is new or used doesn’t matter, but there are some things you need to be knowledgeable about when it comes to buying a container home.

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Read More: Used Shipping Containers For Sale: A Low-Cost, Eco-Friendly Alternative

2. Not All Shipping Containers are the Same

Not all shipping containers are the same, so you need to decide what condition your container needs. The shipping containers are made for different uses. Some offer protection from wind and water. Others are constructed for single transportation use and are made available for sale from used dealers.

The one-trip containers are usually in good condition, offering better value. New containers are preferred over old containers since they are in good shape. However, containers can be bought when they are in an “as is” condition which means that the container could have some damages.

It could have rust, holes, doors not closing properly, or even contamination from chemical spills. Purchasing an “as is” container is not recommended if you want to use it to construct a shipping container home.

In most locations, you will find a national container company that will make the supplies, but you will find local suppliers offering better value for money.

It would be of great importance for you to know that small containers of 20-ft could be moved around more easily through them being towed. Large 40-ft containers must be craned into the right position and moved by a semi-track.

You can also purchase your shipping container from online dealers. With this digital era, you can be led to a container dealer through a Goggle search. Make sure you know what you will get and where it is coming from.

3. Don’t Cheapskate

There is the temptation to buy less expensive containers to cut costs, thus sacrificing the conditions. However, this is not advisable. Highly not recommended as you can end up with weak containers.

Eventually, they will cost you a lot more on the repairs. It is better to buy an expensive container but of high quality and serves all the conditions. Formal or informal inspections determine the quality of a container. You can also inspect the containers yourself as you purchase.

Read More: Important Tools for Building a container Home

Let’s Have a Look at Some Examples of These Container Homes

Some companies, like Ishibox Limited, offer prefabricated container homes. They offer a variety of designs that you can choose from for what you want to be your home.

Knowing that you can order a shipping container from Amazon will come as a surprise. Yes, you can.  However, it is just basic and not that good-looking—some sites such as Ishibox Limited showcase a gallery of beautiful examples of container homes. The site will give you ideas if you want to purchase by yourself.

Read More: Ultimate Guide To Screwing Anything Into A Shipping Container 

Can you get a Loan to Build a Shipping Container Home?

If lucky enough, you can get a construction loan. However, it might be difficult as loan givers might be afraid to give you funds because shipping containers lack standards. To convince them, it is safe that you show them your plans.

Also, getting a loan depends on how permanent your structure is. If your container home is not permanent or will be placed on land rent, then it is an assurance that you cannot get a loan to build it. However, if the container home is sitting on permanent foundations, you can be given a loan to construct it.

Read More: How To Join Two Shipping Containers Together

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