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Old 27-02-2014, 09:54   #1
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Ever own a marina?

Hi

Wondering if anyone out there has owned a marina? I'm considering buying one. What are the pitfalls? things to look out for? Good the bad and the ugly? It would be year round with some seasonal berths in a busy port city in Canada. And yes there is a shortage of space here, however I'm thinking of making some affordable space available for the average joe/jane.

Thanks
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Old 27-02-2014, 10:57   #2
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Re: Ever own a marina?

Almost but came to my senses. Was in negotiations to purchase Bucks Harbor Marine a few years ago but the deal fell through.

It is very difficult to make money in the marina business. They have a saying: How do you make a million dollars in the marina business? Start with 2 million.
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Old 27-02-2014, 12:30   #3
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Re: Ever own a marina?

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Originally Posted by Campbellcruiser View Post
Hi

Wondering if anyone out there has owned a marina? I'm considering buying one. What are the pitfalls? things to look out for? Good the bad and the ugly? It would be year round with some seasonal berths in a busy port city in Canada. And yes there is a shortage of space here, however I'm thinking of making some affordable space available for the average joe/jane.

Thanks
Just like Tim, we almost did. Twice were tempted. Twice came to our senses. The single biggest pitfall is mother nature coming along in some destructive manner or something like a fire.

The more common pitfalls would include underestimating the amount of maintenance necessary to keep it in top condition. Also, hiring seasonal employees. Then one that creeps in and that is changes in governmental regulations, fees or taxes. One change can turn a profitable marina into a losing one.

I will also warn you of this. You say "making some affordable space available for the average joe/jane." That implies you'd make space available for less than it currently is in the area. NO. The ones currently charging the going rates already know the costs involved and what rates are necessary. To think you can come in and charge less and still be profitable just isn't likely to happen. And if you want out later, reselling marinas is very hard. When I moved to Fort Lauderdale there were five officially on the market and at least three more secretly for sale. The Marina we considered in SC has been for sale for at least three years and is still on the market.

The last negative I'll mention. If you love getting out on the water, you'll probably be out a lot less and your recreation has now turned into a job.

Now, the pluses. Keeps you on the water and active with boaters. You can really build a lot of friendships and good relationships and be very involved in the boating community. Also, it can be profitable. It can be fun. It can be a family business too. I'd think about my own skills, how much time I wanted to put into it. Most marina owners work long hours. And is it really a fit for me. Managing a business. Providing customer service. Handling all the problems. It's retail and all the brings with it. If I was thinking of it as a business and full time then I'd strongly consider one. But as a side business or investment, I've decided that isn't for me.
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Old 27-02-2014, 12:38   #4
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Re: Ever own a marina?

Ever own a marina?. With all due resPect. .. seek real professional assistance or consultants or go work in one for a few years. Asking such a question on this forum and exPeCTing anything other than cursory replies makes me raise my eyebrows. An analogue would be to going on a forum for people who like to cook and asking for advice on opening a restaurant. A MarTina is a major league serious investment and business undertaking and I could easily come yo with a hundred questions for you. ... in a minute. ..
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Old 27-02-2014, 12:43   #5
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Re: Ever own a marina?

Some good points, thanks.

When I said affordable, mostly I meant in slip size. All the 35' slips are turning into 40-50' slip. The place in looking at might be a good spot to have a mix of 40-50' with some 30-35' slips due to the proximity to other marinas. I still have some research to do, but thought I would start here. The marina is in Nanaimo, BC. I think it is priced high, but it depends if it is a foreshore lease or a foreshore (owned). Can mean the difference in price and what you can do.
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Old 27-02-2014, 12:50   #6
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Re: Ever own a marina?

I think its a great question. I've never owned one or had the opportunity to buy one but if I were younger I'd love to give it a go.

In this area there is a great demand for marina space. The state works very hard to prevent private marinas from happening so if your local government is cooperative you've won the biggest battle. I would think the next entity to have on your side would be the insurance companies in your area.

Yes, there are a million questions but asking here from marina users and possible former owners is a good start.

A couple I know kept their boat at Campbell River a few years and were really impressed with the area so you'd have a great geographic area.

What I look for in a marina is a safe place to tie, hot showers and laundromat. Anything else is superfluous.

kind regards,
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Old 27-02-2014, 13:40   #7
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Re: Ever own a marina?

It's interesting that marinas seem to be viewed as such a non-profitable business. Full disclosure, I really know nothing about marinas. Just thinking aloud here.

I would've thought that marinas would be quite successful. They are much like mobile home parks on land, which can actually provide fairly decent returns. The similarities are striking.

But here are the do's and don't of successful mobile home park investing. They probably apply here as well.

DO
  • Ensure that the seller is doing so because they simply don't have the time or energy to run it anymore. Maybe they are too old to properly maintain it, or there was a divorce or something. But if that wasn't the case they would gladly keep running it themselves.
  • If there is no current lien on the property, try to get the seller to finance it for 10-20% down. Keep the banks out of it if you can.
  • Ensure that the local government isn't trying to get rid of mobile parks.
  • Only focus on maintaining the property.
  • Purchase a property that could realize rent increases within two years with proper care.
  • Purchase a property that has obvious ways to reduce costs.
  • Find a location with a growing population and limited opportunity for new parks. There will always be open land for new parks but in the best areas the local zoning wouldn't allow new ones close to the best areas.
  • Avoid ultra high end parks with unnecessary high-maintenance amenities; swimming pools, nice clubhouses, etc. These parks have high vacancy rates and even higher operating costs.
  • Avoid getting involved with tenants. You maintain the property in top shape. That's it. You are not responsible for their problems in the middle of the night caused by bad weather, leaks, etc...
DON'T
  • Don't ever locate in a hurricane zone. A huge number of your tenants are going to lack proper insurance. Hurricanes destroy mobile homes, and if the owner doesn't have insurance it will be up to you to clean up the mess and get your property back to functioning order. Regular storms are bad enough, even 1 hurricane in 15 years is too much.
  • Don't have an ownership interest in any mobile homes. You are in the land business, not in the home rental business.
  • Don't get involved in the lives of your tenants. Better if they didn't even know who you are. The drama of the park typically results in deterioration of the park.
  • Don't pay for vacancies. You must only pay for current income on the property, not the income it might have after you get it running properly. It's easy for a seller to insist that even though the lots are empty that the land is still worth something. THAT IS NOT CORRECT. A lot with zero income is worth $0. They aren't selling you bare land.
I'm pretty sure that literally every one of these rules would apply to a marina in the same way that they apply to a mobile home park. The idea is that you are trying to increase total rents and decrease costs. Completely avoid getting involved with the tenants and make sure that above all else you strictly maintain the quality and standards of the marina without trying to offer things that not everyone wants.
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Old 27-02-2014, 13:53   #8
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Re: Ever own a marina?

Consultant is a fancy word for someone that offers advice that may or may not be good and charges you for it.

Like I said I'm thinking at this point, so I'm looking for experience and users input.
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Old 27-02-2014, 13:58   #9
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Re: Ever own a marina?

All the marina owners are too busy keeping their properties running to join this discussion.

I once talked to a marina owner. Do I qualify to answer?

He told me he enjoyed it, for the first few years, but then realized he never was able to take a vacation and the tenants thought he was available 34/7 even after the office was closed for the day.

Oh, and he never got to use his own boat.
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Old 27-02-2014, 14:08   #10
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Re: Ever own a marina?

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Originally Posted by SkiprJohn View Post
I think its a great question. I've never owned one or had the opportunity to buy one but if I were younger I'd love to give it a go.

In this area there is a great demand for marina space. The state works very hard to prevent private marinas from happening so if your local government is cooperative you've won the biggest battle. I would think the next entity to have on your side would be the insurance companies in your area.

Yes, there are a million questions but asking here from marina users and possible former owners is a good start.

A couple I know kept their boat at Campbell River a few years and were really impressed with the area so you'd have a great geographic area.

What I look for in a marina is a safe place to tie, hot showers and laundromat. Anything else is superfluous.

kind regards,
Don't forget fuel, both gasoline and diesel, requiring lots of permits. Then pump out. Must be a "Clean" marina now in many states.

In regards to local governments, two things happening a lot. First, they allow you to build one on land you lease from them. True on rivers too, a lot of TVA leases to marinas on the Tennessee. But your ownership therefore is never complete. Try financing a new building on leased land.

Then you have the situation many marinas face in Florida. While a few actually own the land the water and docks are on, many only own the land and have permission for the docks. This is known as "State-owned submerged land lease" and is accompanied by fees. These fees are sizable and subject to increase. This is one reason so many marinas in Florida hit the market over the last two to three years.
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Old 27-02-2014, 14:10   #11
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Re: Ever own a marina?

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Originally Posted by Stu Jackson View Post
All the marina owners are too busy keeping their properties running to join this discussion.

Oh, and he never got to use his own boat.
The marina owners are generally not cruisers. They might have once been or dreamed of being. It turns into an all consuming occupation.
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Old 27-02-2014, 14:19   #12
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Re: Ever own a marina?

Nanaimo might be a good place. Nanaimo would have to be year round as its more of a stop over point rather than a cruising destination. I saw all the closed ones there last summer and couldn't help but think that there was a need for one. But it seems like the government run one is the 'ideal' one to stay at as only the 'government' can afford all the great amenities and it is in the best location. But I wonder why all the other abondoned ones there went under? Was there no business from the recession, or was it because of all the new environmental costs. I'm sure there is a story behind the downfall of those businesses.

If you are serious, I would contact these people ; Marina Vancouver Island, Licensed Bistro And Store, Spacious Park - Telegraph Harbour Marina, Thetis Island, British Columbia, Canada
They run a great marina out there. Seasonal only and in a good cruising spot.
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Old 27-02-2014, 14:24   #13
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Re: Ever own a marina?

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Must be a "Clean" marina now in many states.
Not true. The Clean Marina program is strictly voluntary, regardless of which state the marina in question happens to be located in.
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Old 27-02-2014, 14:34   #14
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Re: Ever own a marina?

The Public Dock in Nanaimo has had some ups and downs last fee years. There have been a couple marinas that have gotten run down. But lots of new development. The one I'm looking at is run down and would need some work, but it is functioning and has tenants already. Still just a thought right now.

Thanks
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Old 27-02-2014, 14:46   #15
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Re: Ever own a marina?

Are you talking about the one that is about 30 kms south of Nanaimo. I worked at that one for a few years doing part time maintenance. It is presently in recievership and is for sale. It has a lot of potential but also some problems. It hardly ever has available moorage, except in the summer when many of the boats are out cruising.Should have been profitable ,but other problems plagued it.
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