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Old 03-10-2010, 18:36   #1
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Question Marina Slip Purchase as Investment

I'm thinking of purchasing a slip from a marina as an investment to rent out to my fellow mariners. I'm hoping to solicit thoughts about the wisdom of doing this from the cruising community.

At first glance, it doesn't seem to be a very promising proposition. Takes many years to pay off the initial investment and there's even-less guarantee that the price of the slip (either purchase or rental) will rise over time as most real estate typically does (ignore the last 2-3 years ). The place I'm looking at sells them like condos, so there are monthly dues, tax, but it's not a long-term lease that expires in X years. as is the case w/ some marinas.

Does anyone do this?
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Old 03-10-2010, 19:35   #2
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It is an idea whose time has gone.......

The condo fees will eat you up....and how do you build equity?
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Old 03-10-2010, 19:39   #3
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A friend once told me.... "George if you want to become a millionaire in the marina business, the easiest way is to start out with 2 million"
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Old 03-10-2010, 19:44   #4
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A friend once told me.... "George if you want to become a millionaire in the marina business, the easiest way is to start out with 2 million"
It's the same in skydiving. If you want to make a small fortune start out with a large one.
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Old 03-10-2010, 22:05   #5
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A condo slip can make sense if it's priced at or close to what it would cost to lease a slip. The price is the key. I've seriously looked at buying a slip in Gig Harbor Washington but decided against it because they were just too damned pricey. Couldn't justify tieing up some one else's money and making payments on it at nearly a 1/3rd more than what I could rent a slip for. There is the probability of appreciation as the cost and regulations of building marinas is becoming prohibitive so the supply will not be going up significantly. Still, the cost of a leased slip would have to double to make owning these $100,000 condo slips reasonable.
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Old 03-10-2010, 23:59   #6
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It works in Australia (well my part anyway) as a capital growth investment for a number of reasons, but less so as an income stream. Chief amongst the reasons is the ability to write the purchase price off by 10% a year for ten years, this of course is helpful if you are still working and has the effect of reducing your tax at your mariginal rate. Best case secnario is that the govt will pay off nearly half for you.
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Old 04-10-2010, 00:08   #7
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As a slip renter, I shied away from a condo-ized setting upon realizing that moving, should I wish to do so for any reason (bad neighbors, wind exposure, access challenges...) would be difficult. And there seemed to be a strange secretive dynamic among the various owners, with few willing to be open about the price, instead probing to see what others had quoted. I know I'm only replying from the "customer" perspective, but I found it a bit off-putting.
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Old 04-10-2010, 03:27   #8
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One thing I wish I could buy is a mooring. However at least in southern California the direction has been to free them up and specifically not let new ones get sold and to let all the "25 year leases" expire. It allowed too many derelict boats to sit on $100/month moorings (or simply go empty) while lots of active owners with seaworthy vessels were/are stuck paying $1000/month at a marina.

If anyone knows of a place where I can buy a mooring ball in San Diego or get an extended lease, please let me know.
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Old 04-10-2010, 10:45   #9
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Correct me if I'm wrong..but I looked at it near Longboat Key and was advised if I bought a slip, I would also have to pay property tax...I laughed and bid a due.
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Old 04-10-2010, 12:52   #10
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Correct me if I'm wrong...
... I laughed and bid a due.
Did you mean to bid Adieu, as in Adiós, Goodbye or Farewell; rather than tender an offer of a due (by two)?l
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Old 04-10-2010, 13:07   #11
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LOL..yes Gordy...thanks for correcting my French?
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Old 04-10-2010, 13:13   #12
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LOL..yes Gordy...thanks for correcting my French?
You're welcome Chiefy.
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Old 04-10-2010, 13:23   #13
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The value of any investment and especially this type is entirely dependent on risk. You know the risk of buying a city block in Manhattan for market value is minimal with potential for significant reward. Unless you are sure of the potential of a dock which obviously can't be anticipated making it a high risk investment, it makes no sense to me.

I'd be interested to hear how someone would rationalize this as a good investment.
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Old 04-10-2010, 13:52   #14
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I would agree with the fact that if you are able to purchase the slip outright with no bank financing, and use it for yourself for a while or half the year, it makes sense.. Otherwise, making payments on an ever losing proposition is just silly and makes NO business sense.. It's like owing a house and renting it to someone else so you can rent an apartment.. A$$ backwards...
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Old 04-10-2010, 14:18   #15
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Since I manged a condo marina for a few years I think I can say, it is a terrible investment if you are buying it to rent the slip. The condo association will take a chunk of the slip rental in fees. The renter will have to comply to all condo rules which are usually much stricter than marinas, so most will only rent at condos for short term. If the slip is in a seasonal area, you will only rent part of the time. With a condo slip comes condo association fees, assessments for repairs, which can run in the thousands of dollars and both you and your renter will have to deal with condo slip owners that don't like having a non owner next door. And these are just a few things off the top of my head. Chuck
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