Dock ownership. Pros and cons?

[bmiller]

As my retirement horizon is now in single digit years it's time to do some planning. Currently I live in a small town in the central mountains of Colorado, Buena Vista, this will always be my home. The plan, in it's present form, is to have a 38-40 foot sailboat slipped someplace warm for cruising and as a second home.
The question now is to own or lease dock space. What are the pros and cons of owning a dock? What are the real life expenses?
Does it make more sense to get a long term lease? The greatest advantage to a lease I see is mobility. What if we tire of the area we are currently docked?
The next question is where? Gulf Coast, Mexico, SE Florida, a little further north on the Eastern Seaboard? California?

[Pblais]

I own my dock as part of a home owners association. So actually I just own a right to use the slip. Far better to not really, own the dock. A wooden dock in salt water will last no more than 25 years ythen need to be totally replaced. To replace it you need to rip out all the water and electrical.

Fo me that means in about 12 years we need to rebuild the whole marina. For 26 slips the electrical work will be about $100,000. and the dock about $200,000 plus small extras. So that works out to about $12,000 for a 25 year slip assuming no land costs. Non wooden floating slips might run more like $19,000. These are cost figures and anyone selling them would expect profit and commissions and there needs to be a parking loat and other shore amenities to actually be able to sell slips. Owning a slip is not what you want a very long term lease or "right to use" is really what you might prefer.

If you are going to be absent much of the time a real marina slip will include some security and someone to at least notice if some goes wrong. They may actually make efforts to call you and repair problems and perform maintenance. A boat in salt water needs maintenance even if you never take it out but a few times per year. The facts are it is not much less than if you used it all the time.

I would compare slip prices with lease prices and see how the $$$ work out being mindfull that a leaased slip is not always a full service marina and for an absent owner it may prove worth the cost to lease in a full marina.

Slip rates are all over the price range. Some loactions have no slips for sale and a multi year waiting list for an expensive slip to lease. Where you choose does matter. Renting out a slip you own to a 3rd party is a legal issue you should get expert advice on. In my case it is illegal under state law and restricted by deed covenants.

[hellosailor]

There are also "dock-o-minium" associations, where the docks and the entire facility are owned as a condominium association so that each owner "owns" one slip, or the right to use that space, sell it, etc., but the association is responsible for the upkeep, parking lot, security, etc.

The mixed blessing there of course is any "condo" ownership means there are a hundred landlords instead of one, and if your neighbors decide to go cheap--or go lavish<G>--you're stuck living with that.

The advantage to owning is in theory the same as with owning real estate on shore, in that waterfront property values "always" will go up (nice theory) and that when you sell you will be able to do so at a profit. Where a lease, any lease, is probably going to jump when the term is up. And again, you're stuck dealing with the landlord.

A lot depends on who you are dealing with, on state laws, and on how well you've made the investment.

I'd certainly agree with Paul, you want expert legal advice, and leaving a boat in wet storage for long periods of time is not going to be a good idea.

[Sunspot Baby]

Ownership Pros :
Assured dock space.
Recoverable asset if not investment.
Some level of control over condition, maintenance, and cost.

Cons:
Locked into one location.
Responsible for maintenance.
You have it all the time, instead of only paying for the portion of the year you’re using it.

Replacement cost is a factor whether you own, rent, lease. The landlord is going to charge enough rent to cover the costs.

Dock space in desirable areas quickly becomes hard to get and expensive to rent. Ownership caps those market forces.

I considered ownership and then rented. So far I have been able to rent only the 6 months or so we are back in the US. That keeps the cost lower. Next year I may either have to commit to a full year rental or move to another marina since the one I am in now is full now.

I also considered water front property with my own dock. At current rental rates, I can rent until I die and not spend as much as the price difference for waterfront property without considering the cost of building the dock and maintaining it.

Since it sounds like you don’t plan to live near the boat and thus won’t use it in the off season, consider storing it on the hard. You’re probably going haul it once a year for bottom painting and/or other maintenance. Yard space is often less expensive than dockage.

[Pblais]

The dock-o-minimum really is the only way you can own a slip unless you build your own. Being the dockmaster where we live means 26 ownwers but with rare exception any modification made by one owner screwed things up and you need a common set of people doing all the work and making sure it's done right.

Maintenance on the dock is a lot of work and you need that done professionally. So I like the idea of the docl-o-minium as that is essentially what we have here. We just all live together in the same subdivision and association dues pay the whole thing - until we rebuild.

Yacht clubs are the next best thing since you are a member of a club that owns the dock and they charge member rates that don't need to be as profitable.

As far as appreciation goes, the location can appreciate dramatically. Waterfront real estate is soaring still after the latest down turn. Docks however like boats are a money pit. Salt water stuctures are expensive to maintain no matter what system is used so on going costs do go up. Buying into a club or assocaition at least helps flatten out the bumps.

The trend however is not for dock-o-minumis. The trend is to build water front housing condos with an association marina built in to it. You can make a whole lot more money selling homes with a dock than to just sell the dock. Private marinas are disappearing quickly with these conversions. Where we live I know of no dock association where you could buy a slip alone. I had a neighbor back in Minneapolis that bought a dock in Bayfield, WI on Lake Superior for $13,000 plus maint. fees. Compared to other prices it was a great deal. I saw a 15 year lease arrangement in Puerto Vallarta last week that wasn't too bad. I think it was $60,000 for 15 years. Slips are hard to find there for larger boats.

[hellosailor]

<Ownership Pros :
...
Recoverable asset if not investment.>

Not necessarily, in theory the value always gos up but many people have bought property during a boom, only to find they can't get back more than 2/3 of it ten years later. After payin taxes and whatever, too.

Then there are also liability issues, the gods seem to favor the litigious these days. "My fiance's parachute failed to open and she hit your dock and got killed, if you hadn't built a dock there she would have been OK". (Which one of the Greeks was killed when an eagle mistook his bald head for a rock and dropped a tortoise on him? Aristophenes?)

[Pura Vida]

Recently I looked into purchasing a dock space but decided not to for the following reasons (most already covered):

It was cost prohibitive compared to renting a slip with a maintenance fee that was almost as much as a slip fee after purchasing the space.

Flexibility in location was severely limited. Once I was in a slip it was MY slip and the guy next to me had HIS slip and we may not get along.

As an investment I was concerned that by the time I came to sell the place would be silted in or have some other problem that would make it hard to sell.

Finally, I'm going cruising in two years and do not want to have to keep making payments or find a renter.


Anyway one word of advice after spending a couple of months looking at most of the marinas around Galveston Bay. Get out among the boaters at the marina you think you might like and tell the folks you meet you are thinking about moving to that marina. Then ask how they like the management. If they say "well, they are OK" then look for another place. A good harbor master and leasing agent will make the difference in the marina and most of the boat owners will refer to them enthusiastically. Everything gets laid at their doorstep from bad planking on the dock to clean restrooms and grounds. A bad management team may get a good review simply because people are polite. best of luck

[CaptainRic]

I live on the east coast of Florida and it is true that many marinas are being bought by developers who then construct condos that you may also purchase a slip with. The one I looked at was $1,000,000 plus. There are also some true dockominiums going up. See www.cocoavillagemarina.com for an example.

I want to find a small easily maintained home with a big dock so I have a place to live and put a boat between expeditions.

[seafox]

I bought my Marina berth in 2003 for $50,000. I have paid an average of $350 per year operating costs since. It is 12 metres. They are now selling for $75,000.
Rents 3 years ago were $200 per month ($2400 per annum) for a 12 metre
Now they have gone up to $300 per month ($3600 per annum)
I have lost $7500 net interest on my 50k over the 3 years and paid 1k in operating expenses. If I sold my berth for $75k and deducted the lost interest and expenses I am $16,500 in credit.
If I had rented, I would have paid $9,000 rent although I would have kept the $7500 interest on the 50k, Overall a $1,500 loss.
Owning has been better for me so far.

[seafox]

http://www.manacc.co.nz/ has a photo of our marina.

[Tropic Cat]

Unfortunately that marina in Cocoa, FL won't survive the next 'near miss' hurricane that comes our way. It's on the wrong side of the river.

I wonder what you actually 'buy' for 100 grand? I also wonder who rebuilds your slip when hurricane XXX destroys it?

Rick in Florida

[keelbolts]

When I had the chance to buy, I passed. I draw 6' and here on the Chesapeake things silt in from time to time. There was no guarantee of water depth. So I buy a 4 bedroom house, but it may be 2 bedrooms next year? It just didn't work for me.

[bmiller]

Thank you for all the insight. I still have lots to think about. Good points both ways.
This looks interesting:
http://www.charlestonwetslip.com/index-1.html

[Pblais]

I wonder what you actually 'buy' for 100 grand? I also wonder who rebuilds your slip when hurricane XXX destroys it?

Unless you have flood insurance - no one. Wood docks run about $16,000 floating about $20,000. We don't have flood coverage and we can't even buy it here. Being in VA we are out of the worst zone and we still can't buy it. Fire we are are covered but not flood. A dock flooded for any period of time is toast. The boards float and the electric floods.

Buying into a dock is about one thing - the money. There isn't anything else so don't let other issues cloud your judgement. Mine is down the street and I walk to it so that is a plus. It came with the house so I didn't buy it directly. I like it so I use it.

If you have to drive in the car to get there then just do the math. In our area belonging to our yacht club would be cheaper.

[Vasco]

bmiller,

Ashley Marina's docks seem a bit pricey and on top of that you can't even get a boat with a 60 ft. stick up there.