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    Boat slips as investment?

    What do you all think about buying up boat slips and renting them out as investments? I own a bunch of rental houses and I own the slip my Meridian is parked in... and I was thinking how easy it would be to manage slips as an investment. It would be out of sight, out of mind for the most part but the CAP rate would be low. What about appreciation? Seems to me slips have not gone up much at all in the last 10 years or so, but with population growth coupled with no new marinas make me think that eventually demand will increase at an accelerated rate above the supply and therefore increase the value of slips. Any other thought about this?
    1995 Bayliner 2452 Mercruiser 5.7L Alpha 1 Gen 2

    #2
    Location Location Location. Don't know where you are but Lake Union is supposed to lose 500 slips next year. At least that was a plan before Paul Allen passed.
    Ted G
    The Great PNW

    86 2850 Contessa SB
    Designers Edition
    Mercury 350 Mag
    290 Volvo DP

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      #3
      Like any invenstment you need to look at where you are going to make your money.

      Is it in the rent vs Debt cost?
      Is it in selling the apreciated assett down the road?
      Or a little of both?

      From a boaters prespective I have never understood the cost/benefits of owning a condo slip. The ones I am familiar with have a rather high capital cost, coupled with a HOA fee that seems at least to me to rival what I could just rent a slip at a harbor for.

      KEVIN SANDERS
      4788 LISAS WAY - SEWARD ALASKA

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        #4
        Originally posted by ksanders View Post
        Like any invenstment you need to look at where you are going to make your money.

        Is it in the rent vs Debt cost?
        Is it in selling the apreciated assett down the road?
        Or a little of both?

        From a boaters prespective I have never understood the cost/benefits of owning a condo slip. The ones I am familiar with have a rather high capital cost, coupled with a HOA fee that seems at least to me to rival what I could just rent a slip at a harbor for.
        True, I did tie up a lot of cash on my slip... but with the assumption that I'll sell it for at least what I paid for it, simple math shows that I'll come out ahead vs leasing. That coupled with never having to worry about finding a new, good, slip (mine is perfect) makes it well worth it. The only real cost that is discouraging to me is the opportunity cost... as I could have invested that money into more rental houses and used those profits to offset a slip lease. Oh well, no clear winner... so the stability of owning is what put me over the top. I hope the lack of slip space in the Anacortes area drives up demand before I sell in the distant future!

        As for the slip for investment, there's no money to be made in rent vs debt cost... and if you pay all or mostly cash then you're getting killed by opportunity cost. Slips as investments must be all about appreciation and building equity.
        1995 Bayliner 2452 Mercruiser 5.7L Alpha 1 Gen 2

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          #5
          Originally posted by Fishtank View Post

          True, I did tie up a lot of cash on my slip... but with the assumption that I'll sell it for at least what I paid for it, simple math shows that I'll come out ahead vs leasing. That coupled with never having to worry about finding a new, good, slip (mine is perfect) makes it well worth it. The only real cost that is discouraging to me is the opportunity cost... as I could have invested that money into more rental houses and used those profits to offset a slip lease. Oh well, no clear winner... so the stability of owning is what put me over the top. I hope the lack of slip space in the Anacortes area drives up demand before I sell in the distant future!

          As for the slip for investment, there's no money to be made in rent vs debt cost... and if you pay all or mostly cash then you're getting killed by opportunity cost. Slips as investments must be all about appreciation and building equity.
          I’m not in the investing business but...

          It seems to me that if one could borrow money at a lower rate than the gains realized from investing thsat same money then it would make sense to use borrowed money.

          Your idea of owning a slip Vs leasing makes sense as long as the HOA fees cover eventual float replacement (floats have a limited lifespan), and that those HOA fees plus the value of your capital result in a lower cost than leasing the same slip, assuming a stable slip selling price.

          Then you also get into happiness factor. I like being in a slip at a public marina with fishing boats, and transient boats coming and going. To me harbor life is interesting because of those things. I do not know if private marinas are as active as a municipal marina, which at least to me might not be as much fun.

          KEVIN SANDERS
          4788 LISAS WAY - SEWARD ALASKA

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            #6
            Originally posted by ksanders View Post

            I’m not in the investing business but...

            It seems to me that if one could borrow money at a lower rate than the gains realized from investing thsat same money then it would make sense to use borrowed money.

            Your idea of owning a slip Vs leasing makes sense as long as the HOA fees cover eventual float replacement (floats have a limited lifespan), and that those HOA fees plus the value of your capital result in a lower cost than leasing the same slip, assuming a stable slip selling price.

            Then you also get into happiness factor. I like being in a slip at a public marina with fishing boats, and transient boats coming and going. To me harbor life is interesting because of those things. I do not know if private marinas are as active as a municipal marina, which at least to me might not be as much fun.
            That's essentially what I did - leveraged borrowed money at an extremely low rate... but still a fair chunk of cash was involved. You're right about the HOA. Luckily mine is extremely well managed. This is something that is incredibly important to vet before purchasing any slip!

            Although my marina is private, it's very large and there's plenty of "boat life" to be seen. I like that my neighbors don't tend to be transient as it's nice to get to know folks on the docks... and we have each other's backs and help each other out. That said, the public marina in town is also awesome and I'm sure I'd like it there to. More than anything, I just like knowing I'll have my nice wide, wind-assisted slip with a ton of fairway to get situated on those windy days.
            1995 Bayliner 2452 Mercruiser 5.7L Alpha 1 Gen 2

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              #7
              True, I did tie up a lot of cash on my slip... but with the assumption that I'll sell it for at least what I paid for it, simple math shows that I'll come out ahead vs leasing.
              The gain appears to be short.............. I would use my capital to buy another rental house.
              Rick E. Gresham, Oregon
              2850 Bounty Sedan Flybridge model
              Twin 280 HP 5.7's w/ Closed Cooling
              Volvo Penta DuoProp Drives
              Kohler 4 CZ Gen Set

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                #8
                At Semiahmoo marina people can’t give their slips away for free. You buy them, but you still have to pay over $200 month like an hoa fee. Meanwhile, other side of the bay at Blaine marina, you just rent your slips starting at around $200 month and just walk away when you sell your boat.

                I also dont see any tax benefits to owning a slip. With rental properties everything I buy at Home Depot is tax deductible. Not to mention flights, rental cars, food etc. whenever I go on a trip to do “maintenance” on vacation rentals.
                Now maybe if you have a boat in the slip and you VRBO it.
                Esteban
                B-ham!
                Former Bayliners 3218, 2859, 2252, 1952

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                  #9
                  At Semiahmoo marina people can’t give their slips away for free. You buy them, but you still have to pay over $200 month like an hoa fee. Meanwhile, other side of the bay at Blaine marina, you just rent your slips starting at around $200 month and just walk away when you sell your boat.

                  I also dont see any tax benefits to owning a slip. With rental properties everything I buy at Home Depot is tax deductible. Not to mention flights, rental cars, food etc. whenever I go on a trip to do “maintenance” on vacation rentals.
                  Now maybe if you have a boat in the slip and you VRBO it.
                  Esteban
                  B-ham!
                  Former Bayliners 3218, 2859, 2252, 1952

                  Comment


                    #10
                    Originally posted by green650 View Post
                    At Semiahmoo marina people can’t give their slips away for free. You buy them, but you still have to pay over $200 month like an hoa fee. Meanwhile, other side of the bay at Blaine marina, you just rent your slips starting at around $200 month and just walk away when you sell your boat.

                    I also dont see any tax benefits to owning a slip. With rental properties everything I buy at Home Depot is tax deductible. Not to mention flights, rental cars, food etc. whenever I go on a trip to do “maintenance” on vacation rentals.
                    Now maybe if you have a boat in the slip and you VRBO it.
                    While some of what you say is true about some Semiahmoo slips is true .. folks do buy and sell slips all the time -- sometimes at a profit, sometimes not and many rent them until they are sold. I agree its not an investment ( hey its related to boating) -- for those that purchased at the wrong time some have seen significant losses.

                    Some other factors to consider are how long you plan on staying there, how much time you actually stay on your boat at the Marina (vs just storing your boat there and using it) etc as the Owners get to vote and the HOA is owner run. The nicer slips in key locations sell quickly -- especially the larger ones as they rent easy as well. I have seen many folks rent first, and then buy when a deal comes up at a desirable location. I would not buy until you have been there awhile, then be happy if you come out even.
                    Althea -- 2000 3988 270 Cummins
                    Semiahmoo, WA

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