To Lease or Own: A Question on Marina Slips
With the abundance of boats in the Bay Area, we wanted to understand more about the merits of leasing or renting a slip versus owning a slip. Just last year our Latitude-friend Eric Sanford sold his Morgan Heritage, along with the marina slip he’d owned for years. And while the concept of slip ownership is not entirely new, it is something that many of us had not previously considered.
Overnight and long-term berthing both come with a price. And as with most things that have a dollar value, that price invariably increases in accordance with supply and demand, and with general inflation.
Some Bay Area marinas offer boat owners an option to own their marina slip or dock space, just as they can own a condominium. Only in boating terms, boaters have the option to own a ‘dockominium’ — permanent and perpetual ownership of a dock space or slip.
As more and more people take to the water it’s possible that existing marina vacancies will decrease. Add to that a lack of new marina developments and the battle to maintain existing slips, and the prospects of finding a slip for one’s boat could well be diminishing. Plus of course there’s the almost-guaranteed factor of rising rents.
Could ownership be an alternative to slip rental?
Wondering what the actual monthly costs are? This may not be a complete list, but things to consider: Maintenance (slips, docks, buildings, dock workers, office workers, grounds, parking…); Property Tax; Etc. How do these numbers compare to rental fees?
My wife and have owned a 45 foot upwind slip in Emery Cove Yacht Harbor since the mid 90’s. We paid a mere 20K for it then and have been happy slip owners rather than renters ever since. At today’s prices, it is probably worth 60 to 70K, however, we did not buy it as an investment so just like buying a home vs. renting – the worth is meaningless until we decide to sell it. As far as cost of ownership goes that very much depends on the owner’s association’s assessments or some call them monthly dues. Emery Cove is exceptionally well managed and due to the huge dock replacement project the assessments are up to around $360 per month for a slip our size. These are scheduled to come down when the dock replacement costs are complete. We own the slip “fee simple” and it is considered “real property” for tax purposes so we do pay Alameda County real property taxes for the slip in addition to the usual personal property tax for the boat in it. Prop 13 keeps these steady and predicatble with a slight increase every year. Currently they are around $460 per year. So doing the math, that is about $400 hundred per month or $8.89 per foot per month. Hope this helps.
Hi Craig,
would buying a boat slip as an investment, and leasing it to a user, be comparable to owning a condo
and renting it out? Is that practical?
Hi Marv – when I penciled it out the slip never made sense as a buy to rent out investment. Not sure about a condo in todays crazy rental market! In simple math terms if you bought it for 60k then rented it out at current rates less the association fees and real property tax, would that return on investment beat what you could make on the 60k say with a safe return of 5%?