Boat Slips: A Smart Investment Move?

With the world's population increasing and more baby boomers retiring, boat ownership is on the rise, and available options for parking boats are decreasing. This has led to a growing demand for boat slips, especially for large boats. Boat slips can be a good investment opportunity, but there are a few factors to consider, such as the type of slip, location, size, amenities, and fees. In this paragraph, we will explore the key considerations for investing in boat slips and discuss the potential risks and rewards.

Renting vs. buying a boat slip

Renting or buying a boat slip is a big decision that requires careful consideration. Here are some key factors to help you decide whether renting or buying a boat slip is the better option for you:

Cost

Boat slip prices vary depending on location and demand. In some areas, boat slips are reasonably priced or even underpriced, while in other areas with high demand, purchasing a boat slip can be a significant financial investment. Consider your budget and research the market to determine if renting or buying aligns with your financial goals.

Permanence

If you plan to stay in the same location for an extended period, buying a boat slip can be a good choice. It allows you to build equity, and your investment may appreciate over time. Buying also protects you from rising costs if demand for slips in your area increases. On the other hand, if you're unsure about your long-term plans or prefer more flexibility, renting may be more suitable.

Location

The location of your boat dock is another crucial factor. Consider whether you prefer a dock closer to open water or one located at the front of the marina. Public docks tend to be more affordable but may offer lower security as they are often accessible to everyone. Private marinas provide better security but usually come at a higher cost. Evaluate your priorities and the available options in your desired location.

Convenience and Amenities

The convenience and amenities offered by the boat slip can also influence your decision. Wet docks, for example, provide easier access to your boat but are generally more expensive than dry docks. Consider the amenities you require, such as electrical hook-ups, clean water, security, and nearby shopping options. These factors can impact the overall experience and cost of your chosen boat slip.

Scarcity

Evaluate the scarcity of boat slips in your desired area. If slips rarely become available, purchasing one when the opportunity arises may be wise. However, if slips frequently come up for sale, you may have more flexibility to wait and consider your options.

Remember, the right choice depends on your unique circumstances, the market, and the availability in your preferred location. Carefully weigh the advantages and disadvantages of both renting and buying before making your decision.

The type of slip: dry or wet

There are two main types of boat slips: dry slips and wet slips. A dry slip, or "rackominium", is when a boat is stored in a rack in a building on land. This is similar to RV storage, freeing up space and preventing the vehicle from becoming an eyesore. A wet slip, or "dockominium", is when a boat is parked dockside in the water. These can range from concrete docks to marinas or clubs with extensive amenities such as restaurants, golf courses, and swimming pools.

Dry slips are typically used for storing boats during the off-season or when they are not in use for long periods. Indoor storage units are preferred for dry slips as they provide the ultimate protection from the elements, thieves, and vandals. However, there is also \"rack storage", where boats are housed in a slotted tier system within a covered and secure structure. This type of dry slip requires an oversized forklift to move the boat in and out, which can be inconvenient if you want to use your boat frequently.

Wet slips, on the other hand, offer ready access to your boat. They can vary from simple open docks to covered structures that protect your vessel from the sun, rain, and other elements. Wet slips also come in a variety of sizes to accommodate boats of different magnitudes. Additionally, wet slips located in deeper parts of a lake can provide consistent access to your boat, even during rapid changes in water levels.

When investing in boat slips, it's important to consider the type of slip, location, size, available amenities, fees, and other factors that comprise its value. Dry slips may be more suitable for those who boat infrequently, while wet slips offer the convenience of quick access for those who want to climb aboard and leave without delay.

The demand for boat slips

Demand for boat slips is increasing. According to the Insurance Journal, one in three Americans takes part in some form of boating each year. This demand is driven by the growing global population, the increasing number of retirees, and the rising popularity of boat ownership.

The type, location, size, and amenities of a slip also impact its demand. For example, wet slips, or "dockominiums", are in high demand for larger boats, as they offer more space and extensive amenities like restaurants, golf courses, and swimming pools. On the other hand, dry slips, or "rackominiums", are more protected from weather issues and are often cheaper, making them a more affordable option for boat owners.

The convenience and necessity of a boat slip drive the market. Boat owners are willing to pay for a slip that is well-located, secure, and offers the necessary amenities. Additionally, the scarcity of available slips in certain areas can increase demand and drive up prices. For example, Florida is losing 2,500 slips per year due to waterfront development, leading to a potential shortage of slips for boat owners in the state.

Demand for boat slips is also influenced by the lifestyle and community associated with boating. For example, in a marina community geared towards retirees and vacationers, the demand for boat slips is likely to be higher, as residents seek to enjoy the boating lifestyle near their homes.

Overall, the increasing demand for boat slips presents an intriguing opportunity for investors, especially in regions with high demand and limited supply.

The cost of a boat slip

Location

The location of the marina plays a significant role in determining the cost of a boat slip. Marinas located in high-demand areas tend to be more expensive than those in less popular regions. For instance, slips in Miami, Florida, a hotspot for boating, can range from $20 to $35 per foot per month. In contrast, a marina in Glen Burnie, Maryland, may offer more affordable options, with prices ranging from $20 to $30 per foot per month.

Size

The size of the boat slip is another crucial factor in determining its cost. Larger slips, typically accommodating bigger boats, tend to be more expensive. For example, a 50-foot slip in Miami, Florida, can cost upwards of $1,750 per month, while a 20-foot slip in the same area may be around $750 per month. Similarly, in Chicago, Illinois, a 50-foot slip can range from $750 to $2,500 per month, whereas a 20-foot slip might be between $300 and $1,000 per month.

Amenities and services

The amenities and services offered at the marina or boat slip facility also impact the overall cost. Some marinas provide additional services such as water, electricity, sanitation, maintenance, and nearby restaurants at an extra charge. These conveniences may be included in the overall boat slip cost at some locations, while others charge separately for them. It is essential to consider which services are required and how they are priced when comparing different marinas.

Seasonal variations

Boat slip prices can also vary depending on the season. For example, docking a 25-foot boat in the winter may cost around $2,500, while the same slip in the summer could be as much as $4,000. Therefore, it is more cost-effective to dock during the off-season if possible.

Additional costs

When budgeting for a boat slip, it is important to consider the additional costs associated with boat ownership. These can include boat maintenance, insurance, utility fees, and liveaboard fees. Boat maintenance fees can cover engine tune-ups, hull cleaning, and potential repairs, with costs varying depending on the boat's size, age, and condition. Utility fees may be charged by the marina to cover water, sewage, and electricity usage. Liveaboard fees are typically higher for boaters who live on their boats due to the increased expenses for utilities and other services.

The value of a boat slip

Boat slips are seeing rising demand, especially for large boats. This is due to a number of factors, including an increase in boat ownership, a decrease in available parking options, and the conversion of marinas into real estate developments. This limited supply and increasing demand make boat slips an intriguing opportunity for investors.

When considering the value of a boat slip, it's important to look at the market and what is available in the area. In some parts of the United States, boat slips are reasonably priced or even under-priced, while in other areas with high demand, buying a boat slip can be a large expenditure. It's also worth considering the potential for rental income if you don't plan on using the slip yourself, as this can offset some of the costs associated with ownership.

Another factor that can affect the value of a boat slip is the convenience and lifestyle it offers. For example, if you live in a marina community, owning a boat slip can provide easy access to the water and enhance your enjoyment of the community. This can be a significant factor for retirees and vacationers who prioritize leisure activities.

Lastly, it's important to consider the potential for future appreciation in the value of the boat slip. While there may be some short-term fluctuations, the long-term trend is likely to be positive due to the limited supply and increasing demand for boat slips. However, it's always a good idea to do your own research and market analysis before making any investment decisions.

Frequently asked questions