Seeking tips on BUYING a slip - SailNet Community
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post #1 of 18 Old 09-28-2008 Thread Starter
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Seeking tips on BUYING a slip

Greetings,

Longtime lurker, first time poster. I have gotten so much good info from this site in the last 6 months and used it while doing research for a new (to me) boat. I just signed a contract for a '95 Catalina 320. I'm very pleased with the deal, and if all goes well with the survey I will take possession in a week or so.

Today's question: I'm trying to establish if there is some standard correlation between annual slip rental rates and the purchase price of a slip in a condo marina. I'm seeking a slip now and have come across an opportunity to purchase a slip in a marina that I like (was planning to rent).

For example: Let's say a certain marina is a condo setup and 35' slip rentals from owners are running around $2000/year. If an owner has one for sale and asks (or more accurately, gets) $20K for it the rental/sale price ratio would be 10X.

Ultimately, I'm hoping to find some guidance as I have no idea what is a good or bad price for a slip. Some kind of standard correlation range of rental-to-purchase $ would give me a useful frame of reference.

Thanks in advance!
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post #2 of 18 Old 09-28-2008
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Prince-

It really depends on where the slip is located. Some areas will have much higher values for slips than others. Also, another issue is whether there are any on-going fees if you own the slip, compared to when you rent the slip. Like a condominium, if the monthly fees are too high, then ownership is going to be a burden and not really end up saving you much if anything at all.

Would highly recommend you read the post in my signature to help you get the most out of sailnet. It would also help a good deal if you said what geographic region you're looking at buying a slip in.

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post #3 of 18 Old 09-28-2008
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prince,
$2000 a yr for a slip is very reasonable. up here in the northeast, i'm paying about $130/ft. that's from april to nov plus additional fees for winter storage whether in water or on the hard.
i don't have any experience with purchasing a slip but you may want to check into the condo association rules to see if the condo owner can sell their slip separate from the condo.

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post #4 of 18 Old 09-28-2008
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Well condo slips here are going for around 75k (40') and annual rates are $3600 for a 40'..so it is like 20x the annual rate. Most condo slips here are empty as people find that pricing outrageous. I think the pricing is high so they can negotiate or throw a slip in with the purchase of the condo.
The other thing is that while you may own the slip...you then have taxes to pay on it, electric and water are not free and you may be assessed a maintenance fee for the docks. To me...anything over 10x the annual rental does not make any sense.

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post #5 of 18 Old 09-28-2008 Thread Starter
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Thanks, sailingdog & wchevron.

I'm looking for a spot in the Chespeake Bay, probably the western shore. Am avoiding Annapolis because of congestion and high prices. The numbers I used were only examples to illustrate the ratio idea.

I have read the post for newcomers, but the location wouldn't seem to matter to the principle of the rental/purchase price ratio. Of course slip fees are much higher in some places than others, and so it follows that the purchase price of a condo slip would also be higher. It seems to me, though, that those numbers should still have some correlation (but I can see how condo fees might impact the value of a slip).

Researching slip rental rates is relatively easy compared to slip purchase prices, so I'm just trying to wade through this to try to get a handle on it.

Last edited by PrinceBuster; 09-28-2008 at 11:29 AM. Reason: typo
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post #6 of 18 Old 09-28-2008 Thread Starter
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Quote:
Originally Posted by camaraderie View Post
Well condo slips here are going for around 75k (40') and annual rates are $3600 for a 40'..so it is like 20x the annual rate. Most condo slips here are empty as people find that pricing outrageous. I think the pricing is high so they can negotiate or throw a slip in with the purchase of the condo.
The other thing is that while you may own the slip...you then have taxes to pay on it, electric and water are not free and you may be assessed a maintenance fee for the docks. To me...anything over 10x the annual rental does not make any sense.
Thanks, camaraderie. That kind of info that helps greatly.

My gut reaction to 20X is the same -- ridiculous. Even 10X might be high, depending on the other costs that you mentioned (fees, taxes, etc.). I'm hoping to be able to do the math and see what makes sense.
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post #7 of 18 Old 09-28-2008
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We wont be able to answer that any more accurately then your own research will find out unfortunately..Last year one that size In Anacortes area was 100K...I would guess 500K to 1 Mill in lake Union in Seattle.

If you live next to the rich and infamous or a densely populated and desirable location the price will be adjusted accordingly.

If you have deep pockets waterfront investments are seldom if ever a poor one.. over the long term..

There may be others here in your area that might know for sure but in my mind this is an almost impossible commodity to put a blanket number on.

Sure would be cool to own your own slip though...Are there maintenance dues involved with this type of set up..What if it needs dredging or new floats of pilings or________....is there an association to pay into for these ongoing maintenance issues...if its say 300.00 per month that sort of takes away a lot of benefits to owning and forking over 200K when that 200K could be working for you....(or slipping away from you as in this curent market)..so that boils down to doing your research on what these slips were going for 8 to 10 years ago because thats about what they will apreciate again in 10 to 15 conservatively speaking so it might out perform anything else your money could do irregardless of upkeep type expenses..Are there Tax's on owing a Slip?..Different Ins. requirements? ..thoes are something to consider to.

Edit...Well you can see how long it takes for me to hunt and peck out my thoughts ..you had no posts when I started......sorry for all the duplicate info.

Last edited by Stillraining; 09-28-2008 at 11:37 AM.
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post #8 of 18 Old 09-28-2008
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My marina in Longport NJ has over 40 slips for sale. Prices are outrageous, ranging from $140k to $175k for a 50' slip. Condo fees and taxes are close to $3,500 per year currently and they probably will go up. No one is buying at those prices because it just makes no sense.
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post #9 of 18 Old 09-28-2008
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Cam- may have over looked something. Yes, you are likely to have assoc. fees, taxes, maintainence fees, etc..., but at the end of the day you will still own an asset the is likely to increase in value over time. Additionally, you can always sell it anywhere along the line if you choose/need to and recover you purchase money. If you have the cash to put down for the purchase, I would be more concerned with the yearly cost difference between the total of all the fees and taxes and the rental rates. If you save 5-10% per year in slip costs, that is a better return on your investment than you are going to get anywhere else.
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post #10 of 18 Old 09-28-2008
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Given what today's market is like, unless you buy it a pretty low price, it is likely that its value will drop before it starts to rise.

Quote:
Originally Posted by T34C View Post
Cam- may have over looked something. Yes, you are likely to have assoc. fees, taxes, maintainence fees, etc..., but at the end of the day you will still own an asset the is likely to increase in value over time. Additionally, you can always sell it anywhere along the line if you choose/need to and recover you purchase money. If you have the cash to put down for the purchase, I would be more concerned with the yearly cost difference between the total of all the fees and taxes and the rental rates. If you save 5-10% per year in slip costs, that is a better return on your investment than you are going to get anywhere else.

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her going when she oughta fall down, tells you she's hurting 'fore she keens. Makes her a home.

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