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Old 07-13-2012
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Boat slip value?

I'm interested in purchasing a boat slip in clearwater (tampa) florida. The slip is located in a gated condo association. There are from 300 to 600 unit total and only 60 slips.

I saw a slip with a lift sold for 15,000 a couple months ago.

I am looking at a slip with out a lift. She wants 15,000 obo. I offered her 9000.

She told me she changed her mind about selling. Then the next day asked if I would raise my offer.

With out a lift it makes it super hard to find a renter for the slip. Only people who live there can rent. I want it to put either a sail boat or a big old cheap cruiser, in a couple years.

I think its like $80 a month with fees and taxes.

I think the bridge hight is only 47 ft and maybe the max daft is 4.5.

What do you guys think?
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Old 07-13-2012
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Re: Boat slip value?

A slip (or condo, or house, or whatever piece of real estate) is worth what it can rent for. Try to find out what the gross rent multipler is in the area...in a healthy market, its usually 80 - 100 times monthly gross income:

$80/mo gross income x 80 grm = $6400. Thats the value of the slip if you believe in GRM. You can also use capitalization rate and other rental tips.

10-Year Investment in Real Estate Calculator

*IF* $80 a month is all you can get for the slip for rental on the open market, then to me its worth no more than $6500
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Re: Boat slip value?

Wow, thats a very interesting point of view.
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Re: Boat slip value?

When I said $80 a month with taxes and fee's I mean that is my cost as the owner per month. That includes taxes, and fees the the boat association. That included water and electric as well.

I see some with a lift rent for $125 a month. But I figured, being as its hard to find a renter for a slip with out a lift. Finding someone to cover my costs $80 a month would be nice.
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Old 07-14-2012
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Don't forget the cost of money. That's the difference between your 80 and their 120.
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Old 07-14-2012
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Re: Boat slip value?

OvO would you care to elaborate?

I'm not sure I understand.
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Old 07-15-2012
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Re: Boat slip value?

I think my spreadsheet accounts for the cost of money. Basically, if you were to buy this slip for $6500, well that money could have been working for you in the stock market or some other investment. That means you buying that slip should (when sold) exceed that rate of return...so its important for your cap rate to exceed what you could get in terms of risk free rate of return.
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Old 07-15-2012
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Re: Boat slip value?

Mathematically, it is a comparison of the net present value of cash. You take paying rent every month, into perpetuity, and compare it against paying an upfront purchase price and a smaller amount each month or year for maintenance, insurance or whatever else. You discount the cash back to today's dollars, and the upfront cash that breaks-even is theoretically the value. Its get squishy when you have to pick a discount rate, which is arguably very low in the near term (raising the breakeven), but should normalize over the long term.

But there is another intangible. Owner occupied homes, for example, typically sell for more than the above math would suggest. Why? Because there is an emotional attachment to them, people need a place to live and the convenience of a particular home to their work or being in a desire school district have incremental value. The math can also be impacted by a disconnect in the supply and demand of renting vs. owning. If more people want to own, the cost to buy will be higher than the break-even to renting and vice versa. A boat slip would be impacted by similar intangibles.

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