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I recently purchased a home in a marina community geared towards retirees and vacationers. There’s a small active marina in the community and many homeowners own boat slips. Our home did not come with a boat slip and my plan was to purchase a slip and a boat in the next few years as I get ready for retirement. A boat slip just became available in my community and I’m not sure if I should consider purchasing it now. On one hand, I know I plan to buy one and this will guarantee a good slip and protect me from price appreciation. On the other hand, I’ll be paying tax and BoA fees and I’m not sure if it will hold value.
Also this slip was put up for sale by a neighbor, are realtors generally used in these transactions? Is there anything else I need to be mindful of?
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Nick's Response
Good questions. The short answer is that no, the slip is probably not a “good investment” in terms of whether it will beat other investment instruments where you could put your money, or whether it will even necessarily pay you back on resale.
As to your second question, assuming that the cost is less than $50K (I’m not sure what something like this would cost in your community) and the typical value of these sales falls within a certain known price band, your best bet here is to handle the sale via lawyers unless the community happens to have a Realtor who specializes there and charges a flat rate for this.
That said, there are a few factors that are worth noting here:
Context – This is a community geared towards retirees and vacationers. This will raise the value of the slip, since there will always be some demand for them among people interested in that community.
Package Deal – If the slip can be sold with your home in the area one day, it will increase the speed of sale of both; it broadens the potential buyer pool for your home to people who have boats and can give it an edge over competing properties down the line.
Rent – If you’re able to rent out the slip for any years/months that you’re not using it, there’s value there as well, both for your ongoing income and for resale because of the potential.
Scarcity – How often do these come up for sale? If 5-10 come up for sale every year, they’re less valuable. If it’s once in a blue moon, then the scarcity of supply makes it more appealing to jump now than to wait.
Convenience – I probably should have put this one higher. There’s value to you being able to enjoy the lifestyle that you want near your new home. If it’s easy to get out on the water, you’ll do it more often. Even if you purchase now and aren’t planning on using it just yet, the anticipation of future enjoyment has a value as well (kind of like booking a vacation and looking forward to it). This is just as valid as any monetary considerations.
Congratulations on the property purchase and the potential slip purchase! I hope that it means many relaxed years ahead.
Source – I’m a Realtor in Ottawa, Ontario, Canada. I just had a very similar question come up from one of my team’s listings.
3 Things you should control for when buying an investment property?
1
Location – This is the single most important factor in whether your investment appreciates in value. Are you looking in an area that’s desirable and rent-able to good tenants?
2
Layout – “Quirky” shouldn’t be on your list when investing; ideally you’re looking for something that a lot of tenants can love, not just the unicorns.
3
Low-maintenance – Investing in property is not “mailbox money.” It’s a responsibility and it will take time and effort to be a good investor and landlord (and you should strive to be both). Huge yards and long driveways might be appealing to an owner, but many tenants see these as extra work, which can end up as a point of contention between you and a tenant.
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