Boat-dock

Three Things to Consider before Buying a Marina

Marinas offer a unique and exciting opportunity for investors who want to live the dream of working by the water. However, with this opportunity comes the challenge of balancing the numbers and living the dream. Before you launch into this endeavor, it’s important to consider the following three things.

Scarcity is one of the greatest obstacles to marina ownership. Waterfront investment opportunities are not plentiful in most areas, and competition for existing sites can be high. Potential owners may need to closely evaluate whether upfront investment costs can coexist with current investing strategies. Capitalization ratios can be significantly lower than those of more traditional real estate investment options.

Capital costs need to be fully understood before you invest. These include line items such as site upgrades, repair and maintenance costs associated with maintaining the facility, day-to-day operational costs, predicted income from slip rates, and occupancy—with an eye toward seasonal fluctuations in usage. For safety reasons, maintenance must be kept up to date without having a detrimental impact on the use of the site. This includes covering expenditures during the off-season when there is less income.

Engineering assessments will ensure that the marina you are considering is in a location that will allow it to survive and thrive for years to come. Marinas are highly impacted by severe weather and the surrounding environment. A detailed engineering report can let the potential owner know how well the marina will stand the test of time.