Boat Slip Financing

[secondcurve]

Originally Posted by birchhaven

I am lucky enough to own a house on the shore so I have my own dock. What I am wondering is? Is the biggest con to renting a slip, the unknown? As in not know whether or not you can rent it year after year? Making one of the biggest benefits to owning a slip the knowing?
I only ask because I heard discussion of one marina offer a perpetual lease, that seems like it might be the best of both worlds. I don't know all the details but I can look into it if those are the reasons for not liking renting?

Birchhaven:

I believe that is the case. Fear of being without a slip in combination with declining interest rates over a number of years resulted in the price of slips being bid up substantially. Increasing slip prices in turn supported the notion that a boater could be caught without a slip and also the idea that slip prices could never fall. Clearly there is a finite number of slips on Winnipesaukee and this supply won't increase much, if at all, in the years to come. However, I'm not sure this dynamic supports the current average slip pricing on the lake.

[VtSteve]

Originally Posted by secondcurve

Birchhaven:

I believe that is the case. Fear of being without a slip in combination with declining interest rates over a number of years resulted in the price of slips being bid up substantially. Increasing slip prices in turn supported the notion that a boater could be caught without a slip and also the idea that slip prices could never fall. Clearly there is a finite number of slips on Winnipesaukee and this supply won't increase much, if at all, in the years to come. However, I'm not sure this dynamic supports the current average slip pricing on the lake.

It might not, it takes time to steady out from economic fallout of paying whatever for whatever. Boat slips become like gold, scarce and sought after. Expansion of marinas is looked at like a giant, lake-eating fungus, so I doubt that will happen.

I'd have to think there is future value in owning a slip, while there is no value in renting one, except it's year to year. Most excluded this aspect of the comparisons, which also makes the slip collateral for a bank. Good selling point also if you ever sell a place on an island, include the slips.

Is MVYC a club with nice facilities?

[Tsteinruck]

Clearly the market has changed since this thread was started. With boat slips pushing $200K who is financing these things? I bought mine last season with MVSB, but looking for better terms. BoNH is the only other bank I know of that finances boat slips, and they have a $50K max. Are there any other lenders?

[codeman671]

Originally Posted by Tsteinruck

Clearly the market has changed since this thread was started. With boat slips pushing $200K who is financing these things? I bought mine last season with MVSB, but looking for better terms. BoNH is the only other bank I know of that finances boat slips, and they have a $50K max. Are there any other lenders?

Definitely the wrong time to be searching if you are expecting better terms. Rates have gone up, so unless your deal was pretty bad I can't imagine you will see something better.

Do you own a home and have access to home equity? A HELOC will be a better rate and more flexible. With recent tax law changes and limits I am not sure how much of the interest, if any, would still be tax deductible.

[Grant]

$200k for a slip?

Pure lunacy. This market is officially off the rails.

[thinkxingu]

Originally Posted by Grant

$200k for a slip?

Pure lunacy. This market is officially off the rails.

Yup, and financing these things has to be up around 7-8% if it can even happen. Crazy town.

Sent from my SM-G950U using Tapatalk

[codeman671]

Originally Posted by Grant

$200k for a slip?

Pure lunacy. This market is officially off the rails.

It certainly is.

1 in Meredith listed at $189,900 under agreement, and 2 more at $249k that are not.

The contingent one and one of the other 2 available are covered which is a bit rare, the other one is just a wide, open slip but only 30' long.

[Descant]

Originally Posted by codeman671

Definitely the wrong time to be searching if you are expecting better terms. Rates have gone up, so unless your deal was pretty bad I can't imagine you will see something better.

Do you own a home and have access to home equity? A HELOC will be a better rate and more flexible. With recent tax law changes and limits I am not sure how much of the interest, if any, would still be tax deductible.

HELOC might be OK if it is temporary, but many HELOC rates change quarterly and eventually roll over to a fixed rate at whatever is prevailing at the time. Don't be surprised if, in 2014, you see some boats and slips up for auction. On the good side, for some, prices are starting to moderate. As noted above, slips are staying on the market longer. One slip at MVYC had a $20K price reduction, after several weeks on the market. Still for sale.

[LIforrelaxin]

Cost of boat slips like any piece of Real Estate around the lake have sky rocketed lately. Where it will stop is anyone's guess. As long as banks keep
lending money, I look for them to continue to climb.... What I am afraid of is that at some point everything is going to come crashing down, all of the multi-million dollar homes are going to become unsellable, because no one can afford them, as second homes...

[Mr. V]

I'd never heard of buying a boat slip, but then again I don't own a boat.

I have to ask those who are familiar with the concept a few questions: what exactly do you own?

Is it like a condo deal, or do you actually own a specific bit of land at your dock, legally described in metes and bounds?

[8gv]

I suspect that some of the slips are bought without financing.

[swnoel]

There's no reason that slips cost that much, except for the fact we're in the end time of a bull market for nearly everything. If it sounds crazy... it probably is.

[John Mercier]

I don't think so.
At the end time of a bull market, contractors would be more free in their schedules.

People still purchase materials, but it becomes more DIY as we end a bull market.

Boat slips may have reached the top... but that may not be really known for months.

[Descant]

Originally Posted by swnoel

There's no reason that slips cost that much, except for the fact we're in the end time of a bull market for nearly everything. If it sounds crazy... it probably is.

There's some lag time--probably two years if my recollection of 2010 is right, after everything went belly up in 2008. If you financed a slip and a boat the boat goes first, and you hope tp rent the slip. But rent may be 4000 instead of 6000. In some years there are wait lists and some years there are vacancies. I note that fewer big boats are being sold, i.e. cabin cruisers, and more 'toons which are less expensive to buy and cheaper to run. We'll see. One of the great things about fresh water is the boats last a long time with less costly maintenance.

[John Mercier]

But the price of oil is not outrageous.

I think that WTI topped 147 in 2008... and when underlying wage growth is taken into account, we aren't anywhere near there.

And short of a very active hurricane season... we aren't likely to see it.

This is more of a wage inflation... and I don't think that the buyers at that level are really that wage sensitive.
I think they are above the mean, rather than below the mean.

[TiltonBB]

Originally Posted by LIforrelaxin

Cost of boat slips like any piece of Real Estate around the lake have sky rocketed lately. Where it will stop is anyone's guess. As long as banks keep
lending money, I look for them to continue to climb.... What I am afraid of is that at some point everything is going to come crashing down, all of the multi-million dollar homes are going to become unsellable, because no one can afford them, as second homes...

It is not just the banks lending money, there is a lot of cash around. That is especially true in Florida but that may be a different demographic with a higher percentage of retirees. There are a lot of cash buyers around the lake.

A year ago, I sold a home in Florida to a gentleman who offered cash, over the asking price, with no appraisal. The neighborhood I just built in will be about 1,100 homes. I was told today by one of the sales team that over 75% of the first 800 buyers have paid cash. That amazes me, but maybe I shouldn't be surprised.

[Descant]

Originally Posted by TiltonBB

It is not just the banks lending money, there is a lot of cash around. That is especially true in Florida but that may be a different demographic with a higher percentage of retirees. There are a lot of cash buyers around the lake.

A year ago, I sold a home in Florida to a gentleman who offered cash, over the asking price, with no appraisal. The neighborhood I just built in will be about 1,100 homes. I was told today by one of the sales team that over 75% of the first 800 buyers have paid cash. That amazes me, but maybe I shouldn't be surprised.

Hard to not get off topic, but a good number of people invested in the stock market in 2016-17 made a lot of money. Since 2020 they have been looking elsewhere to invest and real estate seems to be a good long term place to weather the storm. The problem, of course, has been to buy something when prices are WAY inflated. I'm changing directions, but that's not what this thread is about.

[John Mercier]

Sort of. It does expose some of the demand.
Real Estate is a tricky investment... but everyone is seeking better returns.

Obviously the question is where will that be?

Existing slips seem a reasonable choice. Limited supply, somewhat steady demand, possible rental income.

[jeffk]

Originally Posted by codeman671

...

Do you own a home and have access to home equity? A HELOC will be a better rate and more flexible. With recent tax law changes and limits I am not sure how much of the interest, if any, would still be tax deductible.

With inflation out of control, HELOCs are a ticking time bomb. There is enormous pressure on the FED to significantly increase their rates to tame inflation. When that happens, HELOC rates will soar as well.

And no, unless you used your HELOC funds to pay for home related expenses, they are not tax deductible. I used mine for a car and got no deduction. Even if you could, the large increase in the standard deduction means, for most people, you wouldn't pay enough interest to get a bigger tax break than you are already getting with the standard deduction.

As to slip costs, valet costs are soaring as well. Up $1000 last year and $1000 this year.