Marina slip fee increases

[BroadHopper]

Been paying for a decade around $1800. Last year increase to 2400. Just got the bill for this year $3300! Yeap, prices increase substantially.

I also notice a significant increase in buildings for valet storage. Doesn't help me!

[thinkxingu]

Originally Posted by BroadHopper

Been paying for a decade around $1800. Last year increase to 2400. Just got the bill for this year $3300! Yeap, prices increase substantially.

I also notice a significant increase in buildings for valet storage. Doesn't help me!

That. Is. Crazy. I'm all for marinas making money, but that's gouging. There's no way costs have doubled in two years.

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[FlyingScot]

Originally Posted by thinkxingu

That. Is. Crazy. I'm all for marinas making money, but that's gouging. There's no way costs have doubled in two years.

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One way to think about marinas is that they are real estate businesses. Just as the price of waterfront homes has skyrocketed over the past 5 years or so, the value of slips has surged

[TiltonBB]

Originally Posted by thinkxingu

That. Is. Crazy. I'm all for marinas making money, but that's gouging. There's no way costs have doubled in two years.

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While costs are a factor in pricing, marinas, and most businesses, sell at whatever the market will bear. Business do not exist to meet their costs and make a slight profit. It is all about supply and demand.

The supply of boat slips on Winnipesaukee will always be limited, only the demand will change with the economy.

If prices increase to the point where there are no takers, then they will start to come down. It is just the free market at work.

[Descant]

Gilford went through property reassessments this year and boat slips went up about 50% to march huge increases in sales prices. As the taxes go up, so do the rents. There was a $500 increase at MVYC a few years ago when the board of directors raised the dues $500. I'd guess the average there is now approaching $6000 for 12 months. They don 't do seasonal. Also, mostly larger slips/boats.

[MDoug]

Originally Posted by BroadHopper

Been paying for a decade around $1800. Last year increase to 2400. Just got the bill for this year $3300! Yeap, prices increase substantially.

I also notice a significant increase in buildings for valet storage. Doesn't help me!

ye

Our slip rental also topped $3300 for the 2022 season

[jeffk]

When we forego the large, unjustified markups of our home prices if we had chosen to sell recently, the marinas may choose to limit their slip prices to to what their "costs" are.

When commodities are scarce, prices go up until enough buyers are driven out of the market because they cannot afford it and that causes prices to level off. For some commodities, more can be manufactured thus reducing scarcity. In the case of land, especially docking space around the lake, there is a permanent limit on availability. The only fix to such scarcity is to force some buyers out of the market.

I am sympathetic, my valet prices have been going up as well. However, boating by it's nature is an expensive activity. I have been dreaming about replacing my 22 ft. bow rider and the cost would be well over $100K. Ouch.

[Winilyme]

Originally Posted by jeffk

When we forego the large, unjustified markups of our home prices if we had chosen to sell recently, the marinas may choose to limit their slip prices to to what their "costs" are.

Now that’s a good point.

[thinkxingu]

Originally Posted by Winilyme

Now that’s a good point.

Is it? I'm trying to figure out the math, and it would seem that the homeowner selling at a markup benefits once whereas the marina will benefit in perpetuity. I mean, sure, prices *might* come down a bit in the following years, but there's no way it'll ever be matched to the declines in value.

I mean, if my house was being rented, I wouldn't be doubling the rent just because the value of the home went up 50%, right? It might happen over a decade or so, but in two years?

That's like Dave Ramsey trying to justify tenants moving out after he raised the rents solely to match the *market*.

Just thinking out loud here, but it reeks of gouging.

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[MDoug]

Does anybody else on the islands feel they're being held hostage by the marinas?

[Descant]

Originally Posted by MDoug

Does anybody else on the islands feel they're being held hostage by the marinas?

Understandable thought. We went through thios in a sense 40 years ago when some marinas went condo and islanders were afraid they'd have no place available on the mainland. Part of the result was a lot more valet, but even that is limited by parking and land space needs. It won't get any easier. In the "early years", islanders did not always have an easy access power boat--they took a taxi to the island and left a message for pickup at some future time. Remember, no phones then. When Gilford Marina (MVYC) went condo in 1983, slips sold for 20-25K. A house in those days sold for <150K. The slip now sells for $160K (8X) and the House for only $360K.(2.4x). In some respects, the marinas have been slow to raise rates, but now, they can't get boats to sell, and they can't sell boats if they don't have slips. They still have fixed overhead and a short season, for things like service and gas, which can't fully support a business.
It looks like islanders need to find long term solutions, either for the next generation or for the next buyer. If you can't sell a boat without a slip, you certainly can't sell ah island camp. Wolfeboro Corinthian Yacht Club may have an example; I think it is mostly Wolfeboro islanders.

[John Mercier]

Originally Posted by thinkxingu

Is it? I'm trying to figure out the math, and it would seem that the homeowner selling at a markup benefits once whereas the marina will benefit in perpetuity. I mean, sure, prices *might* come down a bit in the following years, but there's no way it'll ever be matched to the declines in value.

I mean, if my house was being rented, I wouldn't be doubling the rent just because the value of the home went up 50%, right? It might happen over a decade or so, but in two years?

That's like Dave Ramsey trying to justify tenants moving out after he raised the rents solely to match the *market*.

Just thinking out loud here, but it reeks of gouging.

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Depends. The rent would go up 50% if the rental market was willing to pay it based on the supply of rentals available.

[FlyingScot]

Originally Posted by thinkxingu

Is it? I'm trying to figure out the math, and it would seem that the homeowner selling at a markup benefits once whereas the marina will benefit in perpetuity. I mean, sure, prices *might* come down a bit in the following years, but there's no way it'll ever be matched to the declines in value.

I mean, if my house was being rented, I wouldn't be doubling the rent just because the value of the home went up 50%, right? It might happen over a decade or so, but in two years?

That's like Dave Ramsey trying to justify tenants moving out after he raised the rents solely to match the *market*.

Just thinking out loud here, but it reeks of gouging.

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Also thinking out loud on a complicated topic. I agree 64% in a year is gouging for a returning slip renter. Just outrageous. But are you sure you would rent to a new renter at below market rates?

I also think there's a difference between renting a luxury good compared to an apartment housing somebody on a relatively fixed income. If I owned an apartment building, I would not increase a current tenant by more than the CPI or my costs. But if you're a lake local and your only asset is your dock space, what's your obligation to hold prices down for a guy with a $50-100K toy?

[John Mercier]

I hope that is not what the elderly think is going to happen.
If it is... we are going to have a supply run on blue tarps for their ''real estate'' out on the WOW trail.

[Winilyme]

Originally Posted by FlyingScot

Also thinking out loud on a complicated topic. I agree 64% in a year is gouging for a returning slip renter. Just outrageous. But are you sure you would rent to a new renter at below market rates?

I also think there's a difference between renting a luxury good compared to an apartment housing somebody on a relatively fixed income. If I owned an apartment building, I would not increase a current tenant by more than the CPI or my costs. But if you're a lake local and your only asset is your dock space, what's your obligation to hold prices down for a guy with a $50-100K toy?

There are so many variables. A smart business person will consider them all and select a rate reflective of the market less the risks including those associated with being perceived as someone who's gouging. But I bet a vast majority of people that are renting slips, bikes, AirBnbs or whatever don't consider all those variables and simply go for the highest dollar value the market will bear. Sadly, that's the way of the world today. Customer care is a dying art. It's all about me, not about you. But, as Jeffk points out, when the shoe is on the other foot...

Regarding the marinas, I doubt many of them are too worried about business not being there in the future. I mean, maybe they need to respond to market declines at some point by lowering prices but do any of them really think they aren't going to be able to fill up all those slips in the future at the highest possible price point? Yes, they'll anger some people but I'm betting in most case that's second fiddle to the almighty dollar.

[John Mercier]

Originally Posted by Winilyme

There are so many variables. A smart business person will consider them all and select a rate reflective of the market less the risks including those associated with being perceived as someone who's gouging. But I bet a vast majority of people that are renting slips, bikes, AirBnbs or whatever don't consider all those variables and simply go for the highest dollar value the market will bear. Sadly, that's the way of the world today. Customer care is a dying art. It's all about me, not about you. But, as Jeffk points out, when the shoe is on the other foot...

Regarding the marinas, I doubt many of them are too worried about business not being there in the future. I mean, maybe they need to respond to market declines at some point by lowering prices but do any of them really think they aren't going to be able to fill up all those slips in the future at the highest possible price point? Yes, they'll anger some people but I'm betting in most case that's second fiddle to the almighty dollar.

I care a lot about customers. But the ones that want luxuries should expect to pay for those luxuries.

[Descant]

Transparency is a word we hear a lot and mostly ignore. Let's be transparent here and state our position. In my case, I own a rental residence and I own a rental boat slip. It's hard to raise the rents on a residence because, if the tenant leaves, I may have to re-paint, replace carpet, advertise and have vacant times with no rent. The goal is to keep the tenant in place, right? In the case of a boat slip, there is no expense to turnover, except perhaps vacancy. There is a wait list of tenants who will, pay a higher rent, if that's the market. That's the way it is today. In some years, there is no wait list, and I get no rent at all, or I reduce the price to find a way to cover some, if not all of my expenses, mortgage, dues, taxes. In that case, I can't sell, no buyers, or the price is a loss if I sell. This is all pretty basic, but posters on this topic should indicate their perspective, not just a position from Economics 101.

[John Mercier]

Wouldn't that just be you deciding that the extra cost is not worth the possible increased return?

[TiltonBB]

Originally Posted by FlyingScot

If I owned an apartment building, I would not increase a current tenant by more than the CPI or my costs.

I will respectfully disagree with your business strategy. Your business expenses should have nothing to do with what is charged for a service other than knowing that you need a certain amount to keep the business prosperous.

If the market rate rent for an apartment was $1,500 per month but you had tenants paying $1,000 and the CPI went up 3% you would only raise their rent to $1,030? You would not ask for the other $470 per month you could get? So if it was a 100 unit apartment building you would leave behind an additional $47,000 per month that you could have collected?

I had tenants once, that complained when I raised their rent to the fair market value, saying I should only collect what my expenses were and make a profit when I sold the building. I responded that if I was using their thought process, if I was a wealthy man and had paid cash for the building, should I let them live in it for free and run a home for little wanderers?​

Any business owner is entitled to charge what the market will bear. Putting away reserves when times are good, for the low income years, market slumps, and assorted other expenses is just good business.

[SAMIAM]

Originally Posted by TiltonBB

I will respectfully disagree with your business strategy. Your business expenses should have nothing to do with what is charged for a service other than knowing that you need a certain amount to keep the business prosperous.

If the market rate rent for an apartment was $1,500 per month but you had tenants paying $1,000 and the CPI went up 3% you would only raise their rent to $1,030? You would not ask for the other $470 per month you could get? So if it was a 100 unit apartment building you would leave behind an additional $47,000 per month that you could have collected?

I had tenants once, that complained when I raised their rent to the fair market value, saying I should only collect what my expenses were and make a profit when I sold the building. I responded that if I was using their though process, if I was a wealthy man and had paid cash for the building, should I let them live in it for free and run a home for little wanderers?​

Any business owner is entitled to charge what the market will bear. Putting away reserves when times are good, for the low income years, market slumps, and assorted other expenses is just good business.

No one has mentioned the endless moratorium on rents and evictions.The majority of the nation’s landlords are individual investors.many who bought two.three or 4 family homes to live in as well as an investment for the future.They still have to pay mortgages, perform repairs and maintenance while not collecting rent and it's caused many to lose their homes or file bankrupcty

[John Mercier]

Originally Posted by SAMIAM

No one has mentioned the endless moratorium on rents and evictions.The majority of the nation’s landlords are individual investors.many who bought two.three or 4 family homes to live in as well as an investment for the future.They still have to pay mortgages, perform repairs and maintenance while not collecting rent and it's caused many to lose their homes or file bankrupcty

Every investment has risks. When a realtor tries to sell you home with the idea that it is an income property were you will live for free while the rentals will cover some or all the bills... you are making an investment in a business, not a shelter for you and your family.

[FlyingScot]

Originally Posted by TiltonBB

I will respectfully disagree with your business strategy. Your business expenses should have nothing to do with what is charged for a service other than knowing that you need a certain amount to keep the business prosperous.

If the market rate rent for an apartment was $1,500 per month but you had tenants paying $1,000 and the CPI went up 3% you would only raise their rent to $1,030? You would not ask for the other $470 per month you could get? So if it was a 100 unit apartment building you would leave behind an additional $47,000 per month that you could have collected?

I had tenants once, that complained when I raised their rent to the fair market value, saying I should only collect what my expenses were and make a profit when I sold the building. I responded that if I was using their thought process, if I was a wealthy man and had paid cash for the building, should I let them live in it for free and run a home for little wanderers?​

Any business owner is entitled to charge what the market will bear. Putting away reserves when times are good, for the low income years, market slumps, and assorted other expenses is just good business.

I agree with you on business strategy. What you describe maximizes profits, at least short term. I do this regularly.

But having grown up in a town with a lot of people who were just scraping by--if I owned an apartment building and property values were roaring while costs were pretty much flat, I would not raise rates in a way that would squeeze (good) tenants who were barely making it. Keep in mind that if a person is paying 30-50% of their income on rent, and prices go up by 50%, as you suggest, they cannot possibly afford the jump--you'll turn over the entire building at once. But that's just me making a personal choice. Maybe it's why I don't own an apartment building? (haha)

Back on topic-- can I infer from your post that you and all the folks who thanked you are cool with slip prices jumping by 64% in a single year?

[Winilyme]

Originally Posted by FlyingScot

I agree with you on business strategy. What you describe maximizes profits, at least short term. I do this regularly.

But having grown up in a town with a lot of people who were just scraping by--if I owned an apartment building and property values were roaring while costs were pretty much flat, I would not raise rates in a way that would squeeze (good) tenants who were barely making it. Keep in mind that if a person is paying 30-50% of their income on rent, and prices go up by 50%, as you suggest, they cannot possibly afford the jump--you'll turn over the entire building at once. But that's just me making a personal choice. Maybe it's why I don't own an apartment building? (haha)

Back on topic-- can I infer from your post that you and all the folks who thanked you are cool with slip prices jumping by 64% in a single year?

Maybe not so much 'cool' as 'accepting' or 'resigned'.

[John Mercier]

Originally Posted by FlyingScot

I agree with you on business strategy. What you describe maximizes profits, at least short term. I do this regularly.

But having grown up in a town with a lot of people who were just scraping by--if I owned an apartment building and property values were roaring while costs were pretty much flat, I would not raise rates in a way that would squeeze (good) tenants who were barely making it. Keep in mind that if a person is paying 30-50% of their income on rent, and prices go up by 50%, as you suggest, they cannot possibly afford the jump--you'll turn over the entire building at once. But that's just me making a personal choice. Maybe it's why I don't own an apartment building? (haha)

Back on topic-- can I infer from your post that you and all the folks who thanked you are cool with slip prices jumping by 64% in a single year?

I think the difference is pricing between a basic commodity and a luxury.
People need a place to live... they don't need a boat.

[Weekend Pundit]

Originally Posted by john mercier

i think the difference is pricing between a basic commodity and a luxury.
People need a place to live... They don't need a boat.

Blasphemer!!!

[John Mercier]

Originally Posted by Weekend Pundit

Blasphemer!!!

No. Just Old New Hampshire.
Boating was more noticeable from people that came here from elsewhere.