If you own a boat slip and either aren’t using it or are looking for some extra income, it’s time to put it up for sale or lease. Unfortunately, pricing the slip correctly can be tricky. It’s worth taking the extra time to get the right numbers so that you aren’t losing out on valuable money. Keep reading to learn about factors that affect the value of your boat slip, as well as the difference between pricing it to sell vs rent.
Factors that Affect Property Rental and Sale Prices
Because boat slips are a type of property, they are subject to some of the same factors that govern the sale or rental price of homes and businesses.
- Location. The value of a boat slip varies widely by location. Just like with other types of real estate, the more desirable the area, the more money you can charge. The basic law of supply and demand drives up prices in direct proportion to how many people are in your potential market. In the boating community, easy access to large waterways is an important part of how desirable a slip is considered to be.
- Features. If your slip is located in a marina or yacht club, you have the added value of the location’s amenities. Prices can vary quite significantly for similar-sized boat slips in the same area, depending on how expensive the facilities are. As you begin researching the price of similar slips, try to look within the same marina/club if possible. If it’s exclusive and/or has a waitlist for membership, the asking price for the slip can be even higher. On the other hand, if someone with a similar slip has already priced theirs competitively, it will drive your asking price down.
- Size. As with other kinds of real estate, the dimensions are important when it comes to calculating the price. In the sailing/boating world, the cost of renting or owning is most often broken down by the slip’s overall length. Width and draft are also important, with a premium for wider slips that can accommodate catamarans.
- Economy & Interest Rates. When the economy is good, more people are in a position to buy or rent a niche item like a boat slip. While both the state of the economy and interest rates are not in your control, consider how healthy your local community’s economy is; are people moving to the area? Are more businesses opening than closing? Adjust your prices accordingly. As for the current interest rate, it will affect prices both directly (in terms of how expensive a mortgage is) and indirectly (it impacts the growth rate of the economy). A general rule of thumb is that when interest rates rise, more people will be looking to rent instead of buy.
Special Considerations For Boat Slip Owners
As stated above, boat slips are generally considered to be a luxury property. This means that pricing may have to change more dramatically to stay attractive to a smaller market of potential buyers or tenants, compared to a house or apartment. Certain features of boat slips, like whether or not liveaboards are allowed, don’t have an analog in the rest of the property market. In general, allowing liveaboards may make your slip more attractive to short-term renters who are traveling. On the other hand, features like having access to a lift may be attractive to recreational boaters who live in the area. These factors can impact not only pricing but whether it makes more sense for you to rent out or sell the boat slip.
Pricing Your Slip to Rent
Besides looking at comparable boat slips in your area that are being rented out, consider the overall dollar value of your slip. It may be worthwhile to have the slip appraised whether you want to buy or sell if you’ve owned it for a while and are unsure what the current market value is. As a general rule, properties are rented out at between 0.8 and 1.1% of their value per month. If you’re looking to rent your slip quickly, rather than waiting for someone who will pay more, consider sticking on the lower side of this percentage.
Pricing Your Slip to Sell
If you’re interested in selling your boat slip quickly, make sure you understand its current value first—this figure may vary significantly from what you paid for it. If it’s above-market, you may get a negative ROI, so think about renting instead. If the ROI is positive, you’ll next consider how low of a selling price you’re willing to ask for. Are you just trying to cover the cost of the slip, or trying to make extra money? Include some room for negotiation in your final number.
Finally, look for similar slips in the area and consider dropping your price just enough to be noticeable—5% or so. Note that more than half of people selling real estate change their price at least once, so it’s OK if you need to adjust the price later. If you aren’t getting any traction, evaluate not only your price but how well you’re marketing the sale. Investing in an effective digital campaign could save you lost revenue by finally connecting the right buyer with your boat slip.
Which Option is Best For Me?
Ultimately, the decision to rent or sell is a personal one that will be affected by your own finances and needs, as well as the overall health of the economy in your area. There are, however, several things to keep in mind as you weigh whether to buy or sell.
For example, if you’re still paying a mortgage on your slip and are considering renting it, add that to any marina or administration fees (including annual dues). Is the resulting number comparable to other rentals in the area? If it’s higher, consider selling instead.
If you’re looking to sell, calculate how much you would make if you sold it right now. This includes any money still owed on the property and deducting about 10% for closing costs. The tax burden that you might face from the sale is a little more complicated, as it varies widely from one region to another. Make sure you’re familiar with what to expect in your area and plan accordingly so you don’t get a nasty surprise when you sit down to do your year’s taxes.
If the total amount you’d make from the sale, minus all expenses, isn’t high (or is negative), it might be a better idea to hold onto the slip and wait for the market to improve. This may be especially advantageous if you could use long-term cash flow, rather than a single bigger piece of income. For example, someone who is retired or living on a fixed income might find it more advantageous to rent out their slip.
When it Comes to Selling or Renting Your Boat Slip, Don’t Forget About Visibility
Another important factor whether you decide to buy or rent your boat is how easily interested people can find your listing. Don’t miss out on revenue by dropping your price if you aren’t getting much traction; it might not be the price, but rather the visibility of your boat slip. Even if you’re willing to sell at a very competitive price, the niche nature of boat slips means that you should be prepared to spend some money promoting the property. As far as visibility goes, digital marketing is cheaper and more effective than a realtor (learn more about that here) and is a great option for both renting or selling your boat slip.
If you’re ready to put your slip on the market, don’t be intimidated by the process of doing it yourself! With a little bit of work and research, it’s completely possible to decide on whether to rent or sell your boat slip and how much you should charge. Marketing it yourself can potentially save you thousands of dollars’ worth of realtor commissions or lost revenue from not being connected to the right audience. If you’re ready to start today, check out this complete guide to selling (or renting) your slip online to get started.