Check out this recent article regarding dockominiums and rackominiums



http://www.boating-industry.com/output.cfm?ID=1906903

Seven Kings is the next street over from my warehouse. CEO drives a black Rolls Phantom. The principles just bought Moroso Motorsports park (now called Palm Beach International Raceway) and remodeled the whole track/ replaced all the onsite buildings with custom garages for clients to lease and leave all their cars at the track.

They have big wallets and while might not be making a killing now they will be as FL commercial waterfront real estate disappears.

Seven Kings buys right. They didn't get caught up like many of these newbie marina developers did during the last several years, and pay two or three times what the property was worth thinking they were going to build these fancy marinas and sell the slips for 250k t0 300k a piece because they added a "spa" to the marina. They have a business model that works, is realistic and is not based on a temporary real estate "bubble". They stood on the sidelines in many cases and watched the scenario play out.

[QUOTE=ke6seh;2764848

BTW, I am an insurance agent researching this area for my employer. I am not looking for clients to advise in this matter.[/QUOTE]

Ke6seh

If you really are researching this area for information on this Industry, please let me know. Send me your contact information.
I know this market cold. This is what I do for a living . I have done research on this topic ( Dockominiums/Rackominiums) for many a Marine Association, as well as my own company. Would be happy to help you. It's better than pulling up a two and a half year old thread! The market has changed dramatically since then.

I just returned from Aventura after checking on a couple of "dockominium" listings over there, and you will not believe how low some of these prices have dropped!
You can buy a 40' slip at Mystic Point Marina, including parking and Tennis Court use for 50k! Thats asking price! You are talking a premier location......Those slips were selling for 125k two years ago. But no sales have occurred since.
You can also get a 35' slip at the brand new Marina Lofts for 22k, asking! Granted, that whole development is in trouble now, but those slips were going for 75k to 100k pre-construction!
This is in the "upscale" Aventura area!
Boat slip renters or buyers can call the shots right now in many areas.

I own two industrial condominiums and would like to offer the following observations

1. The maintenance fee is just that. Expect assessments for just about any major repair / improvement to the facility

2. Owning the land underneath is preferable to a lease. Otherwise the value drops as the lease expires

3. Make SURE the developer does not have voting control of the board of directors.

4. I don't see how the condominium "entity" can go bankrupt. If someone can't pay the maintenance / assessment the BoD forecloses and sells to someone else at some price. The new "Owner" assumes the obligations

FULL DISCLOSURE: I am a manufacturer, not a lawyer, developer, accountant, Govt official, etc. So my input is not worth a whole lot. But, to my way of thinking as (here in the Northeast) marinas continue to disappear in favor of commercial development, owning the slip (land) guarantees you a place to park your boat. Given that there is not any NEW waterfront being created eventually the prices will rise. It may be for your kids, but eventually somebody will profit.

I agree with most of what you say rjr.
The problem has been that many of the Developers these past 8 years have built their "projects" for the purpose of making a quick buck. For short term investors, not end users. The developers paid too much for their properties, built too lavishly, all on the premise that this would exacerbate a quick exit. If the price, location and reason for buying make sense, then it could be a viable purchase for the long term. Note, there is a huge difference between a Rackominium and a Dockominium. A Dockominium for an over 50' boat, where the submerged land is owned is the best long term value proposition. Always has been. This type of investment will eventually increase in value, albeit at a much slower and realistic rate then it has in the past several years. Premier Dockominiums in select places (Ocean Reef?) will always be a prudent value play for the end user. The real meltdown and disconnect occurred with Rackominiums. Most of these house under 40' boats. You have a more transient and less affluent boat owner. These slips in reality are worth between 40k and 60k at best, not the 200k that developers have been asking. Hence the meltdown.
Hopefully, Municipal Marinas will play more of a role in the future-with expansion and improvements of their existing facilities while holding in place affordable price points for the average boater. This idea is beginning to take hold in many municipalities as we speak.

As for the Bankruptcy question, I was referring to what is known as a "fractured Condominium" Which is a developer who has sold a percentage of units (slips), and cannot sell anymore. He then files bankruptcy, or faces foreclosure. This is what happened at Dania Beach Boat Club here in Florida. It is becoming a more common occurrence these days

100% right on..... I owned a "condo" warehouse for 15 months and saw the handwriting on the wall. Sold for $60 a square foot more than I paid with no realtor involved. Set the record for what the condos have sold for with no one getting more than me! What put me over the edge was a 3K assessment for "gutter supports" (L brackets under the gutters) that the developer controlled BoD thought we needed.

As far as profit, if you factor in the maintenance, taxes, insurance on top of the purchase price/mortgage a 2% CD on the capital you use up will crush the condo "investment."

Jupiter- congratulations on getting out at a good time. But, if you are just looking at ROI it makes no sense to own a pleasure boat. Especially one with more than 1000 HP. But that's not why we are having this discussion. A friend of mine owns a rack in a rack o minium and couldn't be happier. Another guy owns his slip in a marina and isn't sure if he likes it or not. The key, weather its commercial, pleasure, or living space, is to find an established place that is well maintained, and run by the owners. Only YOU can know if its worth the expense/investment.