Seen a couple threads concering the prices marinas or their mechanics charge so I thought I would play devils advocate a bit. Keep in mind I am talking about marinas in my area of the mid-west.
There is a marina on a medium to small lake for sale not to far from me. Asking price is $2.2 million for 2.44 acers with 150' of water front. Property taxes last year were just over $67K. It includes 65 slips, a small show room, a LARGE parts area and a three bay shop to work on boats.
I considered buying it (sort of) and sat down and put a pencil to it. Yes it sold some boats last year and when it was all said and done, (including interest on floor stock), they were barely more than a break even sale. Nothing there to get excited about.
The slips lease / rent for $1600 a year. At 65 slips that's roughly $105K a year gross revenue, if they remain full 100% of the time. (They don't.) Of course they require constant maintenace so it's not all profit. The seller tells me he figures if the slips pay for the taxes, insurance and facility maintenance each year it's a very good year. Most years it doesn't quite cover it.
There are gas pumps and like most marinas its high priced, sort of. He doesn't pump nearly as much gas as does a filling station and its not a national chain like most gas stations so he buys gas on the open spot market. Translated, he pays 10% to 15% more than the average gas station. They pump/sell roughly 8000 gallons a month. If he is making $0.25 a gallon profit he makes a whopping $2000 a month from it. (Keep in mind that is usually for 5 months or so a year.) $10K profit a year.
So in many respects it comes down to what he can sell in parts and accesories and what the shop can bring in. Do a little math. $2.2 million is the investment and to be gracious say non-shop profits after taxes, insurance, maintenance is $100K a year. (It's not but for arguments sake.) Theat leaves a HUGE revenue demand on the shop. If the shop charges $100 an hour it will take 22,000 man hours just to pay off the initial investment. The average person works 2000 hours a year, but that is not the case in the mid-west.
In the mid-west we get 4 or 5 good months for boating and maybe another month of so so boating. During the off season the marina cuts back from 5 people to 2 people due to minimal work or sales.
All in all, buying into the marina doesn't make much sense from a business investment stand point. I believe I could make a better return if I took the same money and put it in a bank with a simple passbook savings account. (And a whole lot less worry and work.) In my case i would be borrowing money to buy it and would have interest I would have to pay. I took a pass on buying it. I wasn't all that serious to begin with to be honest but the fact remains no one has made an offer on it in three years. The numbers just aren't there although the property is priced right.
To be honest, I think anyone that does own and operate a marina does it because they like doing it and if all goes well can make a decent living from it but they are never going to be hugely successful. At least not in the vast majority of the mid-west.
There is a marina on a medium to small lake for sale not to far from me. Asking price is $2.2 million for 2.44 acers with 150' of water front. Property taxes last year were just over $67K. It includes 65 slips, a small show room, a LARGE parts area and a three bay shop to work on boats.
I considered buying it (sort of) and sat down and put a pencil to it. Yes it sold some boats last year and when it was all said and done, (including interest on floor stock), they were barely more than a break even sale. Nothing there to get excited about.
The slips lease / rent for $1600 a year. At 65 slips that's roughly $105K a year gross revenue, if they remain full 100% of the time. (They don't.) Of course they require constant maintenace so it's not all profit. The seller tells me he figures if the slips pay for the taxes, insurance and facility maintenance each year it's a very good year. Most years it doesn't quite cover it.
There are gas pumps and like most marinas its high priced, sort of. He doesn't pump nearly as much gas as does a filling station and its not a national chain like most gas stations so he buys gas on the open spot market. Translated, he pays 10% to 15% more than the average gas station. They pump/sell roughly 8000 gallons a month. If he is making $0.25 a gallon profit he makes a whopping $2000 a month from it. (Keep in mind that is usually for 5 months or so a year.) $10K profit a year.
So in many respects it comes down to what he can sell in parts and accesories and what the shop can bring in. Do a little math. $2.2 million is the investment and to be gracious say non-shop profits after taxes, insurance, maintenance is $100K a year. (It's not but for arguments sake.) Theat leaves a HUGE revenue demand on the shop. If the shop charges $100 an hour it will take 22,000 man hours just to pay off the initial investment. The average person works 2000 hours a year, but that is not the case in the mid-west.
In the mid-west we get 4 or 5 good months for boating and maybe another month of so so boating. During the off season the marina cuts back from 5 people to 2 people due to minimal work or sales.
All in all, buying into the marina doesn't make much sense from a business investment stand point. I believe I could make a better return if I took the same money and put it in a bank with a simple passbook savings account. (And a whole lot less worry and work.) In my case i would be borrowing money to buy it and would have interest I would have to pay. I took a pass on buying it. I wasn't all that serious to begin with to be honest but the fact remains no one has made an offer on it in three years. The numbers just aren't there although the property is priced right.
To be honest, I think anyone that does own and operate a marina does it because they like doing it and if all goes well can make a decent living from it but they are never going to be hugely successful. At least not in the vast majority of the mid-west.
