A Beginner’s Guide to Investing in Marinas and Boat Storage

Marina investing and boat storage are niche sectors within the real estate investing market. These unique investment opportunities offer potential for high returns and diversification for your portfolio. In this comprehensive guide, we will explore the basics of investing in marinas and boat storage, including the benefits, risks, and strategies for success.

Understanding Marinas and Boat Storage

Before diving into the world of marina investing, it’s essential to understand the different types of marinas and boat storage facilities available. There are two primary types of marinas:

• Full-service marinas: These facilities offer a wide range of services, including boat storage, fueling, maintenance, and repair services. They may also have amenities such as restaurants, shops, and recreational facilities.
• Self-service marinas: These marinas provide basic boat storage and docking services but do not offer additional amenities or services.

Boat storage facilities, on the other hand, are standalone businesses that focus solely on providing storage solutions for boat owners. These facilities may offer indoor or outdoor storage options, as well as additional services such as winterization and maintenance.

Benefits of Investing in Marinas and Boat Storage

There are several advantages to investing in marinas and boat storage facilities, including:

• Steady demand: With over 12 million registered boats in the United States, there is a consistent need for marina and boat storage services.
• High barriers to entry: The limited availability of waterfront property and strict zoning regulations make it difficult for new competitors to enter the market, providing a competitive advantage for existing marinas and boat storage facilities.
• Recession-resistant: Boating is a popular recreational activity, and demand for marina and boat storage services tends to remain stable even during economic downturns.
• Diversification: Investing in marinas and boat storage can help diversify your real estate portfolio, reducing risk and increasing potential returns.

Risks Associated with Marina and Boat Storage Investments

As with any investment, there are risks involved in marina and boat storage investing. Some of the most common risks include:

• Environmental concerns: Marinas and boat storage facilities are subject to strict environmental regulations, and failure to comply can result in significant fines and penalties.
• Natural disasters: Waterfront properties are often at higher risk for damage from storms, flooding, and other natural disasters.
• Seasonality: Demand for marina and boat storage services can be highly seasonal, with peak demand occurring during the summer months. This can lead to fluctuations in revenue and cash flow.
• Management challenges: Operating a marina or boat storage facility requires specialized knowledge and expertise, and finding qualified management can be challenging.

Strategies for Success in Marina and Boat Storage Investing

To maximize your chances of success in marina and boat storage investing, consider the following strategies:

• Location: Choose a marina or boat storage facility in a desirable location with strong demand for boating and waterfront activities.
• Due diligence: Conduct thorough research on the property, including environmental assessments, zoning regulations, and market analysis.
• Value-add opportunities: Look for marinas and boat storage facilities with potential for improvement, such as upgrading amenities or expanding storage capacity.
• Professional management: Partner with experienced marina and boat storage operators to ensure efficient and effective management of the property.
• Financing: Explore various financing options, including traditional bank loans, private equity, and real estate investment trusts (REITs) specializing in marina and boat storage properties.

Case Study: A Successful Marina Investment

One example of a successful marina investment is the Safe Harbor Marinas acquisition of Brewer Yacht Yards in 2016. Safe Harbor Marinas, a leading marina owner and operator in the United States, acquired 20 marinas from Brewer Yacht Yards, expanding its portfolio to 63 marinas across 17 states. The acquisition allowed Safe Harbor Marinas to capitalize on the strong demand for marina services in the Northeast and Mid-Atlantic regions, while also benefiting from Brewer Yacht Yards’ established reputation and customer base.

Conclusion: A Unique and Profitable Investment Opportunity

Investing in marinas and boat storage facilities offers a unique and potentially profitable opportunity for real estate investors. By understanding the benefits, risks, and strategies for success, you can make informed decisions and capitalize on this niche market. With careful planning, due diligence, and professional management, marina and boat storage investments can provide steady cash flow, high returns, and diversification for your real estate portfolio.