BoatU.S. - April/May 2012

Joseph Kalo, a professor of law and Co-Director of Coastal Resources Law, Planning and Policy Center in North Carolina, says that because dockominiums are often in marinas on public-trust lands and waterways, and involve riparian rights, an individual slip owner may not be able to hold title to the slip. Instead, the purchaser is buying the exclusive right to the slip space, and rights in common with other slip owners to use the marina’s common areas. It’s important to know what you are actually purchasing.

Marty Laven, owner of The Dockominium Group, a marine real-estate brokerage, says people should be wary of buying a slip at a marina that is not yet built. He says anyone who buys pre-construction should make sure the developer has taken out a big enough performance bond to return down payments if the project fizzles. He recommends doing due diligence on the developer and project. He suggests working through a reputable real-estate broker who knows dockominiums and the area.

Another check is how willing lenders are to provide financing in the project you’re considering. If a lender is reluctant about the project or the developer, caution is advised. When considering the purchase of a dock, Laven recommends looking for features that will enhance the value: quick access to open water, money for dredging the marina and access channels, hur-ricane-resistant structures, good management, amenities such as WI-FI, laundry, recreational facilities, and dining, to name a few. If you decide to buy in an established marina, Laven recommends talking with the owners, renters, and employees to get an idea if they’re happy with the facilities and its management.

If you decide to buy, remember purchase costs will include down payments, interest rates, closing costs, title insurance, real estate and sales taxes, maintenance, and special assessment fees. As with any large purchase, consult an accountant or tax attorney first.

Most experts agree you shouldn’t plan on making a quick return on your investment. The best return on investment will come if you plan on owning your dock for seven to 20 years. Long-term ownership may involve a need to rent your dock to someone else. Make sure you check on any rules and restrictions for leasing out your slip. — Debbie Schaefer

the boat on a trailer in their own yard, and when the economy tanked, they exercised that option in droves.

From the perspective of Linda Terry from
Tranzon Auctions, it’s a great time to buy. In
2005, her company was involved in selling
the 60-slip Shallowbag Marina near the
Outer Banks of North Carolina for $2.3 mil-
lion. In October, after the owners defaulted,
they were involved in auctioning slips at the
marina piecemeal, at prices she says were
low, compared to even six months prior.
“We sold 12-15 slips to individuals with the
rest remaining with the retail store,” says
Terry. “At the height of the market, the slips
were going for $1,500 to $2,000 a foot.
Six months ago they were $1,000 a foot.”
At the auction in October, some went for
half that. “I think we’re at the bottom now.
Buyers were looking at the rental potential.
It’s like housing. The buying market is cold,
but the rental market is hot.”
While “hot” might be an exaggeration,
it would seem to have played out in my
own dockominium experience. So far, leas-
ing the Charleston slip has been depend-
ably easy.