Over the weekend I finished my half marathon. The plan now is to not run for a really, really long time. Here’s a picture from the weekend.
Time to relax.
Landlords Are Everywhere
You may have remembered in my post here that when you go beyond the traditional sense, landlords are everywhere.
People rent all sorts of stuff like websites, snowblowers, shop equipment, cars, and of course homes.
But there’s one scenario that’s kind of a blend between traditional landlords and the more niche examples I outlined. Docks.
If they don’t have a spot connected to their yard, boat owners must find somewhere else to dock their boat. Most of the time this happens at a marina, essentially making marina owners landlords.
Now a lot of that also depends on the amenities like whether there’s a clubhouse/restaurant, a pool, electricity, parking, etc. But in general, those are the numbers.
Here’s a breakdown that I took from Dockwa:
So why would someone prefer this over owning a home? Here are some of the benefits:
- Low Maintenance: Docks and marinas are super low maintenance. A power wash here, a wood plank replacement there, and maybe a new hose, but that’s really about it. Owning dock slips doesn’t present a lot of the maintenance struggles that homes do like broken fridges, insulation, windows, plumbing, etc.
- Low Overhead: While waterfront land is more expensive, you don’t need much of it. You could by just a sliver of land, less than a half-acre, and then expand the docks into the water. One sliver could be home to dozens of boats. Granted you can’t just build hundreds of docks in front of a neighbor’s property, but you get the idea.
- Lots of Tenant: Because of the minimal maintenance you can afford to have a lot of tenants. The docking costs won’t be as much as a traditional house’s rent, but they can still add up quickly.
How’d This Come Up?
Well, I was on a boat.
With some strangers.
And I started talking to this guy about what he does for a living. He called is real estate investing, but it turned out that him and his brother own a bunch of docks and marinas in northern Michigan.
His brother made a good living on Wall Street and provides the financing, and he scouts the locations and runs the operations. When they find an old, distressed marina or land they could build docks on, they buy it, develop it, and then hire a property manager.
They’ve done it several times, and from what I could tell, it seemed to be working for them.
Location, Location, Location
The biggest thing that I was able to gather was it’s all about location (as are all things).
Ideally, you’d want somewhere that’s not seasonal like Florida, and something on the ocean that can house bigger boats.
Northern Michigan, for example, is not the best choice. While there are some bigger boats on the Great Lakes, most of them are smaller, and the winters in Michigan are brutal requiring owners to take their boats out. So, unless you own a boat storage facility (which the brothers did), then the business would be seasonal.
I did some digging, and it turns out you can find slivers of beachfront land everywhere. Of course, they’re not going to be in the middle of Chicago or Tampa, but those aren’t really the sweet spots anyways. The downtown marinas cater to the ultra-rich clientele who can afford that level of convenience.
The sweet spot, however; turns out to be anywhere within an hour radius of these hubs so that members aren’t getting price gouged but can still enjoy the proximity.