Investing in a Marina Berth

Interested in people thoughts in investing in a freehold Marina Berth.

My old man an avid sailor has been talking for years about buying a berth and is now in a position to grab one following a new release in Martha Cove, Melbourne.

Purchase price is around $150k with potential return around the $600per month mark. He will most likely be renting the berth out to his best mate at half rate around $300 per month.

Body Corp fees are under $2000 pa. He will be looking to hold long term.

IMO it is more of a lifestyle purchase rather than an investment.

Has anyone here purchased a berth or know much about it? If leased and under finance,are there any tax incentives (eg. can it be negatively geared?). He has cash to fund the purchase so most likely will not be financed (pending discussion with accountant to ensure this is best option).

Long term I think they will perform OK due to the limited supply of freehold berths in Melbourne however I would doubt growth will be inline with standard resi IP.

The other option is to lease a berth and purchase another IP. He is not entirely keen on this idea as he will be looking to retire in the next 5 or so years and is reasonably risk adverse.

Thanks in advance.

 

Based on the lack of feedback I'm assuming there aren't many on this forum stupid enough to buy depreciating assets big enough to require a berth! Haha

 

You call it "freehold", but is it really? We've looked at marina berths but the only ones up here are all leasehold.

I'd say it is firmly in the "lifestyle purchase" basket rather than an investment....

Edit: Just googled and yes, I see they are listed as Freehold.

 

Hi there

I have a number of clients who purchase a marina berth in SMSF and some outside.

Many are attracted as a 'retirement' asset. For me, for a long term strategy, I donot believe it is a great investment, yield can be variable and little to no capital growth with holding costs. I have never financed a berth so you are expending a significant amount of $$ for a birth and tieing up funds imo.

They are pretty popular on the mornington penisula and heavily marketed to SMSF with a rental guarantee - again, emotional decisions are made.

Cheers Ivan

 

Starting behind the 8 ball if rent < strata levies.

<5% gross returns

Who is the lessee - the user or Dalbora Marines etc?

 

I live at a marina development and watched some of these investments sink in the wild weather of 2011...

 

@Heinz57 - Insurance or flood event?

 

Well, flood event. But I don't know where that leaves the leaseholders and their $100k investments. Seems risky to me.

 

Especially if they're only returning <5% gross - nowhere near sufficient to cover risk.

 

Has there been any updates on these type of investments?

 

Update: don't do it.

 

IMHO , the reason to do it is if you want if for your boat and money isn’t an issue and maybe you want to lock in the price now rather than worry about what the fees might go up to further down the line . Ie it’s a lifestyle thing .

EG there is a major shortage of Bertha for cruising cats in Sydney , to the point where people are buying other types of boats . Swing mooring easier , but if you want the convenience of a walk on walk off marina berth , which is way more convenient

cliff

 

If you park a half cabin on it can you use it as a PPOR?

This could be a strategy to get cheap accomodation if the idea floats.

 

No disagreement there. I was referring to getting one purely as an investment.

 

Tiny homes as a category are really small, the thought of only having ½ is mind boggling.

 

So my idea doesn’t hold water?

 

I think that it's worth floating the idea.

 

If I buy a boat I’ll name it Chunder. Won’t take long to christen it lol

 

Can I get someone knowledgable to give me some positives and negatives. I can supply figures on one im looking at.

 

niche market , you'd have to run the numbers yourself .

hasn't been brought up in forum in the past ( not that I've seen )

I have had a couple of conversations with marina's in the past and as an " investment " it didn't seem to makes sense , though everything I've seen was leasehold .

Cliff