House Boats and Overnight Yacht Rentals

[Joseph Gambino]

There is a man in my area who has a collection of yachts and smaller vessels parked in various marinas (most don’t run, have mechanical issues or no motor at all, just a hull), most well known location he has some parked at would be the Floribama Yacht Club. I think he has 7 boats there (slip fees, insurance, yada yada..) and he has been selling them off one by one over the past couple of years to get out of the business. Most bring in well over $70k a year depending on weather and he is selling some for as low as $60k. I conversed with him once and he says he has other marinas bidding for him to bring his business to their location. He rents them nightly as vacation rentals via AirBnB, Craigslist, and has a personal website. What I’m getting to is, if you had the opportunity to buy a yacht for a vacation rental, would you? How much of a hassle is it to constantly clean, book, repair vacation rentals? And can you outsource an AirBnB rental to a property management company? Keep in mind most of the vessels do not run, so if there was a falling out with the marina you had it in you would need to have it hauled elsewhere($$$) or repair the engines and get it in running condition($$$$$).

[Julie McCoy]

If he's selling them for $60k but they make ~$70k/year then what are you waiting for? Ask him if he'll tell you who his people are who do all those things for him (cleaning, maintenance, etc) and talk to them about continuing with you. Talk to him about how much goes into repairs, slip fees, etc - how much of that $70k gross goes into his pocket? See how much of his system you can adopt, and then adapt it to fit your needs. Managing the bookings you can do yourself from anywhere, you'll just want to have good and reliable cleaners and handyman on call. Set aside money for CapEx just like you would for a long-term rental, and then if you need to move marinas, you've got a reserve to pull from. (get it towed, don't bother with repairing/replacing engines unless you intend to use them regularly)

If the marinas they're currently moored at are fine with the short-term guests, then carry on; no reason to borrow trouble.  Though, do make sure they ARE fine with it, before you buy.  

Yachts are absolute money pits if you have to keep them running.  They're probably not a joy even when they aren't, because you still have to keep water tanks full, get waste tanks pumped, there's specialized equipment throughout that's more expensive to fix when it breaks... but the potential returns look enormous, if you're willing to put in some extra work.

I've said I'd never own a boat (my family owned several, hence my caution) but this scenario is tempting me!