It’s common practice for an appraiser to include a slip rental survey of competitive marinas in a report.  The goal is to show that the subject’s slip rental rates are above, below or equal to market.  In the dozens of marina appraisals I’ve reviewed, I can say that I haven’t seen one done correctly.  Here are the realities of slip rental rates:

• In some markets around the country, slip rental rates are charged according to the length of the boat that will fit in a slip, which is usually less than the largest size it will accommodate.  No two marinas have the same size boats in the slips.
• Think like a boater.  They want sufficient utilities at the slip and they want to be able to do something at or near the marina.  A bar, live entertainment, a shopping area, a place to stay overnight, a beach, athletic facilities, etc. are all in demand.  The same applies to boat repair, an important amenity.  These directly affect slip rental rates and demand, yet they are almost never considered.  Services, utilities and amenities are key.
• Presence or absence of a fuel dock at a marina affects slip rental rates and demand to some degree.  It’s common sense that if a boater needs to refuel and must go to another marina to do so, they would understand what the competition charges and be able to comparison shop.
• If you add up your concluded slip rental rates and compare it to the effective gross income for the facility, how much of a difference it there?  In most cases, there’s a lot.  Part of it has to do with vacancy, part of it to collection loss and sometimes cash up-front prepayment is not shown on the income statement (although this is not prevalent).  Discounts for prepayment before the season begins also affect effective gross income.  Sometimes slips are not made available to the public due to the need to house boats for repair.
• When calling another marina to find out what they charge for slips, it is common to have them quote based on the size of the boat or slip, but these ranges rarely correspond to that present at the subject.  For instance, if the subject slips accommodate 32-35 foot boats, competitive facilities might quote for 33-38 foot boats, 30-40 foot boats, etc.
• Few slip rental surveys break the slip rates down to their slip size tier.  Using an average provides some basis for comparison, but as we all know, marinas have different slip sizes and numbers, so a marina with an average slip boat size of 35 feet may seem comparable to one with an average slip boat size of 32 feet, but when you look at the breakdown, the number of slips may be skewed toward the high or low end and only the average seems comparable.
• Slip rate and occupancy are inversely correlated.  The higher the rate, the lower the occupancy in most cases (unless demand is just so great that the slip rate is temporarily inelastic).  Balancing the two is just not something appraisers are good at.
• Proximity and time to the major body of water can be important, although usually selecting local marinas overcomes potential problems in this area.  More importantly, is there a low-height bridge or other impediment that affects the size of the boat that can go through it or materially increases how long it takes to traverse the waterway to get to the major body of water?  For instance, slips on one side of a low-height bridge can have materially different slip rental rates than those on the other side even though they are only a stone’s throw away.  This is just one example in this respect.

The bottom line is that are inherent problems in simply comparing slip rental rates among marinas just based on the numbers.  Understand what a boater wants, how they think and the inherent problems of conducting a slip rental survey before you conclude an economic slip rental rate.