When selling your marina, there are several considerations that impact your property’s value. The most obvious of these is the physical condition of the improvements and your equipment. Buyers will look carefully for deferred maintenance and required replacements and calculate that into their offer. Keep in mind that a buyer’s projected cost for these repairs will always be higher than your actual costs. Any attempt to cover up deferred maintenance will be a red flag for them to look harder for additional items. Any valuation completed for your property should take into consideration both the physical improvements and also the income stream.
Another consideration is your property’s competitive position in the immediate marketplace. Are the services you offer and your pricing competitive with other local marinas? Do you understand your customer base? If you intentionally have lower rental rates to stay full, that effort could be dramatically reducing your total value. A close look at the balance between rates and occupancy could help you increase the bottom line and thus your total value.
The worst way to increase your property value is by cutting expenses. As a percentage of your gross income, expenses you can cut are minimal and an educated buyer will know what the actual expenses should be. The best way to increase your property value is to increase your revenue stream. Increasing your occupancy, increasing your rates, increasing your other sources of income, and finding new sources of income will all have a greater impact on your bottom line.
Any attempt to cover up deferred maintenance will be a red flag for them to look harder for additional items.
A buyer will be looking at the current income stream, but also the potential to increase value, but there is also a cost associated with adding any physical improvements and revenue streams. Obtaining approvals or permits may add some additional value.
How good is your staff and are they interested in staying? Your people have a significant impact on the operational efficiency and happiness factor of your customers. The quality of your staff, how well they are trained and cross trained, and do they contribute to your growth, are critical factors. A smart buyer will be judging your staff as carefully as your books.
Verifying your income and expenses is critical. Owners often have side income streams that may not be verifiable, these will not help your total value. Now might be the time to clean up your books and make as much income verifiable as possible. As a rough comparison, every $100 of income can add $1,000 to the value. The time to think about maximizing your value is before you put your property on the market.
Another item for serious consideration is whether you are willing to provide some owner financing. For smaller operations that are not on the radar for institutional or large investor buyers, some owner financing can potentially enhance your bottom-line value.
Finally, there are two primary ways to go about selling your marina. The first is to maximize the exposure and reach the largest possible audience, to create as much interest as possible. The second alternative is to market your property confidentially to known marina buyers and select investors, to minimize the potential disruption to your ongoing business.
A qualified local broker will help you maximize the value of your asset and then find you the best buyer.