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Why buy a berth in the Mediterranean - Why not just rent?
Many owners dream of having their boat in the Mediterranean. Flat blue seas, better and warmer weather conditions than in their home country, a longer boating season and 300 plus days of sunshine are just some of their reasons. But the first question most ask themselves however, is "Do I buy or do I just rent a berth"?
There are many reasons why the majority of owners eventually decide to purchase a berth instead of renting one, but the availability of rented berths, security of tenure when renting, the annual increases in the berthing charges levied by marinas, and the capital value increase in berths, are the four primary factors.
To highlight the difference, the chart below compares rental to purchase prices for a typical 12 metre berth in a marina on the Costa del Sol. As can be seen, the purchase option shows that over the next 10 year period, it will cost absolutely nothing to moor a vessel. In fact, if the berth is sold in say 10 years time, there is even a 50,000 euro profit, as opposed to a total outlay of over 92,000 Euros for renting the same berth over the same ten year period.
| Rental charges with just a 7% annual rental increase. | Berth value with a 7% annual growth | |||
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| Year 1 - 2009 |
6,700.00 |
Year 1 - 2009 |
75,000.00 |
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| Year 2 |
7,169.00 |
Year 2 |
80,250.00 |
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| Year 3 |
7,670.83 |
Year 3 |
85,867.50 |
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| Year 4 |
8,207.79 |
Year 4 |
91,878.23 |
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| Year 5 |
8,782.33 |
Year 5 |
98,309.70 |
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| Year 6 |
9,397.10 |
Year 6 |
105,191.38 |
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| Year 7 |
10,054.89 |
Year 7 |
112,554.78 |
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| Year 8 |
10,758.74 |
Year 8 |
120,433.61 |
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| Year 9 |
11,511.85 |
Year 9 |
128,863.96 |
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| Year 10 |
12,317.68 |
Year 10 |
137,884.44 |
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Total rent paid 10 year period |
92,570.20 |
Value of berth year 10 |
137,884.44 |
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Profit |
62,884.44 |
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| Less community charges |
12,000.00 |
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Actual profit |
50,884.44 |
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Average annual saving for 10 years |
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| Annual rental cost - 10 years |
9,257.02 |
P.A |
-5,088.44 |
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Availability & security of tenure.
A large proportion of marina berths in the Mediterranean are privately owned and many of the marinas do not allow a private owner to rent their own berth out, even if you can find one. The marina will rent it out if its empty, but this is where the problem of security of tenure arises. If the owner returns and wants to put his boat on it, or wants to sell it, the renter has to leave. Fine if there is another berth of that size, but if not the renter would have to find another marina with a suitable berth.
Rental prices.
Over the past 5 years, marina rental charges have almost doubled in price. For example, a 20 metre berth in one marina on the Costa del Sol, could be rented from the marina in 2003 for 8,008 Euros. The same berth in 2008 will now cost over 17,400 Euros - a 115% increase in just a 5 year period. In some of the more desirable locations, such as Antibes in France, The Balearics, or marinas such as Puerto Banus, the increases in rental charges and the increase in berth prices have been even more dramatic.
Increase in berth values.
The purchase price of berths over the same period have also risen by a similar amount. When rental prices rise, the purchase price of a berth will tend to rise also, and the same 20 metre berth used as an example above could have been bought for 80,000 Euros in 2003, but would sell today, even with the current credit restrictions, for circa 150,000 Euros. It is also true that some owners have recently found the need to sell their berth quickly to raise cash, giving rise to some lower priced bargains, but it is conservatively anticipated that berth prices, whilst possibly stagnating for a year or two, should still show a modest overall increase of no less than 90% over the next 10 year period.