So, you love the sea and land has become somewhat boring, I agree! Now you have the option to purchase an apartment and travel the world from your home. Depending on where you live this could be a bargain or splurge. A man named Austin Wells is exploring this real estate alternative. He is a proud owner/leaser of a $300,000 studio apartment.
The boat offering this option is called the MV Narrative will start operating in 2025. Prices range from $300,000 to $8 million.
Does this real estate alternative make financial sense?
Wells finds himself facing a critical decision regarding his real estate investment. He has a 12-year lease on his 234 sq ft studio and has two options at the end of the lease term. The first option is to complete the lease and walk away with northing, while the second option is to sell the studio after a few years.
If wells decide to retain the studio for the entire lease term, his overall cost will amount to approximately $2000. However, it’s important to note that upon completion of the lease, Wells cannot sell his studio. In this scenario, the studio operates similarly to a rental property. This is particularly relevant considering that the average rental cost in Wells’ hometown of San Diego is approximately $1,800.
On the other hand, Wells also has the opportunity to sell his studio after a certain period. It’s worth mentioning that there is no clear precedent for this specific situation, which introduces an element of uncertainty. In such cases, the studio’s resale price might yield a profit, or alternatively, it could experience a decline in value similar to a timeshare.
The hybrid option might be an Airbnb. This will depend on his contract with MV Narrative. He might find an untested niche market. Since long cruises are expensive and his cost is fixed this might be a profitable option.
It is also unclear what other costs/benefits are included with this purchase. He could be asked to pay a large monthly fee for ship maintenance and crew similar to a Homeowners Association (HOA). He also did not mention if port fees are included in the purchase price.
