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Old 09-30-2010, 04:39 PM   #1
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round-trip costs, etc

In an earlier post, one piece of rookie advice to me was to minimixe my "round-trip" costs on my first boat.* This sounds like a noble goal, but which of these 2 scenarios has the best chance of mininmizing my round trip costs?:
1. we buy a nice older larger trawler...not super fancy, but well maintained...but not a top of the line brand...say a chb, or a island gypsy, or a mainship.* There appear to be more of these on the market (probably because more exist), and the prices seem to be softer.
...or....
2.* we buy a smaller Nordic Tug.* There appear to be fewer for sale, and prices are firmer.

For purposes of this example, lets assume that the total dollar outlay difference is meaningless...we only care about the diffenrce between buy/sell.* Not a good assumption, but the admiral seems to think it is...

5 years from now, we decide to try and sell.* Do we lose more money in #1 or #2? (note that i know we will "lose") The tug will be easier to sell (it appears).* Will this make up for the initial higher price? What is the spread between the bid/ask? (sorry, I was a stockbroker in my former life)

Also, there was a rule of thumb suggesting 10% of the purchase price would be spent in maintainence, etc. each year.* Does this hold for this situation? Would I really spend significantly more on the tug?(other than insurance) That seems counter-intuitive..
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Old 09-30-2010, 06:24 PM   #2
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round-trip costs, etc

If you get into boating thinking that the boat represents any sort of investment you're getting into the wrong past-time. I believe one should get into boating because they have a serious desire to do this and they should get the boat that best meets their needs, which includes budget. To start out thinking about recouping costs or minimizing loss is logical to do and might even make some sense to a degree, but it shouldn't be what defines the boat for you.

Unless you are buying a vintage collectable boat like a Hacker Craft, Gar Wood, or Chris Craft, just about every boat out there will lose money in terms of value. We paid over twice as much for our GB as it cost new in 1973 but that's not an increase in the boat's value, it's a decrease in the dollar's value. In terms of apples-to-apples value, our boat has lost a lot of it in the past 37 years. And a GB holds its value more than most other boats of this type.

There are so many variables in the resale value of boats that I believe it is almost fruitless to try to base a purchase decision on them. Depending on what you believe and who you talk to the economy could/probably will/will take another nosedive in the immediate/near/not-so-distant future*and a boat---any boat--- will plunge in value and be almost impossible to sell unless you're in the super-rich category that remains unaffected by economic mood swings. In which case you wouldn't be considering little piss-ant boats like Nordic Tugs, CHBs, etc. anyway. You'd be looking at a custom Delta or something.

To me, the smart thing to do is buy the boat that will best do what you want it to do for the money you have to spend, be it a CHB, Bayliner, GB, Nordic Tug, Krogen etc. Whatever it is, its value will most certainly have dropped a fair amount when the time comes to sell it.

We bought our boat for cash and never expect to see a dime out of it. In this respect it's no different than any other hobby, be it recreational flying, model railroading, fly fishing, etc. The only return and reward is what you and your partner get from the experience, not from whatever money you might recoup at the end.

The ten percent per year of the boat's selling price (some people prefer "value") has proven pretty accurate for ownership costs over the long run for most boats of the type we're talking about here. Realize this is a VERY rough estimate-- some years will be more some will be less--- but over time it has proven to be pretty reliably in the ballpark. Note that ownership costs DO NOT include payments and interest if you finance the boat. They include all the annual costs associated with owning, operating, and maintaining the boat.

-- Edited by Marin on Thursday 30th of September 2010 06:26:03 PM
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Old 09-30-2010, 07:39 PM   #3
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RE: round-trip costs, etc

A couple random thoughts:

1. "Well maintained" is much harder to determine the older a boat is, unless it has COMPLETE service records, which are probably only with a one or two owner boat, buying from someone who is obsessed, and if hey are obsessed, they will be trying to recoop some of their sweat equity, which means you will pay more....if they are obsessed enought with their boat to follow every manufacturer reccomendation and maintain every peace of equpment as such, have an open checkbook, and have maintained it to the highest of standards, it will have become a part of their family (for lack of a better analogy), so they will hold on their price longer...

2. Unless you have a really high end boat like a Hinkley, Oyster, or some of the others mentioned, I think they all drop at the same rate per year to a certain point before slowly leveling off after 10 years....

3. Most of my buyers are offering 20-40% off the current list price on the boats we submit offers on, and getting them. The asking price for the late models say 2-3 years old, is probably 30-40% less then what they paid for them, in general, because the market is so flooded right now. Going into fall, prices are dropping like rocks still trying to get interest in the boats...do the numbers on the percentages above, not pretty...

4. I always use the 10% rule when explaining costs to expect.....on a new boat, if you do less maintenance whether is is mechanical, cosmetics, underwater, etc just because if seems like it needs less, you can probably get away with less then 10% for a few years, but then you will spend more then 10% a few years later getting everything back up to speed. On older boats if you are using it reguarly , 10% is pretty accurate, but could be more when an older piece of equipment has an unexpected but fairly common catastrophic failure and needs replacement.....so if you feel like you are doing everything that the manuals say to do and getting away with less then 10%, hide the rest under a bunk or in a locker for a upgrade, replacement, or refit.

my advice on that last one, have 20% in your budget, have a maintenance plan that spends 10%, and every now and then spend some money on her, just to keep her happy.
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Old 09-30-2010, 08:22 PM   #4
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RE: round-trip costs, etc

Quote:
Marin wrote:

If you get into boating thinking that the boat represents any sort of investment you're getting into the wrong past-time. I believe one should get into boating because they have a serious desire to do this and they should get the boat that best meets their needs, which includes budget. To start out thinking about recouping costs or minimizing loss is logical to do and might even make some sense to a degree, but it shouldn't be what defines the boat for you.

Unless you are buying a vintage collectable boat like a Hacker Craft, Gar Wood, or Chris Craft, just about every boat out there will lose money in terms of value. We paid over twice as much for our GB as it cost new in 1973 but that's not an increase in the boat's value, it's a decrease in the dollar's value. In terms of apples-to-apples value, our boat has lost a lot of it in the past 37 years. And a GB holds its value more than most other boats of this type.

There are so many variables in the resale value of boats that I believe it is almost fruitless to try to base a purchase decision on them. Depending on what you believe and who you talk to the economy could/probably will/will take another nosedive in the immediate/near/not-so-distant future*and a boat---any boat--- will plunge in value and be almost impossible to sell unless you're in the super-rich category that remains unaffected by economic mood swings. In which case you wouldn't be considering little piss-ant boats like Nordic Tugs, CHBs, etc. anyway. You'd be looking at a custom Delta or something.

To me, the smart thing to do is buy the boat that will best do what you want it to do for the money you have to spend, be it a CHB, Bayliner, GB, Nordic Tug, Krogen etc. Whatever it is, its value will most certainly have dropped a fair amount when the time comes to sell it.

We bought our boat for cash and never expect to see a dime out of it. In this respect it's no different than any other hobby, be it recreational flying, model railroading, fly fishing, etc. The only return and reward is what you and your partner get from the experience, not from whatever money you might recoup at the end.

The ten percent per year of the boat's selling price (some people prefer "value") has proven pretty accurate for ownership costs over the long run for most boats of the type we're talking about here. Realize this is a VERY rough estimate-- some years will be more some will be less--- but over time it has proven to be pretty reliably in the ballpark. Note that ownership costs DO NOT include payments and interest if you finance the boat. They include all the annual costs associated with owning, operating, and maintaining the boat.

-- Edited by Marin on Thursday 30th of September 2010 06:26:03 PM
That is the most well thought out thing I have ever* heard.* Listen.* if you cannot get into boating then don't get into boating.* It isn't easy.

*
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Old 09-30-2010, 10:23 PM   #5
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RE: round-trip costs, etc

I think I was the one to mention it but FF put the name on it.*What I had in mind was to buy a boat that checked out fine whereas all of them were almost all alike and sold for about the same price. In the used car business a dealer told me you don't make money when you sell a car * * ....you make the money when you buy the car. Car dealers all sell the cars for about the same prices but if you could look at their paperwork you'd find that buying prices vary a lot. The real pros work hard at buying cars cheap and succeed. They hire run-of-the-mill salesmen to sell cars and they work hard buying them cheap * * ...and make good money. Right now an older 32 NT sells for 100 to $120K. If you can buy one for 95 in good shape you could use it for awhile and sell it quickly for another $95,000. That's low round trip cost. Most people buy high thinking it's the most beautiful boat they can find and usually find there is much wrong w it and get in deeper yet and FREQUENTLY it gets worse than that. A good turn around boat is the Albin 25. They all look the same and sell for about the same. If you buy one for a good price (good = below real value) and have it well surveyed so it won't bite you in the fantail you almost can't loose. And if you where to find the good buys and can close the good deal you can drive around on a 2 or $300000 boat forever
...for free. All you've got to do is buy them right, know what your'e buying and do it.
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Old 09-30-2010, 10:57 PM   #6
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RE: round-trip costs, etc

Quote:
nomadwilly wrote:


....you can drive around ...forever...for free.
Don't know where you get this "free" bit.* Even if you sell*a boat for what you paid for it, and even if the selling value is equal to the buying value, you will have hocked up a*bunch of money in between.* Moorage, insurance, fuel, service, mainteance, upgrades, repairs, the beat goes on.* Buy a $100K boat and you'll be plunking down an average of $10K a year for the privilege of driving it around.* Have a major problem--- new exhausts, new shaft(s), major fiberglass or subdeck work, etc.--- and that ten percent could become twenty percent one of the years you own it.*

You don't get ownership costs back when you sell the boat.* If you're lucky, and if you have a boat that still commands some demand as Eric describes, you might not take a significant loss when you sell the boat.* But it's an almost sure bet that you won't be making any money unless you bought a Hacker Craft.* But to think you can boat for free if you buy the right boat is a fairy tale.* The bills start coming in the day you buy a boat and they don't stop until the day after you sell it.* As Egregious said, if you aren't*getting the*amount you'll spend to own a boat back in the enjoyment of owning it, you shouldn't own a boat.* Take away the value of the enjoyment and a boat is a losing investment any way you look at it.
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Old 10-01-2010, 03:57 AM   #7
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round-trip costs, etc

Moorage, insurance, fuel, service, mainteance, upgrades, repairs, the beat goes on.

You are mixing the operating costs , what you pay to enjoy the hobby , with the IN vs OUT cost.

The biggest UU (unknown uncontrollable) is the maint cost , which really depends on the quality of the survey.

Filling a fuel tank to drive about is operating cost, REPLACING that fuel tank is part of the maint cost , so part of the round trip.

An additional concept is labor is a major part of most repairs.

The boats "value" might increase with a new engine, But the cost of the installation can vary by a HUGE percentage.

EG old ford tractor engine dies?( Leman Econopower), You yank it , break it down send the parts to the machine shop , install a rebuild kit and you are $2000 to $4000 poorer.

Replace the tranny with a rebuil;t Twin Disc , another $2K.

Have the yard install a new J Deere , you are $30,000 poorer.

The value of an old boat will change with a fresh engine/tranny , but will never justify/realize the $25,000+ difference.

Same deal with rotten TT decks , loads of work and $5000 + in materials if YOU patch it up , less work, but probably an extra $20K to have a yard attempt the repair.


Cars can be surveyed easily , boats require a pro, to keep the R-T realistic.

The cheapest RT is usually a high production boat about 5 years old ,( Bayliner or similar ?) where the price is really low , but there is always market demand.
Just keep it up , and at 10 years the losses will not be that great.

"Upgrades" esp electrical toys are always a dead loss, there outdated by time there installed and operating.

A new heating or air cond system MIGHT get some cash back, depending on the location the boat will operate in..





-- Edited by FF on Friday 1st of October 2010 03:59:57 AM
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Old 10-01-2010, 04:31 AM   #8
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RE: round-trip costs, etc

The crowd on this board is more sophisticated in their buying habits, but the general public doesn't give a damm about* maintenance, additional equipment, etc. They only see a set of 1990 Cruisers 3950's with a range of prices, and most will pick the lowest one, even if it has smaller engines, no maintenance logs, less optional equipment, etc. You can't ever plan on getting back any money you spent on the boat, and hope that when you're selling these junkers aren't on the market.
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Old 10-01-2010, 04:54 AM   #9
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RE: round-trip costs, etc

Woody Cooper wrote regarding Marin's post....

"That is the most well thought out thing I have ever heard. Listen. if you cannot get into boating then don't get into boating. It isn't easy."

I would agree except for the bit that went....

"In which case you wouldn't be considering little piss-ant boats like Nordic Tugs, CHBs, etc. anyway. You'd be looking at a custom Delta or something".

Marin, how dare you call my boat a little piss-ant boat. You go and wash you mouth out ssssonny.
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Old 10-01-2010, 05:23 AM   #10
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RE: round-trip costs, etc

You got a Lehman in there?
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Old 10-01-2010, 10:27 AM   #11
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RE: round-trip costs, etc

Marin,Round trip costs are cost in v/s cost out. If you're going to play w it, mess w it or modify it that can be money down the WC
Your boat is beautiful. And I just can't help it if you don't have any taste.
And I'm not swallowing that crap about you buying a boat that you didn't think was attractive. Get a grip * * ....whatever that means.
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Old 10-01-2010, 10:57 AM   #12
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round-trip costs, etc

Quote:
nomadwilly wrote:And I'm not swallowing that crap about you buying a boat that you didn't think was attractive.
We bought a GB for the same reason people buy Hondas.* From an aesthetic point of view, Hondas and the cars that look like them are the most boring cars on the planet.* But they work well, they last a long time, and for people who either don't care about aesthetics or who have (in my opinion) a poor sense of them, a Honda is a smart car to buy.

We feel exacty the same about a GB.* It's the Honda of the boat world.* Well made, reliable (at least the parts that American Marine/Grand Banks made), intelligently laid out, but with boring, unaesthetic, out-of-proportion lines.* Given the money we wanted to spend and what we wanted to do with a boat, it was tne most sensible thing to get.

Like a Honda, we don't regret the purchase at all, but we'd have rather gotten an Aston Martin Vantage.

You want to talk boat aesthetics with me you have to talk about things like Flemings ( and the deFever design that inspired it), the smaller Krogens, lobsterboats (working and recreational like Carey's), west coast salmon trollers, some of the langustine trawlers I've seen in northern Scotland, the now-extinct aku (tuna) boats in Hawaii, Victory Tugs (which I know you don't like which explains why you think a GB is a good-looking boat), and so on.

In terms of "trawler-style" boats I think the two boats pictured below to be FAR more beautiful in terms of their lines, proportion, and balance than a blocky, awkward Grand Banks.* The first one was a working* boat, the second one was designed from the outset as a recreational boat.




*


-- Edited by Marin on Friday 1st of October 2010 07:14:17 PM
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Old 10-01-2010, 11:01 AM   #13
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RE: round-trip costs, etc

Marin,
I have to agree with you on that second picture.

Really cool looking boat.

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Old 10-01-2010, 12:06 PM   #14
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round-trip costs, etc

Chinook is actually somewhat famous. I wish I could remember the naval architect's name, but he designed the boat in the late 40s or early 50s and then built it and he and his wife cruised it extensively along the east coast for many years. He was a fairly famous designer and was also a regular contributor to one or more of the prestigious boating magazines of the day. The boat was featured in several magazine articles in including (IIRC) "Wooden Boat."

When the boat was sold it was trucked or trained out to the west coast. For many years it was in the slip next to ours and the owner (who would have been the third owner I believe) kept it up and used it a lot. When the boat was built it had a small flying bridge that sat on* the large hatch that can be removed from the main cabin overhead to remove the engine. The little flying bridge had rotted badly and been removed but the third owner had plans to make a new one to the original specs. He said he didn't care for the look of it but he wanted to bring Chinook back to her original configuration. He had to sell the boat before he could do this and the current owner has taken her to Port Townsend, so we don't see her anymore.

Chinook was powered with her original Cummins engine but I don't know the model.* The most significant thing the owner we knew did to the boat besides simply keeping her up was a total rewire of the entire boat.

The inside of the boat consists of relatively small spaces. The galley is tiny and is down and forward of the main cabin.* The main cabin is very nice.* The main "stateroom" is aft of the engine room and ahead of the raised aft cabin.* The aft cabin has a head and shower and storage as well as an access companionway to the deck.* It is definintely not a boat for large people or anyone with a mobiity impairment.

-- Edited by Marin on Friday 1st of October 2010 07:17:48 PM
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Old 10-01-2010, 11:53 PM   #15
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RE: round-trip costs, etc

Marin, I agree with you. The Flemings are really good looking well proportioned boats, and the GBs are often not, (but I kinda like the Aleutian). On the other hand the Selene looks better. I think.
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Old 10-02-2010, 04:42 AM   #16
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RE: round-trip costs, etc

The crowd on this board is more sophisticated in their buying habits, but the general public doesn't give a damm about maintenance, additional equipment, etc.

It still goes back to the simplistic,

PAINT SELLS DA BOAT!
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Old 10-02-2010, 11:51 AM   #17
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RE: round-trip costs, etc

Quote:
Peter B wrote:

On the other hand the Selene looks better. I think.
The main problem with all the Selenes I've seen is they have those stupid forward-raked windshields which to me totally negates everything else the designer did right.* So in my book, I consider the Selene to be a very ugly boat (as I do every recreational boat with a forward-raked windshield).

*
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Old 10-02-2010, 05:36 PM   #18
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RE: round-trip costs, etc

Quote:
Marin wrote:
The main problem with all the Selenes I've seen is they have those stupid forward-raked windshields which to me totally negates everything else the designer did right.
Unlike Marin, I am waiting for Honda to announce their new SUV with a forward slanting windshield.*

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Old 10-02-2010, 06:11 PM   #19
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RE: round-trip costs, etc

Quote:
stupid forward-raked windshields which to me totally negates everything else the designer did right.

We were on a one off pilot house trawler*with forward-raked windshields.* I was amazed at the visibility.* They lost some dash board room but the view of the fore-deck was unlimited.* I have to say*they looked pretty good from the inside.

Larry/Lena
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Old 10-02-2010, 06:53 PM   #20
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RE: round-trip costs, etc

Quote:
Larry M wrote:I have to say*they looked pretty good from the inside.
I'm not saying that forward-raked windows are not functional or beneficial.* There's no question that they are.* I'm just saying that to me, they're ugly and they ruin the lines (in my opnion) of every boat I've seen them on, be it a Foss tractor tug or a Selene.

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