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Old 11-13-2014, 09:50 PM   #1
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Resale value

Planning on purchasing trawler in the 40' range in the $50,000-$100,000 price range. Then live aboard for 2-5 years with 2 people. (Or longer?) The boat would obviously be an older boat, hopefully depreciated substantially. Realizing there are many variables, could I realistically expect to be able to sell it for nearly what I paid for it? Perhaps maintaining an equity position with 10-20% down?

Live in the Seattle area. Thoughts?
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Old 11-13-2014, 09:57 PM   #2
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Check out the Island Gypsy 36'...good price. Overpowered but priced well. Its in Seattle.
I'm new at this, so I'd get as much info on the boat from members as you can possible get.
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Old 11-13-2014, 10:20 PM   #3
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Didn't see it listed on yachtworld. Where can I find info?
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Old 11-13-2014, 10:54 PM   #4
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in my humble opinion, the depreciation you suffer will be very dependent upon the upkeep and improvement costs you invest. Most probably, any depreciation will pale in comparison to the costs you choose to incur in maintenance and improvements. Personally, I would not worry about depreciation provided that you purchase a brand that you can readily resell. Think about the holding costs. Good luck!
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Old 11-13-2014, 11:27 PM   #5
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Interesting question and like most questions that are a bit complex the right answer is probably 'it depends'. I agree with a previous post here in that depreciation and maintenance/repair/improvement must be considered together to make any sense of the question. My opinion though, is that when you combine these and consider the question over a wide range of boats by age, size, and build/design quality, an average boat will cost over 20% of its value to own per year. Especially around Seattle. Best may be 10% which is the guideline you often hear, but I think that is pretty optimistic and usually includes a lot of wildly discounted DIY labor. I would bet that 25% is as common as 10%. I am assuming you're going to cruise it a little at least.
If you buy a 40' boat with enough 'stuff' in/on it to make living aboard appealing for 100K and own it for five years, somewhere between 50 and 80K will be vaporized in the process.
Well worth it, but you probably should plan on something like that in my mind. Anything better than that outcome would be a bonus.
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Old 11-13-2014, 11:52 PM   #6
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Through three boats now, we wait patiently for very good deals and buy well below book value (for what little book value means on boats), and then we spent a good chunk of money on good maintenance and upgrades while we own and use them. After a few years if we can sell it for what we paid initially, we figure we're doing pretty well. We never expect to recover the maintenance, updating and upgrade costs we incurred in the meantime,we kiss off those expenses.
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Old 11-14-2014, 12:22 AM   #7
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I don't think it's particularly smart to get into a cruising boat as an investment. While you might be able to sell a boat for more dollars than you paid for it, it seems that the additional dollars don't amount to much when you roll in inflation and the changing value of the dollar.

For example, in 1998 we paid almost twice in dollars what our boat sold for new in 1973. But when you roll in inflation and the changing value of the dollar, we actually paid less than half what the boat had sold for new. And this is a "high end" boat, at least in theory.

There are certainly exceptions, and the circumstances of every buyer and seller will dictate how much "value" a boat retains over it's most recent selling price, as will the boat's condition.

I know a couple of people who sold their boats for more than they paid for them even accouting for inflation and the changing value of the dollar. But..... if you added in the amount of money they had spent on the boat over the years they owned it, they in fact lost a fair amount of money on the boat.

Our own view when we bought our boat was that we would never see a dime out of it. We were buying it as something we wanted to do, and whatever the boat and the cost of owning it amounted to in the end was the price we paid (and were willing to pay) to have the experiences having such a boat would give us.

I don't know what we'll do with it when we can't use it anymore. Sink if for a fish habitat if that's legal is one thing we've talked about. Willing it to somebody we think might enjoy having it. Or we might sell it. We'll do what we do when the time comes. But we don't expect to realize any sort of profit, let alone a break-even return on what we've spent. If we hadn't spent the money on a boat we'd have spent it on something else with no return other than the enjoyment of the experience--- travel, horses, who knows.?

I think the only sure way to make money on a boat is to buy a collector boat--- a Hacker Craft, Gar Wood, classic Chris Craft, etc. Like collector cars, these retain and often increase their value simply because of what they are and the fact they are relatively rare.

But a production cruising boat is like a Honda--- it might be working well when you decide to sell it, but there are a bunch of them around and the market is pretty saturated. It's just an old boat, and the market will pay what it pays for an old boat. Which is generally less than what you paid for it when it was a less-old boat.
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Old 11-14-2014, 12:37 AM   #8
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there is no answer every boat and every owner is different. How much can you fix yourself if you buy a fixer. How much of the routine maintenance can you do? Is the work you do up to commercial professional standards so that it will look like it was professionally done and not done by some dumbass with the result of actually reducing the value of the boat. Or if you are having a yard do all the work, well they better be paying you to take the boat if there is very much wrong with it. The yards and marinas are littered with fixer upper boats that have been started on and never finished. There is a beautiful (once upon a time) wood schooner here you could have almost for free. A hundred thou in yard bills and you will have a nice boat. Or maybe a Chris Craft. Guy paid 4 grand for it dumped 4 grand into it and has now quit paying the marina bill. So far it is still floating.
So can you hold even on a boat - sometimes. Can you buy a boat fix it up use it and get back what you put into it? Well it can be done but not often and not by many.
My advice is to figure that what ever you pay for the boat and what ever you spend on the boat is money gone forever.
Then at the end what ever you get back you can say to yourself. I came out ahead of where I expected to be. I made a great deal on that boat.
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Old 11-14-2014, 07:15 AM   #9
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Paint sells the boat.

For a quicker sale good maint logs and oil sampling will do more than $50k of yesterdays electric toys.

If you mostly plan on a cottage on the water , living at a marina , purchase a boat set up for this operation.

If you will be operating , cruising for those years , ALL the equipment will be selected for cruising , not playing house afloat.

Chose what you need and eventually , sell it to someone with the same needs.
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Old 11-14-2014, 07:42 AM   #10
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I don't think it's particularly smart to get into a cruising boat as an investment. While you might be able to sell a boat for more dollars than you paid for it, it seems that the additional dollars don't amount to much when you roll in inflation and the changing value of the dollar...........
A boat should not be considered an investment. It's like a car or mobile home. It will go down in value over time. The only time it won't go down in value is when it no longer has any value. At that point it becomes a liability because you have to pay to have it scrapped or illegally abandon or sink it.

If you can't afford to absorb the loss in value, a boat is not for you. Buy a house or condo.
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Old 11-14-2014, 07:52 AM   #11
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There will only be a total of two people living on boat with occasional guest. We are empty nesters that still work. Plan on taking boat out on weekends with occasional evening cruises.
What I'm comparing costs to is against renting. I know that at the end of 5 years of renting I will have zero $. With a boat, even with depreciation, it should be worth something after 5 years. (Depending upon health and experience, we could just to keep boat, build house, and move back to land.)
Maintainance on boat comparing to owning a home. Still have cost of home Maintainance, in this case just putting $ into boat. Recognize boat will be more Maintainance $, but worth it to protect "investment".
Obviously there are many variables, but if I buy well, with a good brand boat, that could sell, take good care of it, seems like I would come out better than renting. Plus have more fun!
Is my thinking sound? Or, is this just plain idiotic?
Thanks for replies so far.
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Old 11-14-2014, 08:03 AM   #12
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Jda55

If your comparing it that way it sorta makes sense

I assume your talking about borrowing the money for the boat

on a older boat maintenance can be very expensive

TF members have experience to help
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Old 11-14-2014, 08:12 AM   #13
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I can say that you (likely) won't make money on a boat...the math just isn't there.

The best you can hope for is to break even on the purchase price. That is with good maintenance which must include all systems and cosmetics.

If you buy it right, keep after it, and it was in good condition when you purchase I think that your goal of 10-20% depreciation is realistic. Figure, into your budget that 'keeping after it' means spending 10%-20% of purchase price per year on upkeep. Big range i know, but you will be closer to the low side if you are willing to tackle most projects DIY and/or shop around for the best price.

Sure you could scrimp, but anything deferred will either cost you more in the long run or will impact the resale price.

Good luck in your decision.
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Old 11-14-2014, 09:02 AM   #14
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All good points, but money, inflation, values, etc., are just really abstract thoughts of man, and are 100% subjective. The ONLY thing thats factual is time. That nobody knows how much they have left until the second it's up, and all the money, investments and other man made concepts can't help you get time back, nor anymore of it.
Go look in the mirror and see it's trail. Time wasted worrying and waiting for more of the other is literally time lost. As a broker for 40 years now, the saddest thing I regularly see is guys dieing before they ever did anything. Spent their whole lives talking about buying a sportscar, buying a boat (even a small one) riding a motorcycle across the country, traveling, ="when I retire, kids get out of college, win the lotto, wife gets her knees fixed, my health gets better" and did NONE. Of course the widows usually do-with a younger more fun guy who will gladly help her spend 'Bob's money'. Of course I realize it's lots easier to dream than do (buying toys and making decisions is a lot of work) but it seems like a waste to me. Better to be an active hobo than a sedentary rich guy "counting one's beans".
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Old 11-14-2014, 09:08 AM   #15
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Jda, I'm contemplating a very similar thing. From what I can tell so far, you'd have to add up that maintenance cost on the boat, plus moorage fees, regular pumpout charges, electricity bills, laundry fees and hassles, in addition to the interest on the loan and the cost of the comprehensive insurance policy the lender would insist upon. Even if you got what you put into it at the end of the several-year period, I figured it would still be cheaper to rent a 2-bedroom apartment!

In my case (and I assume yours as well), you'd have to balance that with the value you get from the ownership of the boat and the experiences it allows you to have, that you wouldn't have were you to just rent an apartment.

Where were you thinking of mooring it? I'm kind of curious as a local guy....
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Old 11-14-2014, 09:32 AM   #16
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Originally Posted by Jda55 View Post
What I'm comparing costs to is against renting. I know that at the end of 5 years of renting I will have zero $. With a boat, even with depreciation, it should be worth something after 5 years.
OK, now you have something in the realm of possibility.

Where will the boat come out as opposed to renting???

My guess is that if you compare the boat to renting a waterfront condo you'll come out very well.

If you compare the boat to renting a cheap apartment, probably not so well.
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Old 11-14-2014, 09:37 AM   #17
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What I'm comparing costs to is against renting. I know that at the end of 5 years of renting I will have zero $. With a boat, even with depreciation, it should be worth something after 5 years. (Depending upon health and experience, we could just to keep boat, build house, and move back to land.)
Maintainance on boat comparing to owning a home. Still have cost of home Maintainance, in this case just putting $ into boat. Recognize boat will be more Maintainance $, but worth it to protect "investment".
First of all, if you are renting a house, maintenance costs and hassles of getting it done are built into the rent. (Not clear from the above if contemplating renting or owning house). Keeping a live aboard boat in seaworthy condition is pound for pound more expensive than maintaining a house. House doesn't have big diesel engine(s), transmission(s), a regularly used generator (if one at all), batteries, multiple voltages and AC/DC electric, and so on and so on.

If I were in the OP's position (which we have been) I would rent/own a house until ready to go cruising full time, and charter/rent a boat when I wanted to go boating now and then. Plus you will get a much bigger "home". Much more economical, take it from me. A bonus is you get to try out different types and sizes of boat so when you are ready to go cruising, you know just what you want.
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Old 11-14-2014, 09:41 AM   #18
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Compared to renting I think your chances that the boat will come out better are pretty good. It will be worth something at the end of the day. Assuming of course that you buy well.
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Old 11-14-2014, 09:47 AM   #19
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No, not likely. You could use the Delta plan. Find a old rental house boat, the kind with aluminum siding and steel pontoons. They're around for less then ten grand, maybe even free. Use it without spending any money on it, should last 4-5 years, maybe more. Decorate it with old bicycles and barbecues. When the tubes begin to leak, haul it out on a beach and smear black jack on the bottom, that will buy you another year or so. When your tired of the life style, or paying for a berth you can cut it loose and let it drift down the river or sink it at the dock. That's the only way I know of breaking even with a boat.
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Old 11-14-2014, 09:51 AM   #20
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Also keep in mind every two years or so, it will be necessary to do a haul out and bottom job. During that time, you and your partner will need to make alternative living arrangements. That will add a few $ to your budget.
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