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Old 07-31-2009, 12:29 PM   #1
timjet
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The real costs of boat ownership

Hi Folks,

Im in the process of selling my sailboat and replacing it with a trawler. Yes, Im nearing retirement and the comfort of a trawler is becoming more and more appealing. Some of you folks have been very helpful educating me on the different types of trawlers and motor cruisers.

My most important consideration in purchasing a trawler is the ability to resell it when the time comes. For this reason Im sticking to popular makes and models in the area I live, Tampa, FL. After talking to repair facilities in this area and you folks, Im eliminating boats with teak decks. My budget of $75,000 will allow me to purchase a diesel powered mid 80s boat in the 34 to 38 ft range. Popular examples in this range are Mainship 34s, several makes of Chinese Trawlers w/o teak decks, and the Bayliner 38.

An important concern with the ownership of a trawler of course is the cost of ownership. I havent seen much discussion of this issue recently so I thought Id run some figures. For this discussion I have based calculations on owning the boat for 6 years. I developed a spread sheet program that allows me to plug in any boat and figure out what the real costs of owning it.

Some assumptions are necessary:
Purchase costs
Tax at purchase of 7%
Survey cost of $15/ft
Bottom paint at survey = $40/ft + $375 per engine
Upgrades and repairs at purchase = 7.5% of purchase price, less on a newer boat.

Annual operating costs:
Dockage $11/ft/mo
Insurance 2.8% of purchase price
Maintenance 5% of purchase price
Bottom cleaning $15/ft/yr
Bottom painting every 2 years

<ul>[*]After owning the boat for 6 Years, selling it with a depreciation of 5% per year or 30% for the 6 years. This figure was derived from my experience in selling my sailboat (it hasnt sold) and the down economy.[/list]<ul>[*]These figures are based on costs in the Tampa area where bottom cleaning monthly and bottom paint every 2 years is necessary.[/list]<ul>[*]Annual Maintenance cost of 5% of course is just an estimate and does not include bottom paint every 2 years. However bottom paint is figured into the cost figures below. Replacement of an engine or genset will certainly change the total annual costs.[/list]<ul>[*]Insurance costs were derived from the actual costs on a Mainship 34 and then linearly computed based on the size of the boat. Includes comprehensive, and liability of $500,000.[/list]Here are some figures for 4 boats. These are the total costs to buy, sell (w/o broker commission) and operate (no fuel costs) on an annualized basis for 6 years:

29 Sailboat (Mine)*** *** 34 Mainship*** *** 36 Taiwanese*** 38 Bayliner

Purchase Price*** $25,000*** *** $40,000*** *** $53,000*** *** $65,000***
Annual Costs*** *** $8,900*** *** $12,000*** *** $14,000*** *** $16,500
Total Cost 6 yr*** $53,400*** *** $72,200*** *** $84,000*** *** $99,100

Note: The Total costs 6 yr figures includes the money received on sale after 6 years with a depreciation of 30% from purchase price without a broker commission on the sale.

Consider this: The cost to charter a Grand Banks 36 or Mainship 35/39 in Ft Myers FL is $4000/wk. This* would allow you to charter for 3.5 weeks per year and equal the ownership cost of a similar sized Taiwanese boat. Or put another way you could charter a Grand Banks 36 for 18 weeks over the next 6 years and equal the cost of owning a Mainship 34 for 6 years.

Another possibility is to purchase a boat and put it into charter. Charter companies will only take into charter later model boats such as a 2002 Mainship 35/39 which you may be able to pickup for $150,000. The same charter company above sent me some figures and after massaging them I came up with the true costs of putting a boat in charter. Again some assumptions are necessary and to keep things short: Boat cost of $150,000, 50% financed, all maintenance provided by charter company, charter income to boat owner of $28,500/yr, and depreciation of 26% over 6 yrs.
Annual costs: $19,833/yr, yes this does include the charter income.

Total costs 6 yr: $119,000
At this rate you could charter the same boat for almost 5 weeks a year.

Sounds like a lot until you consider this same boat not in charter with no financing will cost you $29,453/yr or $175,700 for 6 yr, or almost $10,000/yr more vs. putting it into charter.
To be fair the annual maintenance cost on a newer boat should not come close to 5% of purchase cost nor should you have to figure 7.5% of purchase price for repairs and upgrades on a newer boat at purchase.

So why does it costs so much??
In reviewing my spread sheet the big costs in decreasing order are:
Dockage
Maintenance
Depreciation
Insurance

Dockage accounts for half the annual operating costs in the 34 and 36 boats.
My marina here in Gulfport, FL, near Tampa is considering installing moorings in Boca Ciega Bay which has easy access to the marina. There has been some resistance from the local citizens so if these moorings ever come about is still in question. However, if they are installed I foresee the costs of boat ownership decreased significantly.

So there you have it folks. Anybody know of a good 2 person kayak for sale?
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