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?

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.

Didn't see it listed on yachtworld. Where can I find info?

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!

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.

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.

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.

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.

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.

Marin said:

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...........

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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.

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.

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

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.

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".

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....

Jda55 said:

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.

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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.

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".

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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.

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.

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.

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.

Jda55 said:

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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I think you've already convinced yourself and you're just asking for validation. You may be right, you may be wrong. The only logical reason to live on a boat or own a boat is because you love boating and being on the water.

I think it sounds like a great plan. Too many variables to know if you'll come out ahead, financially. But what a difference in lifestyle you will have over those 5 years. Go for it.

Think about your ability to absorb unexpected expenses, particularly if you plan on using the boat for cruising.

When you rent a house/apartment the landlord takes the risk that the furnace dies, the roof leaks, etc. When you own the boat, you're responsible for fixing everything. And fixing boats can get expensive quickly.

Last year the furnace on my boat needed servicing twice (about $400 for parts and labor each time), the windlass died and needed to be replaced (about $4000 when all was said and done), all the batteries needed to be replaced ($2000), the bottom needed painting and dripless shaft seal needed replacing and some other misc. work ($4500)...not to mention other bits of engine and systems maintenance... Plus insurance, taxes, slip rental...

Now, if you don't cruise, you don't need the windlass, good batteries, fresh anti fouling paint, or engines that run well.

I could rent a comfortable, newish 1 bedroom apartment in a good neighborhood in Seattle for less than I pay for maintenance, taxes, and insurance for the boat (not to mention the opportunity cost of having money tied up in a depreciating asset). BUT I love living aboard...the flexibility to move the boat around the northwest, the ability to cruise the Inside Passage in the summer, being able to hop in the dinghy or kayak and explore whenever the mood strikes...

Living on a boat is a lifestyle, certainly not an investment. If your standards are low it can be done cheaply, delta style, I know people living on old wooden ChrisCrafts or sail boats that really have no value and certainly aren't seaworthy , in fact may not even run that are living the life style, on the water, in an older marina, on a boat worth maybe $5000, living life and enjoying it. They are in fact swimming fishing and kicking back living on the water for next to nothing. Many of these folks are living on disability or social security and living the lifestyle that certainly is better than an apartment. Far better than being homeless living in a tent.

It can be done. We sold our sailboat for a few thousand more than we paid. BUT, we put thousands into it, along with a lot of sweat equity (all work ourselves, including replacing all the standing rigging). We DID NOT get back all the money we put into it, despite selling for more than we paid. But the amount that went into it was well worth it for us in terms of the ejoyment we got back out of it. If we had to sell our NT today, we would probably break even or maybe even sell it for more than we paid. BUT, we would not get out the money we have put into it for upgrades. We expect that. Also consider that it is relatively easy to sell an inexpensive boat yourself. We did with the sailboat. But once you get into larger boats, you will likely want to enlist a broker. If we had to sell the NT, I'm certain we would list it, which would cut into our share of the purchase price. In the end, for us, it isn't a question of what we will get out of a boat when we sell, it is what will we get out of it in terms of enjoyment while we own it. That is well worth the cost to us. We use the boat every week, even in the winter, so for us it is a lifestyle choice.

Carolena said:

It can be done. We sold our sailboat for a few thousand more than we paid. BUT, we put thousands into it, along with a lot of sweat equity (all work ourselves, including replacing all the standing rigging). We DID NOT get back all the money we put into it, despite selling for more than we paid. But the amount that went into it was well worth it for us in terms of the ejoyment we got back out of it. .

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I agree completely...Buy a quality boat, do quality modifications, keep it detailed and maintained and the loss, if any, will be minimal.
I bought an '86 Bristol 35.5 in '94 for $65K.....Put $17K into it over 4 years and enjoyed it immensely. When it was time to sell (corporate move) I got $85K for it and got my company to cover the brokerage costs. My only regret was having to sell due to the move. Not everyone's experience will be the same of course..

Buy a desirable, quality boat of limited production
Care for it lovingly
Sell it fairly when it's time to go

You'll have no regrets ($$) in the end as the experiences during ownership will (hopefull) be priceless...

I'm about to do the same again with my pending Cape Dory 28 purchase..

pilothouse king said:

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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Brilliant Post!


1983 Present 42 Sundeck
Twin Lehman 135's

pilothouse king said:

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.

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Absolutely. This is a terrible thing to do to one's self in my opinion. My mother grew up during the Depression, and she never lost her fear that it might come back again. So even though she wanted to buy a house in Hawaii, travel in later years, and do all sorts of thing, she never did for fear that she'd be caught short of money when the Depression came back.

While I don't advocate spending money foolishly and to the point where one ends up living in a box under the freeway, I and my wife believe that putting things off until "we can afford it" or "we have the time" can be a path to disappointment.

It's why we got into flying a floatplane up and down the Inside Passage countless times when we it would have been easy to talk ourselves out of spending the money. It's why we got into going to the UK every other year to run a narrowboat on the canals when it would have been easy to talk ourselves out spending the money. It's why we bought our diesel cruiser 16 years ago, when it would have been easy to talk ourselves out of spending the money. And our lives have been vastly enriched by the experiences we've had doing these things.

You only go around once on this planet in the life we have right now. Our thought is would we rather lie on our deathbeds wishing we'd run narrowboats and flown the Inside Passage and BC mountains and had years of great cruising on our boat, or do we want to lie there thinking about all the great times we've had doing these things?

In my opinion PilothouseKing has made the best point yet in this thread. Regardless of the specific pros and cons of doing what the OP is contemplating, this should be the most important consideration as long as one goes about making the decision in a smart way.

Where your plan falls apart I'm afraid is that you mentioned 10-20% down. Financing boats like you're talking about is difficult and financing them with small down payments nearly impossible.

Thanks - Needed that today...

pilothouse king said:

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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Sorry if some consider this thread drift... but this resonated with me today. Did sea trial and survey yesterday. Have a chunk of savings ready to transfer hands. Loan approved. Working through final details in the purchase of our first large boat. Feeling the "what have I done" syndrome. Thanks for the reminder of why we decided to do this in the first place!