Budgeting

Hawgwash · Jul 22, 2015

This is one of those ambiguous “how long is a piece of string” questions. So, when you stop laughing and you don’t mind my prying…

Starting with a well maintained boat;
Taking fuel, annual moorage, insurance, food and wine out of the equation;
An expected 200+/- hours per year in BC and a skipper who is no longer as interested in or capable of the DIY route, other than keeping it sparkly:

What do annual budgets look like for an early to mid nineties 40 something twin cruiser like these?

http://www.yachtworld.com/boats/1990/Ocean-Alexander-42-Sedan-1956568/Tacoma/WA/United-States#.Va_vR8vbJ2M

http://www.yachtworld.com/boats/1994/Ocean-Alexander-42-Sedan-2651891/Huntington-Beach/CA/United-States#.Va_vacvbJ2M

Larry M · Jul 22, 2015

How fast will you be cruising for the most part. The difference between displacement speed and planing speeds could be easily $10,000 or more/year.

MYTraveler · Jul 22, 2015

Hawgwash said:
Taking fuel, annual moorage, insurance, food and wine out of the equation;

Those are my biggest expense categories. Then comes equipment upgrades, but that is almost entirely discretionary -- so it can be what you want it to be.

For engine and transmission maintenance costs, I like to "reserve" an amount equal to what I spend in fuel. That seems to be more than enough, and basically also covers the cost of fixing/replacing failed bilge pumps, etc.

Waxing and washing a boat aren't cheap. I pay about $2/ft for a good washing every couple weeks during the summer, and every month during the winter. I also wax every 4 months for $20/ft.

ranger58sb · Jul 22, 2015

Hawgwash said:
Starting with a well maintained boat;
Taking fuel, annual moorage, insurance, food and wine out of the equation;
An expected 200+/- hours per year in BC and a skipper who is no longer as interested in or capable of the DIY route, other than keeping it sparkly:

What do annual budgets look like for an early to mid nineties 40 something twin cruiser like these?

So you're really hoping to focus on maintenance and repair issues, yes? With somebody else doing the work, right?

I think for us, that would mean:
- annual haul-out, inspection, bottom paint touch up, re-zinc, hull wash and wax, usually something like $2000
- very occasional complete bottom paint (about 5 years since last one), something like $1000
- monthly boat washes (deck and so forth), $100/each
- annual detail wash and wax (deck and so forth), about $800
- annual oil, and oil, fuel, coolant filter changes on mains and genset, probably about $400 in parts and I do that myself, but yard labor for that kind of work here is approx $100/hour
- periodic coolant flush/replacement, have that scheduled (yard work, this time) but dunno cost yet
- annual winterizing, which for us is a shared chore; I do all the water systems (about 10 hours of work), the yard does main engines, genset, and ACs for about $500 including labor and appropriate antifreeze
- other stuff: occasional freshwater pump replacement, occasional freshwater accumulator replacement, occasional saltwater washdown pump replacement, overboard macerator replacement (on holding tank, one fishbox), toilet macerator replacement, toilet solenoid replacement, CO detector replacement, fire/fume/flood sensor replacement, fire suppression monitor display replacement, exterior carpet replacement (cockpit and flying bridge)... parts probably in the neighborhood of $2500, plus labor (but I did all those)

That's just off the top of my head...

Around here, the cost of holding tank pump-outs is beginning to mount up. About $20 including tips every two-three weeks (because usually at our marina's unsubsidized facility). I'm studying treatment systems...

-Chris

clynn · Jul 22, 2015

If you have to ask how much... :pirate:

CPseudonym · Jul 22, 2015

Depending upon what condition you wish it kept in and what breaks, a lot more than you can anticipate.

In my opinion if the purchase price represents more than 50% of your "boat budget" you're gonna have a hard time enjoying boating.

Hiring out a simple oil change on that boat is an almost full day job for twin CAT's and the genny. By the time the mechanic buys the parts, gets them to the boat, pumps the oil out and gets it off the boat without spilling, to the dock and his truck to dispose. You say you will DIY the cleaning but do you have a clue how hard it is to wax 42' of boat?

A lot to think about

GFC · Jul 22, 2015

Hawgwash, it often is the unplanned things that happen at the most inopportune time that can really put the screws to a well planned budget.

For example--
-late last summer I found some skinny water and dinged both props. The result was a haulout (~$2700) plus a trip to Seattle with the props ($150) to get them tuned ($900) and returned to me. While it was out I painted the bottom ($400) and waxed it below the rub rail ($50-did it myself). Zincs were OK. (Phew!)
-a month ago as we were headed into a lock my hydraulic shifter system blew an O-ring. The O-ring caused a blockage in the hydraulic line. The end result was a $500 bill for the repair.

It's things like those that are hard to budget for and can kill a budget if you spend too much on the boat and don't have a big enough kitty for the repairs.

Hawgwash · Jul 22, 2015

Larry M said:
How fast will you be cruising for the most part. The difference between displacement speed and planing speeds could be easily $10,000 or more/year.

Yeah, I'm aware of that and it's why I took fuel out of the mix thanks Larry.

There are things that are needed every year-2-3 etc. that should, over time, give a guy an idea what it costs him annually barring the freezer full of fish falling through the bottom.

Hawgwash · Jul 22, 2015

ranger42c said:
So you're really hoping to focus on maintenance and repair issues, yes? With somebody else doing the work, right?

Yes, right, that's the idea and your comments are what I was looking for.

Thanks Chris.

Hawgwash · Jul 22, 2015

MYTraveler said:
Those are my biggest expense categories

Yup. But all the same we gotta eat and have a jug no matter where we are right? Be a lot cheaper if everyone who came aboard brought a bottle of gas and I supplied all the wine.
Thanks for the input.

Hawgwash · Jul 22, 2015

clynn said:
If you have to ask how much...

Heh, heh, heh.
Well Clynn, that's a pretty old saw and so's this "There's a smart ass on every..." aw, never mind.

Hawgwash · Jul 22, 2015

CPseudonym said:
Depending upon what condition you wish it kept in and what breaks, a lot more than you can anticipate.

In my opinion if the purchase price represents more than 50% of your "boat budget" you're gonna have a hard time enjoying boating.

Hiring out a simple oil change on that boat is an almost full day job for twin CAT's and the genny. By the time the mechanic buys the parts, gets them to the boat, pumps the oil out and gets it off the boat without spilling, to the dock and his truck to dispose. You say you will DIY the cleaning but do you have a clue how hard it is to wax 42' of boat?

Lol, if it takes an expert all day to do a "simple oil change" well maybe if I lose some weight I can fit between those 3208s.

I get what you are saying though and understand the whole buying budget and after enjoyment thing.

Appreciate the feedback.

Hawgwash · Jul 22, 2015

GFC said:
Hawgwash, it often is the unplanned things that happen at the most inopportune time that can really put the screws to a well planned budget.

Same thing with most toys just more so with a boat, and I get that. I'm ok going forward knowing there could be a big hit at any time. I just wondered if there were yearly "get ready" things I hadn't thought of or might be different making a substantial size jump and going from easily accessible gas engines, that I could wrench myself, to diesels in tight spaces. Stuff like that.

twistedtree · Jul 22, 2015

I actually think the 10% rule is a good one to use, i.e. annual costs are 10% of the boat's value. Over a couple of boats, I've found it to come out right around there, but there are a few key caveats.

- I don't consider food, booze, and entertainment as part of the boating budget. That's part of your life budget, and will get spent whether you return to a boat or your home at the end of the day.

- Your typical annual costs may be significantly less than 10%. Mine almost always have been, but I still think you need to plan on 10%. Read on to see why.

- Your bigger boating expenses will come in big lumps. The challenge is that you never know when some of those lumps will present themselves. This is the biggest reason for budgeting 10%. If you can't deal with the big, unexpected hits, then boating may not be such a good idea.

- The big hits come in the form of:

a) initial outfitting and improvements over the first year.

b) surprise repairs

c) commission when you sell the boat.

d) sales price lower than what you paid.

Even if you think you are well ahead of the 10% rule while you are using your boat, it will likely catch up to you when you finally sell it.

caltexflanc · Jul 22, 2015

twistedtree said:
I actually think the 10% rule is a good one to use, i.e. annual costs are 10% of the boat's value. Over a couple of boats, I've found it to come out right around there, but there are a few key caveats.

- I don't consider food, booze, and entertainment as part of the boating budget. That's part of your life budget, and will get spent whether you return to a boat or your home at the end of the day.

- Your typical annual costs may be significantly less than 10%. Mine almost always have been, but I still think you need to plan on 10%. Read on to see why.

- Your bigger boating expenses will come in big lumps. The challenge is that you never know when some of those lumps will present themselves. This is the biggest reason for budgeting 10%. If you can't deal with the big, unexpected hits, then boating may not be such a good idea.

- The big hits come in the form of:

a) initial outfitting and improvements over the first year.

b) surprise repairs

c) commission when you sell the boat.

d) sales price lower than what you paid.

Even if you think you are well ahead of the 10% rule while you are using your boat, it will likely catch up to you when you finally sell it.

Really? So your new Nordhavn costs double or triple (or whatever the selling price difference) to maintain to your standards than say a 15 year old 47 foot boat of similar configuration, from a second tier builder ? Why is that?

Hawgwash · Jul 22, 2015

twistedtree said:
I actually think the 10% rule is a good one to use, i.e. annual costs are 10% of the boat's value. Over a couple of boats, I've found it to come out right around there, but there are a few key caveats.

- I don't consider food, booze, and entertainment as part of the boating budget. That's part of your life budget, and will get spent whether you return to a boat or your home at the end of the day.

- Your typical annual costs may be significantly less than 10%. Mine almost always have been, but I still think you need to plan on 10%. Read on to see why.

- Your bigger boating expenses will come in big lumps. The challenge is that you never know when some of those lumps will present themselves. This is the biggest reason for budgeting 10%. If you can't deal with the big, unexpected hits, then boating may not be such a good idea.

- The big hits come in the form of:

a) initial outfitting and improvements over the first year.

b) surprise repairs

c) commission when you sell the boat.

d) sales price lower than what you paid.

Even if you think you are well ahead of the 10% rule while you are using your boat, it will likely catch up to you when you finally sell it.

Thank you, sir. That is, in a way, what I was thinking and hoping to hear. I know what it cost me in the past but I was doing a lot myself. $3,000 a year for waxing and all day for an oil change are not things I would have contemplated but need to be part of the plan.

I'm not concerned about money down the chute at sell time because that will only be loot my kids don't get. So, knowing I'll never get back what goes into it and I might be lucky to get what I paid for it in five or so years, I can focus on what it will cost each year to have some fun, while I still can.

I gave up biking a couple years ago because it became clear my age was against me in that world. I figure I've got at least 5 more years of good sea legs and that's what I'm working on.

I can buy the boat. I can moor, insure and run the boat. I can sell the boat and recover some of it. I can figure the fixed costs. If a reserve of 20-30k per annum takes care of keeping it in good shape, I can handle that.

Thanks for taking the time to respond.

Marin · Jul 22, 2015

For a used boat I think the 10% of the purchase price (or value) of the boat per year is a good average figure to use when planning a budget for boat purchase and ownership. In fact, the 10% figure was what was being used back in 1998 when we bought our first cruising boat. Today with the rising cost of labor and materials, I would say it's more like 15% if not more.

Ownership cost, as it was described to us, includes moorage, insurance, electricity if one's harbor charges for that, fuel, maintenance, repairs, and upgrades. What it does not include are finance payments if one finances the boat, and expenses one would have anyway like food, clothing, and so on. I assume finance payments are not included as these will go away where all the other stuff never stop as long as you own the boat.

Some boats will be more, some will be less, and some years will cost the owner more than other years. But as a rough average, which you kind of have to use since a lot of boat expenses are unpredictable as to when they will occur and how much they will cost, the "percentage of boat cost/value per year" figure is, I think, pretty accurate.

It has been for the cruising boat we have here, and we do a lot of our own work.

Obviously this percentage of cost/value per year is not accurate for a brand new or newish boat. But once the boat gets some age on her and things begin to wear out, need maintenance or repair, and so on, the annual ownership cost begins climbing.

You can keep the annual ownership cost down quite a bit if you are willing, able, and have the skills and tools to do a lot of the work on the boat yourself. Conversely, you can run the annual ownership cost up quite a bit if you elect to have most or all the maintenance, repair, and upgrade work hired out.

The big driver is labor. In our harbor today, the average labor cost in the yard, at the diesel shop, and so on, is about $100 an hour. Other parts of the country labor may be less than that, and some areas are probably more. It's totally a "what the market can bear" sort of thing.

The only thing that makes the annual ownership cost worth the money is the value, mostly intangible, that one gets from being a boat owner. Slow, fast, showroom condition or well used, the value of a boat is realized by what one does with it, not by the actual dollar value of the boat.

Boats are a horrible investment. Unless one has something like a classic Hacker Craft or Gar Wood or Chris Craft, the value of a recreational boat is always going down. Don't get fooled by the dollar figures. We paid over twice in dollars for our old northwest boat than what it cost brand new. But this is not because the boat had increased in value. It hadn't. At the time we bought this boat, the same make and model, which was still in production, cost new some five times what our boat had cost new.

The reason we paid more in dollars for the boat than the original owner did is all about inflation and the value of the dollar.

We bought the boat not expecting to get a dime of the purchase price or ownership cost back. It was simply the cost of doing something we really wanted to do, and continue to want to do. When we're done using it we're seriously contemplating turning into a fish habitat if we're allowed to do that.

So the two basic things to keep in mind if contemplating the purchase of a cruising boat are it's not an investment, and it will never stop costing you lots of money until the day you get rid of it, "lots" being a relative term of course.

Hawgwash · Jul 22, 2015

Marin said:
The only thing that makes the annual ownership cost worth the money is the value, mostly intangible, that one gets from being a boat owner. Slow, fast, showroom condition or well used, the value of a boat is realized by what one does with it, not by the actual dollar value of the boat...So the two basic things to keep in mind if contemplating the purchase of a cruising boat are it's not an investment, and it will never stop costing you lots of money until the day you get rid of it, "lots" being a relative term of course.

Exactly!
That is why the purchase price and what I get out of it in the end are of little or no concern. I just want to be confident I can tuck enough reserve behind the head to get me through a few more bigass grin years.

Otherwise it's a couple of month long charters and a couple months in Abaco every year.

Your comments mesh nicely with my thoughts.

Thanks Marin.

Retriever · Jul 22, 2015

Marin said:
We bought the boat not expecting to get a dime of the purchase price or ownership cost back. It was simply the cost of doing something we really wanted to do, and continue to want to do.

I did the same thing, although I suspect the math will work out better.

Be conservative. Boats have a way of eating money at alarming rates. Will a $4,000 unexpected repair break the bank? What about $20,000? or $40,000?

FWIW, my 2000 37' Nordic Tug cost me about $30,000 all in to own in 2014. I suspect it will be similar in 2015.

Art · Jul 22, 2015

I recommend budgeting $35 dollars per day for every day you are NOT aboard. $100 a day for every day you ARE aboard.

Sooo, at the following annual non-use / use rate.

200 days not aboard = $7,000
165 days aboard = 16,500

Annual Total: $23,500

Might as well say: $2000 per month.

This annual ("averaged" over years of use) figure covers everything about general usage, docking, wear&tear, insurance etc. Cost depends on a lot of things. But, chances are... if you budget $2K per month you will often have capital left over at year end to throw at your boat the next year. Then suddenly something major could happen and you unexpectedly experience a budget that year that knocks your socks off. $2000 per month evens out over the long run!

Happy Boat-Funding Daze - Art :speed boat:

YRMV

Hawgwash · Jul 22, 2015

Art said:
I recommend budgeting $35 dollars per day for every day you are NOT aboard. $100 a day for every day you ARE aboard.
Happy Boat-Funding Daze - Art YRMV

What an interesting way to figure it. Still fits my thinking and a soft consensus.

Thanks Art.

ranger58sb · Jul 23, 2015

CPseudonym said:
Hiring out a simple oil change on that boat is an almost full day job for twin CAT's and the genny. By the time the mechanic buys the parts, gets them to the boat, pumps the oil out and gets it off the boat without spilling, to the dock and his truck to dispose.

Hawgwash said:
Lol, if it takes an expert all day to do a "simple oil change" well maybe if I lose some weight I can fit between those 3208s.

I'm not expert, a real expert could do a complete oil change faster than I can... and I have a built-in Oil X-Changer system which simplifies the innie and the outie part of the problem.

But I can probably do an oil change on the two mains, the two gears, and the genset in about 4 hours, given a supply of new oil and filters... usually purchased in the preceding days. (Note, that shopping time is not included, and we have an on-site oil recycle tank.)

I've not recently timed my process, partly because I don't do it all at once. I run the boat (heat the engine oil in the process) on one day, and return to the dock and drain the oil from all 5 sources... after the engine room cools a bit but before the oil cools down.

Then I do all the re-fill/filter change stuff the next day, when the engine room has completely cooled down.

Probably not a luxury a commercial guy could afford, unless he's always on-site in your yard anyway.

Still, you could probably figure 4 hours actual labor, plus the cost of supplies, as close enough for this kind of early-stage planning. Add to that cost of arrival/departure; if the guy starts charging when he starts loading oil onto his truck at his own facilities... has an X-hour drive each way... the drive time can maybe add a significant amount. Back to CP's "all day" estimate. OTOH, if your oil changer guy is on-site, that might not be such a big $$ hit.

-Chris

Hawgwash · Jul 23, 2015

ranger42c said:
I'm not expert...But I can probably do an oil change on the two mains, the two gears, and the genset in about 4 hours.../QUOTE]

Thanks Chris, you make it sound less daunting. I've always done my own changes but again on smaller gas boats where, with the hatches or sole open, I could at least stand up part of the time.

I'm not as young or as svelte as I once was and this time around, I thought I could spoil myself and have someone do it. CPs comment made me think it might be a luxury that maybe I could do without.

CP also said "a lot to think about" and this is one of them.

psneeld · Jul 23, 2015

The price for an oil change can be all over the map.

If you are available but not physically up to the task...usually some younger guy will do it under your supervision for considerably less than $100 per hour. Some independents will charge way less than $50 an hour and only charge minimal travel/setup/cleanup fees.

Yards will vary depending on where you go. The big dealers (CAT, Cummins, Etc) will be the priciest...but once and awhile they may be the ticket if something else you have going on can be pleasantly discussed and the field tech will pass on a wealth of knowledge,

Art · Jul 23, 2015

I've walked away from purchasing boats where I can not stand fully erect in the engine compartment/room. 48' Tollycraft was muchly one because of that factor... as well as other items about that boat.

Besides being fully self contained, comfortable pleasure boat... Our 34' tri cabin Tolly's big-dual hatch salon sole lets me stand between engines when desired. Engines' and other apparatus' layouts provide fairly easy access to most areas. A must for me... that and a flying bridge are two of my top requirements for a boat.

Robster_in_edmonds · Jul 23, 2015

These answers have all been really good, and using different rules of thumb the results are all pretty similar. A couple of areas not discussed in detail that I would like to address...

Moorage. There are yacht clubs in the PNW where members can have a slip with a boathouse and the slip is under$300 per month for a 45-50 foot boat. I pay my marina about $800-825 per month for an uncovered slip.

A good mechanic, electrician, or boat repair specialist can save you thousands of dollars. A friend spent nearly ten grand over five years trying to solve an engine overheating problem. My preferred mechanic spent a day cleaning out his cooling systems, hoses, etc., and fixed several problematic prior repairs for about one boat buck ($1,000). Problems solved.

Insurance. Figure about 1% of the boat's insured value per year. Work with an experienced yacht insurance broker, not your average personal lines generalist. I happen to be the latter, and I happen to represent one of the few personal lines companies that has a great boat/yacht insurance policy, and I know most of my fellow agents and staff don't know much at all about yacht needs and coverages.

Boating is not a cheap past time but it provides more pleasure for my wife and me than any other pursuits.

Rob

Hawgwash · Jul 23, 2015

psneeld said:
The big dealers (CAT, Cummins, Etc) will be the priciest...but once and awhile they may be the ticket if something else you have going on can be pleasantly discussed and the field tech will pass on a wealth of knowledge,

Part of my thought process here was just that. Someone much wiser than I, might spot a problem waiting to happen before I would, therefor saving money.

TDunn · Jul 23, 2015

Yup, unplanned repairs can set you back a pretty penny. Sunday I discovered that my exhaust riser was shot. So I spent an hour removing it and the hose to the muffler. Then I made a trip to the hardware store for new black iron pipe and fittings. Total cost was $15. The drive to the hardware store was a 1/2 mile round trip so ten cents for gas. I used the marina's big vise and pipe wrenches to assemble the new riser and move my injection elbow from the old pipe to the new. The last 2" of the exhaust hose where it connected to the exhaust riser was in poor shape, so I cut it off back to good hose. Reinstallation took about half an hour. All together the repair took me about three hours and cost a bit under $15.

I maintain two boats. Annual engine maintenance costs about $75 per boat (oil and filter changes, transmission fluid change, winterizing and Spring commissioning). This year I also spent about $400 on the 36' sailboat for upgrades (new midships cleats, new high speed heading sensor to allow radar overlay on the chart plotter, and awl-grip painting the deck and cabin house). The 33' powerboat got full topsides paint ($250) and the mahogany cabin house and transom got two coats of varnish ($75). Bottom paint for the two boats ran about $300. I also spent about $30 on zincs. I do all the work myself. This year maintenance took me about 250 hours, so at yard rates that would have cost me $12,500.

Hawgwash · Jul 23, 2015

Robster_in_edmonds said:
These answers have all been really good, and using different rules of thumb the results are all pretty similar...
Boating is not a cheap past time but it provides more pleasure for my wife and me than any other pursuits.

Totally agree Rob and I appreciate that folks took my questions seriously and THEN took the time to respond.

Insurance, moorage and fuel are easy budget items once you have done your homework and homework is what I am doing here. Again I quote CP "lots to think about."

Art · Jul 23, 2015

TDunn said:
Yup, unplanned repairs can set you back a pretty penny. Sunday I discovered that my exhaust riser was shot. So I spent an hour removing it and the hose to the muffler. Then I made a trip to the hardware store for new black iron pipe and fittings. Total cost was $15. The drive to the hardware store was a 1/2 mile round trip so ten cents for gas. I used the marina's big vise and pipe wrenches to assemble the new riser and move my injection elbow from the old pipe to the new. The last 2" of the exhaust hose where it connected to the exhaust riser was in poor shape, so I cut it off back to good hose. Reinstallation took about half an hour. All together the repair took me about three hours and cost a bit under $15.

I maintain two boats. Annual engine maintenance costs about $75 per boat (oil and filter changes, transmission fluid change, winterizing and Spring commissioning). This year I also spent about $400 on the 36' sailboat for upgrades (new midships cleats, new high speed heading sensor to allow radar overlay on the chart plotter, and awl-grip painting the deck and cabin house). The 33' powerboat got full topsides paint ($250) and the mahogany cabin house and transom got two coats of varnish ($75). Bottom paint for the two boats ran about $300. I also spent about $30 on zincs. I do all the work myself. This year maintenance took me about 250 hours, so at yard rates that would have cost me $12,500.

Didn't I also read on another thread that your nice old woody gets around 20 MPG? You seem to be the star economy guy on TF... Less than couple boat bucks a year and you're set ta go!! :socool:

Budgeting

Guru

Guru

Guru

Guru

Senior Member

Moderator Emeritus

Guru

Guru

Guru

Guru

Guru

Guru

Guru

Guru

Guru

Guru

Guru

Guru

Senior Member

Guru

Guru

Guru

Guru

Guru

Guru

Attachments

Senior Member

Guru

Guru

Guru

Guru

Similar threads