Concerned about purchasing older boat

[C lectric]

Enough maybe but one more regardless.
If you want to boat do it. Find a boat that you like for an acceptable price but as for getting your money back forget it.
If you are that worried about an "exit strategy" then you will spoil it.
Same for your house. You enjoy it for whatever reason of yours.
We have had our boat for 33 years. Will we get our purchase price or close, NO.
Our expenses back, No, not even close.
Initially the boat purchase was 65k , then add approx. 12-15k expenses per year for operating , mtce. and other items we would have been better served financially elsewhere.
BUT we like our boat, have enjoyed our time with it and Don,t regret it.

We started smaller though and that was where we learned we like boating.
I do see ,maybe too many, who never boated and jumped into a large boat and scared themselves silly. It is NOT a car. We learned some thing about mtce. and handling on smaller vessels and as we moved up we added to our knowledge and skills each move.

If you are a jumper then get some help and training for the handling and operating to jump start the learning.

Don,t ignore the financial aspect but Don,t freeze on it either.

And look at LOTS of boats. Not just website cruising but real eyeball and footwork looking.

 

[melissar]

I wasn't asking "should we buy the boat?" Or "is a boat a good financial investment?" Or "will we lose money?" I was specifically asking if older boats -- because they are largely unfinanceable -- are a wise choice or would we be better looking at boats that are a little newer, all else being equal? We understand...personal choice...lots of work...depreciation...looking at anything and everything...following dreams...all of that. There are many ways to narrow our search options from the vast numbers of boats out there, and that is just one of many questions we are looking at as we get closer to deciding what we are looking for. Thanks!

 

[Comodave]

You can certainly get a loan on boats less than 20 years old. You can probably get a loan on boats up to 30 years old depending on your credit. We are on our 23rd boat. Do I make money on them, no. Do I love boating, yes and that is good enough for us. I would probably stick to boats in the 80s or newer since the market for older boats than that is dwindling. Good luck in your search. Don’t let naysayers discourage you.

 

[melissar]

Thanks, Comodave. That's more in line with my original question, as many of the boats we are drawn to are older than 30 years. (My original post is a direct result, by the way, of a conversation with the boat loan officer you recommended I talk with.) Not looking to make money or break even, but also not interested in being "stuck" indefinitely with an unsellable boat should circumstances unexplicably change. I've seen too many of those boats over the years not to be realistic about it. Not discouraged at all, just a little frustrated when people don't read the original question and respond with extraneous and sometimes somewhat condescending responses.

 

[O C Diver]

If you buy a boat in decent shape and maintain or improve it, you will be able to sell or give it away. At the very least, an organization like Boat Angel will.take it as a donation and give you a tax write off.

Many people use a home equity loan or other type of loan to finance things the banks won't give them a loan on. Don't worry about how someone else will finance your boat, it's not your problem. If they want your boat bad enough, they will figure out a way. Buying a boat that is 10 years newer won't change the equation if you keep it 10 years.

If I were buying a 30+ year old boat, age would matter less to me, and condition would be more important. Friend of mine was looking at a mid 80s Jefferson in very good condition. It went under contract within 3 weeks of being listed. Over 30 years old, it's condition, not age.

Ted

 

[melissar]

Thanks, Ted.

 

[Pineapple Girl]

i completely agree with Ted. And if you are looking at classics (you mentioned Grand Banks), all the more reason not to worry.

You mentioned a couple times walking by all the decrepit sinking boats... honestly I have seen so many people not even try to sell their boat when they are no longer using it. they don't want to give up on the dream or the illusion that their life is going to change and they will find time for it again. Hopefully they get their life figured out before the boat really does sink. My husband helped a friend clean up and sell a boat that the friend had neglected for about five years while his kids were really little. He kept thinking "once the kids get a little older...". He finally had to accept that there was just not going to be time for a lot more years and he was better off to sell that boat and maybe someday get another. A lot of people never come to this realization.

 

[C lectric]

I did miss the mark didn't, I.

Older boats are still saleable if they were good quality to start and are maintained.

Sometimes the market can conspire to make things tough but even then the above boats do better than average even though the owner may not see the price wanted.

I agree Grand Banks, well maintained, still sell well and yield a better resale than many othermakes.

There are other brands that actually do well when their shortcomings are known and previous owners have dealt with the problems or most of them. CHB 34 comes to mind, older Mainship 34, and yes Grand Banks.

You will need to question about the weak points of any mfgr. If dealt with even those boats can pass the mark. Just get and. Keep the receipts and records.

That should give you a good shot at not being stuck.

 

[mahal]

One more thing to keep in mind is that buyers of trawler type boats are older therefore more likely to be cash buyers. I just sold my previous GB and the buyer was older and had cash.

 

[psneeld]

The older the boat, generally the narrower the field of buyers.

They are not impossible to sell, but if in doubt....do a test.

Go ask a bunch of friends whether boaters or not with not a lot of boating experience... ask them about older boats.

It doesnt seem much different with cars, homes, RVs, etc, etc.... sure they sell.... but how long on the market and who is even looking...

 

[BruceK]

If older boats are harder to finance that must reduce the pool of potential buyers by those who need finance but can`t get it,at acceptable terms or at all.
A reduced pool of buyers should mean reduced demand, reduced competition, and reduced pricing. If so, there is a purchase discount already built into pricing and or ultimate sale price. Price needs to be lower to attract buyers paying cash,and sellers who have found a buyer are going to be less inclined to hardball with the buyer they found.
That`s my theory anyway. A discount is, or should be, built into the price you pay. Especially as a buyer knows the same issue will eventually be their problem at resale.
If you have a preference for older boats,and your finances will support your preference, move on with finding your beloved boat.

 

[cool beans]

I think it's called "sunrise mortgage" and they write unsecured loans at higher percentages.

Exit strategy? Keep my boat in good to great shape and hope someone even wants to buy it

 

[Simi 60]

Exit strategy for ours is in 5 years as full time liveaboards she'll owe us nothing in comparison to renting a comparable waterfront apartment.
If we can live aboard for 10 years...........

Add: actually, 2.5 years is break even compared to a compatible waterfront appatment.
6 mths to go.

 

[nodestination]

I purchase my boat for more that was actually worth. So, why did I bought it?. First - solid hull fiberglass, molded cabin top - not plywood. But the most - it is very comfortable and with legendary Lehman (2), I am confident that I can take my boat anywhere - my have to tow a dinghy full of diesel for second tank. Like with all older boats (1973), there will be some work to be done. Like me - most of them was cosmetic. I am scary of buying newest boats as they have cored hull and very fragile. If I will buy another boat - it will be pre-1978 to 1984.

 

[Vashon_Trawler]

I purchase my boat for more that was actually worth. So, why did I bought it?. First - solid hull fiberglass, molded cabin top - not plywood. But the most - it is very comfortable and with legendary Lehman (2), I am confident that I can take my boat anywhere - my have to tow a dinghy full of diesel for second tank. Like with all older boats (1973), there will be some work to be done. Like me - most of them was cosmetic. I am scary of buying newest boats as they have cored hull and very fragile. If I will buy another boat - it will be pre-1978 to 1984.

I am with you! I likely purchased my boat for more than it was worth, but I had very specific criteria. I very much wanted a small, full displacement trawler that was built like a brick (e.g., solid fiberglass hull). I was not pleased with the newer builds that were in my size range. Unfortunately, my boat has a very, very, very small group of potential buyers. Who wants to travel at 6 knots now a days? I've put thousands into my boat and have no regrets.

 

[Shrew]

Apply what we affectionately refer to as "Boaters Math". If you look at it like an investment, or anything other than losing money, then boating is not for you. If that is the case, buy a vacation property.

We don't go into it considering what we're going to lose. You don't consider what you're losing with a vacation either. Look at it like a long-term vacation. We don't really know where we stand until after we sell the boat.

We start with a boat that we think we can reasonably afford to purchase and maintain in regards to a monthly and yearly cash flow perspective. We then calculate the cost per day ownership.

((Purchase Price + Maintenance + Operating Cost) - Sell Price)/days used = cost per day (CpD).

Basically, we look at it like renting the boat from ourselves. The same as renting a cottage or a hotel during vacation.

What we get are every weekend for 6 months out of the year and our vacations. We're paying for the lifestyle. The key to driving the 'cost per day' down is actually using the boat. Either you are ok with the 'cost per day' or you're not.

The key to using the boat is learning to say "NO". No, I'm not going to your 'event' (barbecue, wedding, graduation, anniversary party, kids recital). We've passed on family vacations and get-togethers. If they don't understand, they're not good friends to begin with. I don't even visit my parents when they come into town if it's on a weekend. (They're retired they can work around my schedule and see us on a weekday). Besides my parents were boaters and not only understand but refuse to have us give up a boating weekend.

As for resale, there are plenty of cash buyers as well as buyers that come up with alternative financings, like Home Equity Loans and those that simply sell everything to buy into the lifestyle. Think of it this way. IF you're considering buying an older boat, there are plenty of others doing the same.

The challenge is, that almost everyone's first boat is rarely what they really want. If you're going to buy a boat, then switch in 1-2 years, the CPD tends to go up quite a bit.

 

[Airstream345]

((Purchase Price + Maintenance + Operating Cost) - Sell Price)/days used = cost per day (CpD).

Basically, we look at it like renting the boat from ourselves. The same as renting a cottage or a hotel during vacation.

Love this. Reminds me of some advice I got from a friend when we began very casually looking at buying a second place, a cabin or cottage away from the city to escape to on weekends and vacations. Having gone through a similar consideration process earlier he came to the conclusion that he and his wife needed to spend between $2500 and $3500 a month, every month in vacation rentals before he could justify a mortgage, insurance, utilities and upkeep on second place. It turns out that's REALLY hard to do on a consistent basis and even as an appreciating asset you're still cash flowing it.

I appreciated the great perspective and it stopped our second home plan cold.

For us a boat became a better option for a second home. Cheaper than a cottage (20%) and "waterfront property" no less. It also had the advantage of being more accessible than a cabin in the mountains or on an island that requires schedules and planning to get to and has the incredible benefit of changing locations and views. Our boat is moored 7 miles from the house. I can easily zip down after work and we sometimes just hang out on it without leaving the dock.

For us - this all adds up to a much better "investment".

As far as the original question, a few observations:

1. Most old boats are on the bottom end of their depreciation curve. Removing inflation, some boats (mine included) sell today for close to or even more than they did new. I only bring this up because $100K today in a mid 80's boat can deliver a vessel in good condition that would cost $400K - $500K in today's dollars.
2. Therefore, condition is everything. Everything.
3. Some more popular brands sell and resell faster and for more. GB 36, 42 and Kady-Krogen 42 come to mind. There are others.
4. Upgrades and refits costs more than they are worth at resale. Try and buy those from the previous owner(s). Electronics, engines, tanks, stabilizers, water makers, etc. Many of us invest in how we want to use a boat not based on return on investment. You can take advantage of that in a used purchase.

In the end, only you can decide what's the right boat for you and how much to spend on purchase, upgrades, refits and maintenance.

 

[nodestination]

I live on my boat, so safety and comfort are the main requirements.

 

[melissar]

Thank you everyone for your insights. The original question was essentially: is it advisable to purchase an older boat vs one that is newer and possibly easier to resell SHOULD WE NEED OR WANT TO SELL? I have received some valuable advice and for that, I thank the posters who bothered to read my original post. I really wasn't asking "should we buy the boat?" Or "why do we want a boat in the first place?" Or "is a boat a good financial investment?" Or "how will we use the boat?" Or "will we regret buying a boat?" Simply wanted some succinct thoughts on the advisability of purchasing an older boat vs a newer one. So with that said, feel free to keep posting. All of these are good thoughts, just not always to the point of what I was looking for. Signing off.

 

[Mako]

Hi melissar, I reread your original post again, so let me offer my input to your original questions:

Older versus Newer: That would mostly be determined by (1) you budget; and (2) your preferences based on your experience with owning both vessels. If you are relatively new to larger powerboats then stick with a less expensive one. Few people ever buy their first boat and keep it for a lifetime, so statistically you WILL SELL you boat eventually - perhaps within a few years.

Later on once you know what you want, instead of what you think you want, then you can sink serious money into your vessel.

Further to my comment about "your preference," in my example I previously boat a 40 year old steel boat. It was mortgaged and insured. Years later I had built a small, custom fiberglass boat - exactly the way I wanted it, and brand new. So based on my knowledgeable preferences today, I really hate used boats and will be building a custom large one now. Building a large custom boat is the absolute dumbest thing to do or way to invest money, but since it's a knowledgeable decision it is the right one.

Advice to you:

1. Stick to fiberglass. Absolutely NOT wood. Perhaps steel.
2. Focus on the best condition possible and with recent upgrades.
3. I recall that 70's fiberglass boats were built with thicker and better quality hand laid hulls than 80's, where the manufacturers started to get cheap.
4. Stick with a known name: Defever, Marine Trader, GB, etc.
5. Since an older boat will likely NOT depreciate further due to age, it will only depreciate in value do to condition.
6. Keep discipline about not investing too much money into it - no huge investments in electronics or stabilizers. At least not until you know that this is the right boat for you and will be keeping it.

Hope this helps and is more focused in response.

BTW, I think the opposite to your comment about "easier to sell." It is easier to sell a cheaper older boat than a more expensive newer one - assuming both are in decent condition. Size of customer base!

 

[FlyWright]

Thank you everyone for your insights. The original question was essentially: is it advisable to purchase an older boat vs one that is newer and possibly easier to resell SHOULD WE NEED OR WANT TO SELL? I have received some valuable advice and for that, I thank the posters who bothered to read my original post. I really wasn't asking "should we buy the boat?" Or "why do we want a boat in the first place?" Or "is a boat a good financial investment?" Or "how will we use the boat?" Or "will we regret buying a boat?" Simply wanted some succinct thoughts on the advisability of purchasing an older boat vs a newer one. So with that said, feel free to keep posting. All of these are good thoughts, just not always to the point of what I was looking for. Signing off.

That's the way it goes with online forums...it's like sitting down to a huge roundtable discussion. You started the conversation then others had some side conversations. I often learn much from the side shows.

 

[Robvald]

older boats have shed most of their depreciation.

Like old houses the systems may be failing or it may be in great shape. A boat that needs tons of work will nickle and dime you.

I had no problem financing my 1978.

You can lose money but doesn't mean you will. I think most people are talking about factoring in storage fees, upkeep, repairs, etc but you can't really factor that into the purchase price of the boat.

Boat's can surely be an investment but large boats like trawlers? Not in my opinion. I've flipped quite a few with sweat labor(fiberglass work and paint). Larger boats are harder to sell because the market isn't as large.

I've got my money back or made money on every boat i've owned(11 older boats).

Impossible.IMHO
You may have had a even return on your cash invested. But hundreds of hours of free labor to make that happen . I just don’t see flipping boats as a money making venture. Unless you consider your Time as free

 

[Robvald]

In most cases boats are a fantastic investment. What the business-oriented people need to be reminded of is that your "return on investment" does not have to be in dollars.

Now that is the best response I’ve read so far.

 

[FF]

"All of these are good thoughts, just not always to the point of what I was looking for.



This is great as many times folks do not know the better question to ask!

 

[tbtapper]

I bought my 1987 CT Sundeck sight unseen for a price that if it turned out to be a disaster I would not be bankrupt. Fortunately, the pictures and assurances of the broker were reasonably true.

Granted, no a GB but but a well known builder with product all over the oceans. My point is lots of work but nothing major, solid construction and brand name equipment mean IMO my boat will always be a great value in the under $50k field. 31 years old, I cannot imagine it not lasting virtually “forever” with care and good maintenance.

I believe there will always be someone out there like me looking for the “trawler” lifestyle at a lower price point. I would have tripped over myself to buy my boat in the condition it is in now and as such I think there will virtually always be a buyer out there for a trawler reasonably priced and and in fully serviceable condition.

 

[Donna]

Thanks, Comodave. That's more in line with my original question, as many of the boats we are drawn to are older than 30 years. (My original post is a direct result, by the way, of a conversation with the boat loan officer you recommended I talk with.) Not looking to make money or break even, but also not interested in being "stuck" indefinitely with an unsellable boat should circumstances unexplicably change. I've seen too many of those boats over the years not to be realistic about it. Not discouraged at all, just a little frustrated when people don't read the original question and respond with extraneous and sometimes somewhat condescending responses.

Ok, let’s see if I can help. My boat is in the process of getting a historic designation. Southerly is 33 years old. Like you, I am also drawn to older boats. It’s the character, the woodwork, the engine and everything that goes along with it. Just last week, I was on a 10 year old boat. It wasn’t a trawler but really it was beautiful. Not for me, but beautiful. My old gal seems much larger and roomier then the bigger newer beauty.

I can’t answer your question on financing because I don’t have any experience with financing a boat. Follow your heart, get a mechanical survey.

Good luck with your search.

 

[scfoster]

My first post on the forum and I happen across a subject I know well (in the banking biz).

Everything depends on two things, your collateral and your credit score/history. Period. The rest is merely the cost of borrowing the $$$. Remember, banks sell money. No sales, no profits, no open doors. Huge simplification but the premise is sound.

If you have an older home with lots of sweat equity, and assuming your credit history is good, you should have no problem at all financing an older boat. The three variables are going to be down payment, interest rate and what the bank wants as collateral.

I could be shot for saying this but credit unions and local banks may be your cheapest alternative, if you have a lot of collateral. Stop in a few (helps if you already bank there) and speak to a loan officer. Notice I said stop in, not call.

Good luck and hope it works out for you.

 

[FF]

"Remember, banks sell money."


Banks rent credit , usually that they have rented.

 

[scfoster]

"Remember, banks sell money."


Banks rent credit , usually that they have rented.

Actually no they don't. A dealership sells you a car they did not manufacture and more than likely don't own (floor plan). But, they are still selling you a car, as most consumers understand it.

Same with money. A consumer may need money they don't have (or don't want to spend what they do have for various reasons). So they go to a money dealership, which can be a bank (or a cash for titles store).

The product is money, unless the seller is willing to take goats and chickens in trade.

 

[RT Firefly]

Greetings,
Mr./Ms. sc. Welcome aboard.