Thread: Home vs Boat
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Old 04-17-2019, 09:33 PM   #12
dhays
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City: Gig Harbor
Vessel Name: Kinship
Vessel Model: North Pacific 43
Join Date: May 2015
Posts: 9,046
Quote:
Originally Posted by jovial_cynic View Post
Supposing you had a mortgage... let's say a $300k to $500k mortgage. If you could sell it and pick up whatever equity you had in it, would you ever consider buying a $300k to $500k boat and having a similar loan amount?

My wife and I are going back and forth between a big expensive boat that would replace our mortgage (payments would be a little lower because of equity in the home, but it would still be something upwards of a house payment), or a smaller and cheaper boat with very little debt. Her perspective is that if we're going to do it, we should go all-in and have a very nice boat. Me, on the other hand, am very concerned about the diminishing value of a boat vs. the increasing value of a house, and love the idea of being nearly debt free.


How have you wrestled with this decision?


My wife and I decided to split the difference. We kept the home and bought a 6 year old boat that, for us, was relatively expensive. We took a mortgage on the boat. Currently, we owe as much on the boat as we do on the house.

For my own personal financial planning, I consider everything that is going into the boat is simply an expense, not an investment. I plan for the residual value of the boat when we are done with it to be $0. Of course it won’t, but I’m not going to plan my financial future on any value from the boat. The house is different. I count on it being an appreciated asset.

So, we could have sold the house, put the cash we put into the boat, and still been left with same total debt. We could have had an $800k boat. That would have been lovely. However, I’m not willing, or able, to put that much into a depreciating asset.

The middle ground gave us the financial security I need. Being able to write off the interest on the boat loan as a second home helped.
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Regards,

Dave
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