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Equipment Depreciation

2K views 13 replies 8 participants last post by  cardiacpaul 
#1 ·
Anyone have a formula for equiptment or upgrade depreciation. I am looking at a 1978 Bristol 29.9, the curent owner has a shopping list of upgrades that he did 5 to 7 years ago that include.

winter cover 2003-4
new port lights and fule lines
new gps chartplotter ( garmin 215) new Simrad wp30 auto pilot 2002
AWL Grip entrie vessel 1999
Rebedded entire deck 2001
New V Birth Cusshions 2003
mainlsail Full batten 2000
150 genoa 2003
Bimini Cover and frame 2001
Crusing Cool Dock Side AC 2002 (which I would hardly ever use being that I will be on a can in Monroe Harbor.

The list goes on to the tune of $19,259.00 that was done 5 to 7 years ago.

The overall condition of the boat is very good. The Original 18HP Yanmar has 656 hours on the engine meter stated to be true.

My question is what is this work/equipment worth now, how much does it add or subtract from the base value of the boat. I want to make an offer on this vessel and am trying to figure how much to offer. I am working through the sellers broker. Thanks in advance for any ideas or suggestions.
 
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#3 ·
Deprecation is done, unless you're running a business than you might be able to squeak a few more years out of it for tax purposes, but otherwise, the upgrades really do not add any value. I'd offer 20-25% less than asking, which I'm guessing is around $28-30K and then find a middle ground that you can both live with.
 
#5 ·
Well... I would not say there is NO value there. the Awlgrip if in good condition is certainly a plus and the Garmin has maybe 20% of original value since the prices have dropped so much. Ditto the Simrad. Everything else on your list either seems to be standard maintenance (port lights, fuel lines, deck bedding...none of these are upgrades...they are FIXES) or upgrades that have limited life and value at this age...sail, cushions, bimini. None of these are anything special and one would EXPECT them on a used boat.
Less than 20 original engine hours a year is quite extraordinary...but lack of use can be as bad as too much use.An engine survey after your offer will help clarify that.
Take a look at the asking prices on line for similar vessels and then ask the broker for a PRINTOUT of actual selling prices for this model in the last 2 years. This should give you a good range for your offer based on the overall condition of the boat. It is nice that the PO invested in the boat's maintenance...at least until several years ago (why nothing since then???)...but it aint something you have to reimburse him for.
 
#6 ·
It depends if those things are in good condition or not...more than the age of them. A paint job done last year, but without proper prep work is worth far less than a paint job that was done four years ago with really good prep work. But Cam's point about a lot of that list being "routine maintenance and upkeep" is pretty spot on.

Some of them will have some value left, others will be past any added value to the boat, since they will soon need to be replaced or redone.
 
#7 ·
While its nice that the PO keeps decent records, it doesn't add any "value" to me. The things mentioned would have either been maint. items or given the age be done again anyway.

The low hours on the engine isn't a big concern but low hours are almost as bad as really high hours. Have it checked out.
 
#8 ·
Actually, CP, IMHO, low hours are probably worse for an engine than high hours with proper maintenance, since most people go by engine hours for the engine maintenance schedule, and the high hour engine is going to be checked more frequently with proper maintenance.
 
#9 ·
dog, agreed... a fellow I know was bemoaning that he had to change his fuel filters.... he said they only had 20 hours on them... installed in 2004
 
#10 ·
cardiacpaul said:
dog, agreed... a fellow I know was bemoaning that he had to change his fuel filters.... he said they only had 20 hours on them... installed in 2004
I'm guessing... that he doesn't take the boat out much... I have that many hours on the tiny outboard on my boat..... but I sail as much as I can... and try to spend as much time down at my boat as possible. :D
 
#11 ·
I have put $10K into a boat I spent $23K on eight years ago so I would feel comfortable about the engine and fuel systems and about the structural aspects of the boat. My time and swearing are equally expensive....

Today, the boat is worth $20K, but I know personally it's better than factory. But I never got around to the cushions, which are horrible '70s brown tartans...eugh... Nonetheless, it sails amazingly well and will give many more years of service. This is worth a lot to me, but is largely intangible and cannot be expected to be much of a factor in any potential buyer's situation. It's like having the finest Opti in the world: no matter whether you varnished it in beetle secretions from Java, it's still an eight foot pram and you'll never get more than a grand for it.

So you can nod and ooh and aah to the seller about all that investment, but aside from say, the Awlgrip, it means next to nothing to what you should be paying for an old boat.
 
#12 ·
Zaldog - Anything that can be taken off the boat and sold separately has the value (to the owner) obtainable at a boat jumble sale or e-Bay, and a bit less to account for the trouble of doing it .
So you could ask the owner for his new price, after he takes his old junk off the boat. Then you'll know how much he thinks the stuff is worth. If the answer is along the lines of "its all included in the price", then the junk is worthless (and he has already taken everything of value to him). Plus, you have to assume that you will need to replace those items that you feel are essential, fairly soon, so keep some money back for them.
I think a boat's intrinsic value is in the hull, the deck, the engine and the sails and rigging - if properly maintained, so make sure the surveyor has good words to say about those.
When you have your new boat, you will want to lavish a lot of money on her, and you get new toys to play with - much more fun than his old junk. :D
 
#13 ·
Thanks to all of you for the excellent insight, my eyes are wide open now and I have a lot of good questions to ask the broker...I will keep you all posted.

On the low engine hours, how can this be bad for the engine? potentional corrosion of the rings and heads? Just curious as I have never owned a boat with a diesel. And I know I would put at least 2 hours a week on this engine during the season here in Chicago.
 
#14 ·
"problems" concerning low hours...(sometimes these aren't big problems, take all of this with a grain of salt)

When an engine is not operated regularly, or has "long" periods of non-operation, condensation can work its rusty magic in cylinders that are stopped with valve open. On a 4 cyl. engine gas or diesel, this could happen in a maximum of 2 cylinders at a time, or a minimum of no cylinders. I haven't worked out the probabilities but given the action of the valves in relationship with engine rotation at least one valve (intake or exahust) will be open at any given time.

as stated above,
(gas)
belts/hoses/filters/ plugs, points, coils

(diesel)
glowplugs/injectors filters/belts hoses
are subject to wear/replacement.

Look, this is all relative. You may go with a 600 hour engine in a 20 yr old boat and have no worries for another 10 years. Or you may go with a 3000 hour engine in a 20 yr old boat and still have no worries.
Or, the 600 hour engine may give up the ghost in 10 hours, same with the 3000 hour engine.

Get an oil sample kit and get it tested this will help you a bunch.
 
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