Owning a Boat is EXPENSIVE!

[Maine Sail]

Originally Posted by CaptainFredGreenfield

DON'T FORGET DEPRECIATION

Assign 30% depreciation for the first year on a new boat, 20% for the second year (Or the first year on a used boat ) and 10% (of the original price) for each year thereafter. At some point the depreciation will taper off, but the maintenance will escalate to make up for it.

I hate it when people shoot from the hip or use a bad data set..

Let's see I have bought and sold six boats since 1997:

SeaWay 19 - Paid 5k sold for 6.8k

Catalina 30 - Paid 16.5k sold for 22k

Cataina 36 - Paid 47k traded in for 56k

Mainship Pilot 30 - Paid 102k traded in for 105k

Catalina 310 (brand new) Paid 111.3k sold two years later for 107.5k

CS-36 Paid 47k have not sold yet but was offered 60k last summer if I would...

Made/Lost: 1.8k + 5.5k + 9k + 3k - 3.8k = net increase in value over 11 years of boat ownership = +15.5k

Even on a two year old boat I only lost 3.4%!! If I were to use Captain Fred's numbers my 2005 Catalina 310 would look like this:

Original purchase price March 2005 = 111.3k
- 30% Year 1 = 77.9k
-20% Year 2 = 62.3k
-10% Year 3 = 56k

(boat actually sold in winter of 2007 for 107.5k)

If you are a hack, and don't maintain or care for your boat you WILL lose money! A well maintained boat will sell at the absolute tip to of the market and will sell quickly.

Our Catalina 30 sold to the second looker in just four weeks, our C-36 sold to the first looker within three days of trading it in, my Mainship sold to the first looker within in one week of trade in, and our Catalina 310 sold to the second looker in just about 8 weeks.

The bottom line is that boats are still expensive and time consuming but the OP is off on the math. My scenario is not standard, as my boats are always in the top 1-2% of condition, but even if you go by soldboats.com the numbers don't work in the OP's post..

[Maine Sail]

Originally Posted by Gramp34

Capt'n Fred -- I think your 20% estimate for depreciation is pretty severe. Powerboats and racing sailboats, maybe, family cruisers, definitely not. Here's some values for Catalina 36s I pulled out of the BUC book a year and a half ago:

Year........ Ave Retail... Loss per year... % per year
2006........ $130,750
2005........ $125,250........ $5,500........ 4%
2004........ $119,750 ........$5,500........ 4%
2003........ $114,000........ $5,750........ 5%
2002........ $108,000........ $6,000........ 5%
2001........ $101,650........ $6,350........ 6%
2000........ $95,550.......... $6,100........ 6%
1999........ $89,900.......... $5,650........ 6%
1998........ $84,300.......... $5,600........ 6%
1997........ $78,900.......... $5,400........ 6%
1996........ $73,650.......... $5,250........ 7%
1995........ $68,650.......... $5,000........ 7%
1994........ $63,900.......... $4,750........ 7%
1993........ $59,400.......... $4,500........ 7%
1992........ $55,600.......... $3,800........ 6%
1991........ $51,500.......... $4,100........ 7%
1990........ $48,050.......... $3,450........ 7%
1989........ $44,450.......... $3,600........ 7%
1988........ $41,150.......... $3,300........ 7%
1987........ $38,200.......... $2,950........ 7%
1986........ $35,450.......... $2,750........ 7%
1985........ $32,750.......... $2,700........ 8%
1984........ $33,050.......... ($300)........ -1%
1983........ $31,100.......... $1,950........ 6%
1982........ $25,800.......... $5,300........ 17%

It's easy to get a BUC or NADA book and trace back different boat models. It'd be even more accurate to calculate based on the initial purchase price rather than today's purchase price.

Cheers,

Tim

BUC & NADA are horribly inaccurate when it comes to boats. The industry now uses, and has been for a while, Soldboats.com. Unfortunately these numbers on soldboats, or anywhere, are dependent on broker input. Padding sales can and does happen but soldboats.com is the most accurate we have and you need to be a broker or member to use it....

Currently on Yacht World there are three 1987 C-36's listed for 63.9k, 50k and 57k. Boats generally sell for about 10-12% below asking (can be more if condition is real bad) but 10% is generally the average (will probably climb some in the bad economy). This average does NOT support a BUC value of 38.2k..

If you take an averge of the 3, you come up with 56.9k asking, now deduct 10% for averge sale price and you have 51.2k on average which is a far cry from 38.2k

Of course none of this changes the fact that boating is expensive and will cost a LOT more than the original purchase price..

[CaptainFredGreenfield]

I've gone through and corrected my process for accounting, by laying it out in two scenarios in theory, and then a very realistic real world scenario in the 3rd.

This is as detailed of a breakdown as I can make it, and I haven't double counted depreciation. The costs are only marginally less than I had originally posted.

------

DON'T FORGET DEPRECIATION

Assign 20-30% depreciation for the first year on a new boat, 10-20% for the second year (Or the first year on a used boat ) and 5-10% (of the original price) for each year thereafter. At some point the depreciation will taper off, but the maintenance will escalate to make up for it. For the sake of argument, I will remain conservative and use the maximum depreciation scale. These numbers are adjustable by the boat - some will be 25% less depending on the covetability of that boat.

FIGURING THE COSTS

I am going to show you a BASIC way to determine the costs of owning a boat, taking the typical factors into account. Obviously, the price to own an maintain a 60 foot racing sloop is going to be substantially more than a 24 foot trailered family sailboat. Similarly, owning a Catalina 30 is going to be different than owning a Newport 30. There is no formula that will work for every boat, in every location, you'll have to use this as a guideline only.

Lets clarify what's going on here. If you don't spend the money on mainenance, you will see it in depreciation.

First, some facts.

$20,000 PURCHASE PRICE - a 30 foot, used sailboat from 1984, in functionally good condition with only minor wear and tear expected of a boat of her age.

5 YEARS is the term that we will own the boat. After that, we will figure out what we are going to do with it. Hopefully we get between 30-60 sailing days on her a year, getting some good use out of her.

EXPENSES below are simple, mandatory expenses - slip fee and insurance. Obviously, these two factors depend on where you are. In Southern California, these numbers are accurate for 2009, if not on the cheaper side. They do not factor in live aboard fees, dockside electricity, extra storage lockers, and most importantly, fuel.

MAINTENANCE costs are things like bottom scrapings, bottom paint, haul outs, varnish/stain, replacing sail covers, replacing or having a sail repaired if damaged, replacing the occasional rigging item, basic engine maintenance and expenses, etc. Despite what some have said, this is a VERY realistic figure. Some years will be more, some will be less.

Now, based on my experience with owning sailboats, lets figure out how much it will cost to own her based on 3 scenarios.
SCENARIO 1 - Used and Abused

We do no maintenance, and sell her at the end of the 5 years.

EXPENSES & DEPRECIATION__________________________

FIRST YEAR

- $0 maintenance (10%)

- $4,000 depreciation (20%)

- $3,200 expenses = $300 per mo.slip rent + $200/yr liability insurance

NEXT 4 YEARS

- $0 maintenance (10%)

- $8,000 = $2,000 x 4 (10%/year) next 4 yrs depreciation

- $12,800 expenses next 4 yrs slip fees and insurance

__________________________________

$16,000 TOTAL SLIP FEE AND INSURANCE EXPENSE

+ $20,000 ORIGINAL PURCHASE PRICE

__________________________________

$36,000 TOTAL to own this boat for 5 yrs.

That’s approx. $7200/year if you don’t sell it.

If you do resell it after 5 years for $8,000 resale value (using the depreciation schedule above) - lets face it, after 5 years of hard use, she's going to be hard to sell because she's in really poor shape (private sale/no commission)

then $28,000 non-recovered expenses/depreciation divided by 5 yrs = $5600/year

If we got the maximum of 60 days onboard our boat each year, this factors out to $93.33/day of use to own this boat. That's $15.34/day whether you use it or not.
SCENARIO 2 - The Properly Maintained Boat

We do regular maintenance, she's in as good of shape as the day we bought her, and sell her at the end of the 5 years for the exact same price as when we bought her.

EXPENSES & DEPRECIATION__________________________

FIRST YEAR

- $2,000 maintenance (10%)

- $3,200 expenses = $300 per mo.slip rent + $200/yr liability insurance

- $0 depreciation

NEXT 4 YEARS

- $8,000 = $2,000 x 4 (10%/year) next 4 yrs maintenance

- $12,800 expenses next 4 yrs slip fees and insurance

- $0 depreciation (10%)

__________________________________

$16,000 TOTAL SLIP FEE AND INSURANCE EXPENSE

+ $10,000 MAINTENANCE

+ $20,000 ORIGINAL PURCHASE PRICE

__________________________________

$46,000 TOTAL to own this boat for 5 yrs.

That’s approx. $9200/year if you don’t sell it.

If you do resell it after 5 years for $20,000 resale value (the exact amount you paid for it) (private sale/no commission)

then $26,000 non-recovered expenses/depreciation divided by 5 yrs = $5200/year

If we got the maximum of 60 days onboard our boat each year, this factors out to $86.66/day of use to own this boat. That's $14.25/day whether you use it or not.
SCENARIO 3 - The Real World Bargain

Buying the bargain - lets forget theoreticals, and use a typical scenario you might encounter buying a bargain (through distress sale, lost job, etc). This is the actual scenario it would take for an inexperienced boat owner to fix up my newly acquired hardship-sold 1970 Coronado 30. She came with several sails, an outboard, and several anchors. When I bought her for $2,000, here's what was wrong:

Palmer 60 inoperable, needs to be rebuilt or replaced.
Several leaking windows.
No cushions salvageable for re-covering, will need all new cushions.
No toilet in head, only porta-potty.
Hatch slider boards cracked/broken
Companionway hatchboards must be replaced.
Hatches need new rubber seals,
Boat needs total repaint - bottom and topsides.
No electronics.
Pig dirty. Needed to be cleaned completely.
Batteries are probably dead.
Bulkheads have dated faux wood paneling that has faded. They need to be recovered or painted.
No electronic bilge pumps.
Alcohol stove is not very practical, and can be dangerous.
Sail Cover and outboard covers need to be replaced.
At least one loose stanchion port side.

EXPENSES & DEPRECIATION__________________________

BEFORE BUYING

$120 - ID state sales tax (6%)
$30 - Year License
? - Property Tax
_________________________
$150 TOTAL THIS SECTION

RETROFIT EXPENSES

HAUL OUT EXPENSES

$1000 Haul out, clean bottom, paint bottom
$2500 Topsides paintjob
$100 Zincs
$10000 Diesel Engine Replacement - prop, shaft, install, etc.
$300 New throughhulls
___________________
$13800 TOTAL THIS SECTION

AT THE SLIP EXPENSES

$1400 Complete new set cushions
$50 Sealant and misc to fix leaking windows
$100 Hatch slider boards
$100 Hatch boards
$30 Rubber seals for hatches
$50 cleaning materials
$150 VHF Radio
$250 GPS Handheld
$300 Batteries
$200 Marine Battery Charger
$230 Mainsail cover
$30 Outboard cover
$50 Bulkhead paint/brushes
$200 Head and misc parts
$100 2x bilge pumps
$500 Used electric replacement stove for alcohol stove.
$200 Anchor Chain and Line
$400 Used manual windlass
______________________
$4340 TOTAL THIS SECTION

$18140 TOTAL RETROFIT EXPENSES

That's bargain hunting for mostly new stuff.

If I bargain hunt for used stuff, and do as much of the labor I can do myself, lets say I can do so well I can save 50% on these costs.

$9070 CAPTAIN FRED BARGAIN HUNTER RETROFIT EXPENSES

Now we can start to maintain and own her.

FIRST YEAR

- $0 maintenance (the maintenance is covered by the retrofit)

- $3,200 expenses = $300 per mo.slip rent + $200/yr liability insurance

- $0 depreciation (its actually starting to appreciate now)

NEXT 4 YEARS

- $8,000 = $2,000 x 4 (10%/year) next 4 yrs maintenance

- $12,800 expenses next 4 yrs slip fees and insurance

- $0 depreciation ()

__________________________________

$16,000 TOTAL SLIP FEE AND INSURANCE EXPENSE

+ $150 TAXES AND FEES

+ $8,000 MAINTENANCE

+ $9,070 CAPTAIN FRED BARGAIN RETROFIT

+ $2,000 ORIGINAL PURCHASE PRICE

__________________________________

$35,220 TOTAL to own this boat for 5 yrs.

That’s approx. $7044/year if you don’t sell it.

If you do resell it after 5 years for $12,000 resale value (this is about market value, give or take 20%) (private sale/no commission)

then $23,220 non-recovered expenses/depreciation divided by 5 yrs = $4644/year

If we got the maximum of 60 days onboard our boat each year, this factors out to $77.40/day of use to own this boat. That's $12.72/day whether you use it or not.

-------------

To recap, its obvious that to own a boat is expensive. The dream that once you buy a boat, the wind is free and there's a few costs on the side to keep her floating is mostly true, but sadly there is no way to escape the costs, which, for some, and depending on the situation, can be substantial.

The reason I wrote this article is for dreamers to realize this, and that no matter what the cost of boating, the end result is priceless. The places you can explore, the feeling of joy charging downwind at 10 knots, the fact that you could take off tomorrow for any port you desire is all worth every penny. Just make sure you don't go broke waiting to make your sailing dreams come true. Expect to spend this much, and if through your thriftiness and my inaccuracy you manage to save 50% over my costs, you're a true sailor who's beating the system. But it ain't free, make sure you can afford it... its worth it.

[CaptainFredGreenfield]

Originally Posted by Maine Sail

I hate it when people shoot from the hip or use a bad data set..

Let's see I have bought and sold six boats since 1997:

SeaWay 19 - Paid 5k sold for 6.8k

Catalina 30 - Paid 16.5k sold for 22k

Cataina 36 - Paid 47k traded in for 56k

Mainship Pilot 30 - Paid 102k traded in for 105k

Catalina 310 (brand new) Paid 111.3k sold two years later for 107.5k

CS-36 Paid 47k have not sold yet but was offered 60k last summer if I would...

Made/Lost: 1.8k + 5.5k + 9k + 3k - 3.8k = net increase in value over 11 years of boat ownership = +15.5k

Even on a two year old boat I only lost 3.4%!! If I were to use Captain Fred's numbers my 2005 Catalina 310 would look like this:

Original purchase price March 2005 = 111.3k
- 30% Year 1 = 77.9k
-20% Year 2 = 62.3k
-10% Year 3 = 56k

(boat actually sold in winter of 2007 for 107.5k)

If you are a hack, and don't maintain or care for your boat you WILL lose money! A well maintained boat will sell at the absolute tip to of the market and will sell quickly.

Our Catalina 30 sold to the second looker in just four weeks, our C-36 sold to the first looker within three days of trading it in, my Mainship sold to the first looker within in one week of trade in, and our Catalina 310 sold to the second looker in just about 8 weeks.

The bottom line is that boats are still expensive and time consuming but the OP is off on the math. My scenario is not standard, as my boats are always in the top 1-2% of condition, but even if you go by soldboats.com the numbers don't work in the OP's post..

Most boat owners don't get into buying boats so that they can flip them. Most are lucky to see the same resale value when they sell them, because most buy them for personal pleasure, use them, then have to repair and upgrade what they wore out or broke.

You say all of your boats are in the top 1-2% condition.

How long did you own them? If it was only a couple of months with no use, there probably was very little you had to do to them.

Did it cost nothing to put them in a slip, insure them, license, maintain them? Did you ever take them out and use them? If so, did you ever have to replace lines, repair sails, or replace any other components that went wrong?

Did you have any wood on board? Did you have to care for it?

Did you ever have to haul out? Bottom Paint? Bottom clean? New Zincs? Labor? How much did that cost?

The point is, the reason why your boats DIDN't depreciate heavily is because it takes a lot of work and ownership cost to keep a boat in the top 1-2%. You can either pay for it on the front end or the back. If you're lucky and your boat only needs 50% of my estimated expenses to keep it in top shape because its special or something, then congratulations. But tally up how much it cost to simply own those boats, and I think you'll see it cost a lot to keep them in top shape, let alone own them. And that sure ain't taking them out for long voyages where things can and often do break and need replacing or repairing.

In the long run, you didn't make a dime owning those boats, if you bought them to flip them, you might look at it on paper instead of just the sale price and figure that everyone who says boats depreciate is wrong or using a bad data set.

The whole point is, my schedule, much like the depreciation schedules you might find anywhere on the net are generalizations, meant only to get a new boat owner thinking about how much they are going to have to spend on their boat. Its not going to work perfectly to apply to all boats, all models, in all geographic locations. Or did you forget about the location part?

The fact that my Rawson 30 in So Cal is worth 60% of what it would be worth in Seattle? There's no way I'm going to account for those things in a simple article.

[camaraderie]

Fred...while you're entitled to your opinion, I think your depreciation data is WAY off base too. Maine wasn't really talking about flipping. He was talking about a boat kept in good repair. My own experience (6 boats - 38 years of ownership) says that you can buy used production boats...keep 'em for a few years and spend a bit on them and still sell for VERY close to what you have in them in initial price and upgrades (not maintenance).
Now the economy is in the tank so EVERYTHING has changed for the moment but I am talking about normal times. Hell...right now, you might buy a boat as an investment and do better than most other choices!

[Maine Sail]

Originally Posted by CaptainFredGreenfield

Most boat owners don't get into buying boats so that they can flip them. Most are lucky to see the same resale value when they sell them, because most buy them for personal pleasure, use them, then have to repair and upgrade what they wore out or broke.

I don't "flip" boats I buy a boat get lots of use out of it, keep it spotless, get bored and move on..

Originally Posted by CaptainFredGreenfield

You say all of your boats are in the top 1-2% condition.

How long did you own them? If it was only a couple of months with no use, there probably was very little you had to do to them.

One boat I only owned for one season all the others were at least two+ years. We've had our current boat now for three. They all got LOTS of use and LOTS of love and attention so to minimize any loss in value. I used to detail boats for a living when I was younger so I know the HUGE importance of appearance on value.

Originally Posted by CaptainFredGreenfield

Did it cost nothing to put them in a slip, insure them, license, maintain them?

Of course it did but apparently you chose not to read where I said

Originally Posted by Maine Sail

Of course none of this changes the fact that boating is expensive and will cost a LOT more than the original purchase price..

But seeing as you asked here is my break down in Maine.

Mooring = $20.00 per year & about $350.00 every four to years for new chain or 107.50 per year over four years.

Winter Storage = I don't skimp and pay for shrink, pressure wash and remove my stick each winter to the tune of about $2200.00

Insurance = $680.00 per year

Registration = 68.00

Total Fixed Costs $3055.50 per year

Originally Posted by CaptainFredGreenfield

Did you ever take them out and use them? If so, did you ever have to replace lines, repair sails, or replace any other components that went wrong?

We average well over 1k nm per season. You are ALWAYS upgrading or fixing something but you do with any large investment. This is the big hidden cost and why it is so important to DIY!!

Originally Posted by CaptainFredGreenfield

Did you have any wood on board? Did you have to care for it?

Some boats yes but three of them had NO external wood including the current boat. We have a long winter up here and it gives us lots of time to putter away on things we enjoy. If you are not handy, and don't enjoy working on boats then you probably should not own one unless you have money to just throw away or burn..

Originally Posted by CaptainFredGreenfield

Did you ever have to haul out? Bottom Paint? Bottom clean? New Zincs? Labor? How much did that cost?

Sure we haul out every winter for six months. Zincs cost me about $2.19 (LINK) and $6.99 (LINK) which is a FAR CRY from the $100.00 you quoted plus I get a commercial discount on top of those prices bringing my yearly grand total to about $10.00 (I usually buy three engine zincs one shaft). If you spend $100.0 on zincs you may have a problem that needs to be addressed. As for labor I have not paid labor in years and do everything myself. The only labor I pay on a yearly basis is the charge to pressure wash & step and un-step my mast. I tune it myself. I used to do my own pressure washing but for the $44.00 charge it's just not worth lugging my pressure washer to the boat yard anymore..

Originally Posted by CaptainFredGreenfield

The point is, the reason why your boats DIDN't depreciate heavily is because it takes a lot of work and ownership cost to keep a boat in the top 1-2%.

If you want to be successful at anything in life it takes hard work! Boat ownership is not a sit on the couch, point the remote control at it sport, and it requires a time and labor commitment on your part! All in all though it's not really as much time as most people think, but yes it will require time.

You need to have a schedule of events and time-line for certain tasks to keep up with it or you'll get so far behind you'll never catch up. Try working on a 100+ foot mega-yacht without a schedule and you'll be screwed really quickly and never ever catch up. Just ask me how I know....

Originally Posted by CaptainFredGreenfield

You can either pay for it on the front end or the back.

Even if I add in all my expenses they still DO NOT come anywhere near your claims of 30% first year, 20% second and 10% there after. You never addressed my 3.4% depreciation on a brand new boat that I sold less than three years later. On that boat I literally added nothing but a larger alternator and an stereo that accepted an iPod for a total upgrade cost of about $369.00. I did spend money on cleaning supplies and spent time keeping up with it but that was it. She was the cleanest 310 on the market and that is why she sold. The guy that bought it had looked at every 310 North of VA and it was also the most expensive.

Originally Posted by CaptainFredGreenfield

If you're lucky and your boat only needs 50% of my estimated expenses to keep it in top shape because its special or something, then congratulations. But tally up how much it cost to simply own those boats, and I think you'll see it cost a lot to keep them in top shape, let alone own them.

Yup we've never been in disagreement on this at all! Where we disagree is your depreciation numbers which are not realistic. I had access to Soldboats.com until about a month ago when a buddy who was a broker left the trade to go into the family business. I can assure you that 30% then 20% then 10% each year there after is not real world. Can it happen? Yes but it is not the norm at all and actually quite far from it.

Originally Posted by CaptainFredGreenfield

In the long run, you didn't make a dime owning those boats, if you bought them to flip them, you might look at it on paper instead of just the sale price and figure that everyone who says boats depreciate is wrong or using a bad data set.

I never ever said boats don't depreciate or that they are a good investment! I would never buy boats to flip! As for the bad data set I'd really like to know where you got your 30, 20, 10 number from. I will remind you again that my 310 sold for 107.5k which is 3.4% below what I paid for it. We sailed her almost 2.5k miles over two seasons and for a brand new boat I was expecting to lose at least 10% - 15% which is more standard.

Remember your numbers had my 310 selling for 56k when it really sold for 107.5k. That is a 192% price difference !!!! Something is obviously wrong between a real sale and your 30,20,10 numbers. The last time I checked Soldboats.com, about 10 months ago, no 310 had ever sold for anywhere close to 56k.

Originally Posted by CaptainFredGreenfield

The whole point is, my schedule, much like the depreciation schedules you might find anywhere on the net are generalizations, meant only to get a new boat owner thinking about how much they are going to have to spend on their boat. Its not going to work perfectly to apply to all boats, all models, in all geographic locations. Or did you forget about the location part?

The fact that my Rawson 30 in So Cal is worth 60% of what it would be worth in Seattle? There's no way I'm going to account for those things in a simple article.

The you should put a depreciation range rather than trying to scare the living bejesus out of folks by telling them that in three years their 111.3k investment would be worth 56k.

Perhaps saying: "First year depreciation, depending upon location, boat and how you maintain it, could range from as little as 3% to as much as 30% and second year depreciation could range from 3% to as much as 20% and year three and beyond can range from about 1% to 10% per year".. Blanket statements that scare folks are not what we need to grow this dying sport!

If you maintain your boat to a high standard, which DOES cost money, you will and can minimize losses. If you treat your boat like a floor matt then it will be reflected in your tail end losses...

[hellosailor]

Fred, I take it you aren't an accountant?[G]

While your bargain boat refit includes engine, sails, and bottom paint--you don't factor those in for your five-year figuring in general. If you do get 30-60 days of sailing per year, you can make some reasonable assumptions regarding what percent of your sails will be "consumed", your engine hours towadds overhual, and of course the annual bottom paint. Even if those vary with the boat, they are real costs that must be factored in, and pro-rated on an annual basis just the same way that dockage and insurance are.

Doing accurate expense projections isn't easy. But if you just wanted to slip out for a couple of hours for beer can racing one evening--the alternative could be $125/hour for therapy for $400 for the day's charter, since you usually can't charter by the hour, much less reserve a charter boat just for an evening. (Usually.)

[CaptainFredGreenfield]

Originally Posted by camaraderie

Fred...while you're entitled to your opinion, I think your depreciation data is WAY off base too. Maine wasn't really talking about flipping. He was talking about a boat kept in good repair. My own experience (6 boats - 38 years of ownership) says that you can buy used production boats...keep 'em for a few years and spend a bit on them and still sell for VERY close to what you have in them in initial price and upgrades (not maintenance).
Now the economy is in the tank so EVERYTHING has changed for the moment but I am talking about normal times. Hell...right now, you might buy a boat as an investment and do better than most other choices!

So answer this:

How much is a $20k boat worth after 5 seasons seeing 60 days a season onboard, with no cleaning, maintenance, upgrades, etc?

MY feeling is, that boat is going to be trashed. You'll be LUCKY if its worth 60% of its original value, and that's assuming you didn't BREAK anything. Everything will be worn substantially.

So then, how much is that same boat worth if you maintain it to its original condition, maybe you add a small something here or there as an upgrade? Probably close to its original price.

The question that my article, and what I've spent a lot of posts trying to help many here who don't seem to be getting it is - that maintenance is EXPENSIVE. So are the slip fees and insurance. It all adds up and the longer you keep the boat, the more that number adds up on paper.

That has been my point since post #1 - Pay it in depreciation after 5 years of total neglect and usage what would you say... 30% depreciation? 40%? 50%? Try to honestly answer that question.

As many have said here, we buy distress saled boats where the last owner got in over their head and is wearing that boat and can't afford it. In the case of my Coronado, I bought it for 2,000. In working clean condition its worth 8-12k. How much depreciation is that? You tell me.

And as I said originally, you are arguing about 5 or 10 % depreciation. Even if I'm 50% wrong, were talking a difference of a few thousand maybe. AGAIN thats not the cost I have been talking about since post #1. I'm talking about those TENS OF THOUSANDS you will spend on simply docking the boat, hauling it for storage, getting the bottom cleaned, etc. etc. Basic costs.

That is stuff that a novice doesn't think about.

[CalebD]

I am not an accountant but I do know some math. Depreciation has never made much sense to me although I will use it with business tax returns and such.
You buy a product. You use it as long as you can and then it breaks down or stops working. All assets are not created equal. Some appreciate and most depreciate. Automobiles mostly depreciate because owners do not maintain them properly and the amount of money it takes to rejuvenate an old and ill used car is more then the book value. Some people love old cars and care for them and keep them in great shape. An antique Chevy Mustang that is in prime condition is worth more (in todays dollars) then when it first sold on the antique market. It seems the same is somewhat true on the boating market although I do believe the number of antique or 'classic' sail boat enthusiasts is smaller then the number of combustion engine only vehicles.
Yes, sailboats can be expensive to own but if your mooring fee is $25/year and your boat is trailered in the off season it does not cost nearly as much as it might seem. Nothing lasts forever and eventually requires replacing of fixing but it does not have to be such a major drain financially if your boat is small enough to be trailered and kept on your own property. If you do all your own work then the cost is even lower.
I spent $1K on my used circa 1982 Lightning 19' sailboat with trailer and those are my figures to date. If I gave her a new set of sails it would likely be more expensive then my original investment. Depreciate that!
The bigger the boat, the bigger the costs.

[CaptainFredGreenfield]

Originally Posted by Maine Sail

One boat I only owned for one season all the others were at least two+ years. We've had our current boat now for three. They all got LOTS of use and LOTS of love and attention so to minimize any loss in value. I used to detail boats for a living when I was younger so I know the HUGE importance of appearance on value.

You know how to detail boats inside and out. Yes, that will help resale value a TON. The novice boat owner may or may not understand that just because boats are in the water doesn't mean they don't get dirty.

But seeing as you asked here is my break down in Maine.

Mooring = $20.00 per year & about $350.00 every four to years for new chain or 107.50 per year over four years.

Winter Storage = I don't skimp and pay for shrink, pressure wash and remove my stick each winter to the tune of about $2200.00

Insurance = $680.00 per year

Registration = 68.00

Total Fixed Costs $3055.50 per year

Thats good costs. Do you spend anything on maintenance? Does your haulout cost anything? Do you buy any parts to replace anything or do you just dunk her in spring and hoist the sails?

We average well over 1k nm per season. You are ALWAYS upgrading or fixing something but you do with any large investment. This is the big hidden cost and why it is so important to DIY!!

DING! You DIY because you know how to and you can. Many do not or can not or do not understand the amount of upgrading or fixing. THATS WHO I WROTE THE ARTICLE FOR. You also conveniently leave out how much it would cost to pay someone to do most of the hard DIY stuff. I'm talking dollars and cents. Thats the premise for this article, not how to save money by DIY your mast lights and refinishing your rails.

Some boats yes but three of them had NO external wood including the current boat. We have a long winter up here and it gives us lots of time to putter away on things we enjoy. If you are not handy, and don't enjoy working on boats then you probably should not own one unless you have money to just throw away or burn..

But now you are setting conditions for who should and should not own a boat? What if someone just wants to do some basic cleaning and take their boat out? What if they have no idea that all of this work is necessary, and they aren't very handy, but they love to sail just the same? "you have money to just throw away or burn." Care to put a dollar figure on that? THATS what I'm trying to do with this article!!!!!!!!!!!!!!!!!!!!

Sure we haul out every winter for six months. Zincs cost me about $2.19 (LINK) and $6.99 (LINK) which is a FAR CRY from the $100.00 you quoted plus I get a commercial discount on top of those prices bringing my yearly grand total to about $10.00 (I usually buy three engine zincs one shaft). If you spend $100.0 on zincs you may have a problem that needs to be addressed. As for labor I have not paid labor in years and do everything myself. The only labor I pay on a yearly basis is the charge to pressure wash & step and un-step my mast. I tune it myself. I used to do my own pressure washing but for the $44.00 charge it's just not worth lugging my pressure washer to the boat yard anymore..

So you do all of your own labor, buy all of your own parts. Yeah you sound like the novice dreamer boat owner I am referring to with the article.

The zincs should have been $10 not $100. Its called a typo. Thanks for catching it though.

As for the bad data set I'd really like to know where you got your 30, 20, 10 number from. I will remind you again that my 310 sold for 107.5k which is 3.4% below what I paid for it. We sailed her almost 2.5k miles over two seasons and for a brand new boat I was expecting to lose at least 10% - 15% which is more standard.

If you bought her brand new, she's used now and she's worth 5-10% less the moment you take posession. Show me a single sailboat that is 2 years used that is worth the same as a new sailboat. It doesn't exist. When boats become classics, they can, become worth MORE than their sale price new. But compared to how much was spent simply keeping her floating in top condition, its a major money losing situation.

And you're not paying attention.

If you NEGLECT the boat, doing no MAINTENANCE, you will see an additional 10-20% drop. If she's already got severe wear problems after the first year, depending on the issues, you better believe you're going to see a sailboat worth 15-30% less than she was when she was new.

Remember your numbers had my 310 selling for 56k when it really sold for 107.5k. That is a 192% price difference !!!! Something is obviously wrong between a real sale and your 30,20,10 numbers. The last time I checked Soldboats.com, about 10 months ago, no 310 had ever sold for anywhere close to 56k.

No, 107.5k is 192% of 56k, but that is a 92% price difference, not a 192% difference. Come on now, if you're going to be correcting my math, please get yours straight.

Did you notice that once again, you are trying to apply my depreciation schedule to your perfectly maintained boat (regardless of how much it cost to maintain it)? To your boat which was undoubtedly bought well, is a coveted model for your area, and is among the finest of its class? Can you not see that you are not Joe sailboat buyer, sitting at his desk dreaming of buying a boat, not knowing what he is getting into? The massive depreciation in those first years comes from NEGLECT, wearing the new off, and not knowing how to fix it. It is further compounded by owning a model in which their is no coveting, in an area where they are plentiful.

Now your boat may have sold for only a fraction less than you bought it for but that is simply not true of all vessels, and the longer they are not new anymore the more they fall from the original price. For instance, Looking on boattrader.com, I can't find any 2006-2008 310's, but for an immaculate 2005 310, its at $84,900. 2005 Catalina 310 For Sale In Naples, FL: Cruiser (sail) - BoatTrader.com

As we go further down the line here's a 2003 310 for $83,000, 2003 Catalina 310 - Boats.com

and a 2001 310 at $69,900 2001 Catalina 310 - Boats.com

Now I realize my numbers aren't perfect, theres no way you could make ONE set of numbers work for EVERY boat in EVERY geographic location. But I want YOU to talk to the guy who bought that 310 in 2001 for $110,000, spent tens of thousands upkeeping her, and now needs to sell her because he can't afford her, so he's doing it at $69. YOU talk to him. YOU tell him depreciation doesn't exist. YOU tell him he didn't lose 35% of the value of his boat over 7 years, and that Captain Fred's a nutcase because he SHOULD be listing it for $100k, because thats how depreciation in your REAL WORLD works.

That even though he spent TENS OF THOUSANDS docking her and maintaining her, she still lost a whopping 35%, but if he had just done it like you - and put a new ipod radio in her, he could have sold her for $100k.

The you should put a depreciation range rather than trying to scare the living bejesus out of folks by telling them that in three years their 111.3k investment would be worth 56k.

At the worst end of the scale, engine broken, sails damaged, other issues, $60k isn't out of line at the end of 3 years. You break an engine by not maintaining it, how much did that depreciate the boat?

If you maintain your boat to a high standard, which DOES cost money, you will and can minimize losses. If you treat your boat like a floor matt then it will be reflected in your tail end losses...

How ambiguous. Care to attach a proper generalized schedule to how much a boat loses in value if you neglect it and use it 60 days out of the year? Can you honestly not expect that there will be some major cost in there somewhere? If you ignore it and leave it unfixed, HOW MUCH DID THE BOAT DEPRECIATE? How about after 5 years?

How much would you pay for a 310 after 5 years with the engine needing servicing, noticable wear and tear on everything, a sail or two damaged, its dirty, bottom hasn't been cleaned in who knows how long, zincs haven't been changed and possibly other issues?

GIVE ME A NUMBER!