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Old 12-26-2012
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Income and depreciation, never the twain shall meet?

Hello again,

If anyone has seen my other posts you'll know that I'm more than a bit of a NUB. Right now I'm working on getting my first real sailing experience, and despite the lack of experience I long ago concluded that a liveaboard is the most rational approach for my future plans. I have a knack for travel, and as I move this to an international endeavor I see numerous benefits to this lifestyle (have you seen Japan's housing costs?). At the same time Iím putting away more and more every year towards the purchase of my future livaboard.

Meanwhile, I spend a lot of my spare time searching for the boat of my dreams. Multihulls have always been the focus of my attention; I like the look, the space, the stability, and the speed that they offer. I know itís going to get some scoffs, but the look and the open space is important to me. When youíre as young as I am attracting girls is still a pretty important part of life. Taking a girl back to a tiny cabin on a monohull surely wonít score any points, and if itís rocking back and forth thatís doubly so.

The boat Iím most attracted to is NEEL 45 at the moment. I like triís over catís, but want the space of cat. Not the prettiest thing on the water but the rounded look makes me think of the Enterprise so it passes.

If I can put away fifty per year that means in eleven years I could afford it at the current price, which is a bit far out in my book. I was wondering what an expectable depreciation would be for a mid-size luxury cruiser like this would be in five years.

Before you go off about the variability, lets set some controls:
- Not a charter boat
- No issues with the hull, keel, or rudder.
- No issues with the mast, rigging
- Well maintained engine and sails in decent condition
- Minor electronics issues if any

So is it reasonable to expect that a boat in good condition would lose 15-25% value in five years? Iíd prefer a conservative estimate, although I will be looking for a good deal of course. Basically, if a $560k boat is still going to be $500k in five years I probably need to start looking at cheaper boats to save up for.


On the other hand, my ideal boat would be a 38í-42í tri with the NEEL style living space that merges the outriggers with the main hull. Would it be wise to look at having a custom built instead? What have others paid for a custom semi-luxury cruiser around 40'?


As you can see Iím really in the dark here. Iím trying to create a 10 year budget that includes buying a boat, buying property, and putting a sizable chunk away for my travels. In terms of my financial planning this is a huge grey spot that could turn my five year plan into a ten year plan in a heartbeat. Iím still working on getting the experience to know if a liveaboard is really the right path for me, but Iíd like to get a realistic hold on how big this financial mountain really is.
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Old 12-26-2012
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Re: Income and depreciation, never the twain shall meet?

don't see any thing on living expenses or slippage...these two alone can run 10's of thousands per month as a transient, 50' length x 22' width, insurance, power and fuel in places that you indicate you may want to visit....eating out, drinks, local travel, etc...

the bigger issue issue, not addressed is that of the whole liveaboard lifestyle, as you apparently have not DONE it yet. It is one thing to plan on doing it, another to do and see if it is what you dream it is. I am suggesting that it will not be. Having done it, on a budget, I can tell you it is not for everyone. And if you do not test this life prior to spending $$$$$ you may be quite upset with the outcome.

I would buy a small boat, mono or multi, or even both for a time - given your plans and SEE which YOU like better. A cat/multi this length is a LOT of boat for a single guy, even a couple with a crew.

Asking any internet forum for this kind of information is like drinking water from a fire hose. As to your original question, few, if any boats will ever appreciate. A one off such as the Neel, even with all of it's recent press, may or may not do as well as the more well known builders. Depreciation is 20-30% upon purchase and 5-10% per year there after for 10-12 years, at least. Then it may stabilize as inflation and economics make it appear to appreciate, but when you factor in maintenance, upgrades, do overs, etc....costs will eat any "appreciation" very quickly, especially when it is time to sell. Who knows in 7-10 years what style boat will be in vogue, and thus easy to sell at a "profit"

All the best, YMMV
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Old 12-26-2012
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Re: Income and depreciation, never the twain shall meet?

There are way too many variables, and not all boats depreciate the same.
In this case there truly are no comparable production trimarans in that size of any age that allows the depreciation to be charted reliably.

When I bought my 2007 Gemini in 2007 the base price was 154, the options on price was 168. Two years later my wife delivered a Gemini 11 weeks newer than mine to Mass. It sold used for 170.
New Gemini's today can go for as much as 225.

Go figure.

Of course you can always find a deal, a repo, or a salvage.
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Old 12-26-2012
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Re: Income and depreciation, never the twain shall meet?

New boat prices will probably tend to go up with inflation unless they are chinese. So in nominal prices a new one in 10 years would be about a third more than now. A used one may fall a bit initially but not much as it tends to be better equipped, however in nominal terms it may stay pretty much the same if maintained.
Of course your savings will also grow. Saving 50K a year plus buying property sounds like a lot of income. Maybe that means your time now to sail will be limited. In ten years you or your then wife may be hooked into an affluent lifestyle so who knows if this will come to pass.
The boat expenses plus opportunity costs of having a boat of that value (for which you would need crew) would be something like 75k +- pa which would pay for a lot of traveling in comfort if not luxury with less risk of getting bored after some time.
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Old 12-26-2012
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Income and depreciation, never the twain shall meet?

If you are looking for a boat to help you score you might be better off booking a flight to Vegas.
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Re: Income and depreciation, never the twain shall meet?

Haha, well to explain this whole women thing: If I were buying a car I wouldn't buy an astro van unless I planned to join the clergy. On the other hand, I wouldn't buy a corvette just to up my odds with women either. In the end, I'd settle on the Honda Element because it has the utility without counting against you when a girl sees it.

KD3PC
I've excluded the costs per annum and travel expenses because I don't intend to stop working at any point in my life. The costs to purchase the boat is an additional expense, however I can support the maintenance, travel, and other monthly expenses on my income.

In terms of needing to get my feet wet you're absolutely correct. I would never buy a boat, especially not a rather expensive one, without having plenty of experience before hand. I work during the entirety of the hurricane season so I only have a few months every year in which I can gain this experience, but already I'm setting up the first test run and plan to continue to do so every year until I'm sure that this is the path for me.

Your comment on the size rang a few bells, I realized that I didn't properly translate my monohull research into the multihull selection. There are a few I could travel with, and I'm sure many more granted I actually have the boat, but this does seem exorbitant. My attention is starting to drift towards to Fountaine Pajot, especially since Bruneel worked with them for so long and the NEEL's definitely show some similarities. The Maestro (owner version) seems very well suited for single-handed voyaging. Plus they're way more affordable and there's a lot more on the market.


Thanks for all the advice!
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Old 12-26-2012
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Re: Income and depreciation, never the twain shall meet?

KD3 pretty well nailed it. During the depreciation you also have operating costs.

An old rule of thumb for operating costs was 10% of the new cost per year. That would probably increase significantly in a liveaboard and/or cruising scenario.

The best advice though, IMHO, is to try it first. Living on boats is like living on islands - the reality, inconveniences, adjustments etc. quickly overtake the romantic illusions for a lot of, if not the majority of people who try it.
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Re: Income and depreciation, never the twain shall meet?

You got a lot of good advice. In terms of the financials you can look up used boat prices like used car prices in guides like the NADA and make up your own depreciation table. Different boats depreciate at different rates but all level off "fully depreciated" at some point... used to be at about 7 years. That point is usually a sweet spot to buy at. Bear in mind that electronics may become out of date in that time. You need to factor in how much you'll be putting into the boat after the sale. Ideally you look for a boat where the previous owner has put in the upgrades you're looking for, as the return on this investment is very low. Anyway set a target of upgrades/after sale repairs as a % of the value. I'm guessing 15-20% ballpark would be a norm. A well cared boat can be a good value even if at a greater cost than a poorly cared for one. With the internet you can shop anywhere, often boats accumulate at places like Lauderdale and... don't rule this out...where owners of a charter have taken thier depreciation and have to dispose of the asset. Maintenance costs will be higher than you estimate, though living aboard you'll have the time and opportunity to do a lot yourself. A smaller boat is a lot more affordable this way. I was living on a 41 foot ketch nice boat but nothing was cheap. Hard to do rigging work on your own even with a great girlfriend to help. Maintenance cost differences are a lot different 30-33-36-40. More an exponential than a linear relationship. Class organizations can be helpful here in learning about what typical class problems are and what the fixes may cost. Good luck.
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Re: Income and depreciation, never the twain shall meet?

Alrighty, so I have a full breakdown of estimated cost for NEEL 45 in 2016. I included a 10% hike off the bat for fittings, depreciation rates calculated by their Fountaine Pajot cousin (14%, 8%, 10%, 6%, 6%), and a 20% repair bill. Total comes in at right about $480 per those calculations, which is appropriate seeming.

This is still a little higher than I was hoping. However despite how helpful this ability to calculate is, you've all very rationally talked me out of aiming for a 45' trimaran. I really like these Fountaines but would still much prefer a trimaran in the area of 33'. Are there any out there that, in the sense that the NEEL does, keep the catamaran interior space on three legs?

And what are build (no design) costs like relative to purchasing a new boat? It seems like I could almost attend the Landing School for naval architecture and design something myself for cheaper than some of these designers ask. But in many cases the design costs are a percentage of the build costs.


Again, thank you all a bunch. Even if I stopped and settled on the FP this gives a much more realistic sense of required savings. And of coarse: I won't buy until I know it's right for me, but if I wait till then to start saving I'll never accomplish it.
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Re: Income and depreciation, never the twain shall meet?

Quote:
Originally Posted by Dowesva View Post
This is still a little higher than I was hoping.
Get used to saying that.

Quote:
And what are build (no design) costs like relative to purchasing a new boat? It seems like I could almost attend the Landing School for naval architecture and design something myself for cheaper than some of these designers ask. But in many cases the design costs are a percentage of the build costs
It costs a lot more to build a boat - even doing it yourself - than to buy one and tailor it to your needs. Especially in this market.

Find something used reasonably close to what you want and customize it - you'll save $$$$$$$$$$$$$$$
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