I wonder if the engine was the problem?
Having been recently looking for a boat to buy I can point out that the decision will effect the value of the boat.
The first thing I would like to point out is rebuilding the engine adds the least to the value of the boat. I think most buyers might prefer having the engine "rebuilt" rather than running rough but I added no value to the boat for having a rebuilt.
Unless it was clear the rebuild was done properly. I didn't see very many of those. A proper rebuild requires the engine to be removed from the engine bay. Otherwise it is just a repair, IMHO.
If you are removing the engine then be sure to clean and paint the engine bay. Replace or recondition everything you can so the expensive engine on which you've spent thousands of dollars has an engine bay that looks like the rebuild was done properly.
Putting even a brand new engine in a dirty old engine bay screams cheap and low quaility.
If it was a rebuild done by the owner it communicates the ability of that owner to do the work. If it was a rebuilt by a local mechanic then a dirty old engine bay will suggest this was a repair done on the cheap and will likely have created more problems than it solved.
I've seen more than one "rebuild" with a dirty engine bay, engine leaking oil, and many rusted parts. These are nothing but trouble, I took into account major engine repair or replacement would be required sooner rather than later.
The cheapest option is repair.
The engine may have to be removed for repair and might cost thousands but it is much more honest to say the engine was repaired rather than rebuilt even if you spent thousands. There is no requirement to say the engine had been repaired unless the person asks why the engine bay looks so good. Then the work becomes maintenance/repair and shows that the engine gets the work and mtce it needs. Be sure to blame the previous owner,
. Repair seems to be a much more honest way to describe the work but I suspect many buyers would think rebuild just sounds better. So I guess it depends, who you are and how you are presenting the boat.
If considering a rebuild I would suggest buying a rebuilt engine and using your old engine to save the core charge. This is really the only proper way to get a good rebuilt engine. The local shop cannot compete with the cost or level of detail of a dedicated rebuild shop. You will also get a great warranty. Of course some local shops can (some are rebuild centers) but I'm saying most can't (although most will say they can).
Max value, and cost comes from upgrading to a newer, lighter, quieter, more fuel efficient engine. At the same time I would refurbish everything in the drive train. Unless the boat is really sweet I doubt you would recoup the costs in the resale so that is something you would do for yourself not for resale.
I decided to pass on most boats with rebuilds as there were enough IPs out there with orginal engines or newer engines.