Your spreadsheet leaves a lot of details out and includes things not applicable to finances. Things like boat length and mast height don't belong in a spreadsheet. Based on some accounting classes I took. There should be things like fixed cost and variable costs or purchase costs vs operating costs, you can also factor in a boats sales price in five years but that is out the window if the economy drops out, think 2009.

Things like new sails, bimini, must haves, area a purchase cost, if you feel the boat needs it right away. A $50k boat might be a better investment than a $30k boat.

I tried to create a spreadsheet for boat ownership for a group owned boat a while back. I factored in fixed costs.
Insurance
Dock fees
Anticipated annual maintenance

I factored in long term costs.
new motor
new rigging
new sails.
I divided the lifespan of sails, motors and rigging individually and divided the replacement cost by the lifespan for an annual cost. In the end a boat that added up to $8,000/year of fixed costs was likely going to cost $13,000/year when all things were factored in. If your client is that cost sensitive they should consult with their accountant. They will tell them owning a boat is a bad investment.:wink

 

Hey,

A few questions:
-Who is paying the broker? When I purchased boats from dealers, I did not pay the broker, the seller did. if I spent $30K for a boat, the broker got $3K from the seller, not me
-4K for winter storage seems very high. I pay $2500 to have my 36' boat hauled, mast dropped, transported to yard, shrink wrapped, etc. This winter I will leave it in the water at my yacht club and the cost is $450 (I just wrote the check)
-who will be working on the boat? If you hire out for everything then $2K in maintenance is reasonable. If the owner will do most / some of the work then it's probably a little high
-If I paid $30K for a boat and then had to put $10K in I would pick a different boat. I always suggest to not change a thing for the first year. Over the winter think about what you want, prioritize, then buy.
-A mooring would be a whole lot cheaper than dockage

Good luck,
Barry

 

Hey,

A few questions:
-Who is paying the broker? When I purchased boats from dealers, I did not pay the broker, the seller did. if I spent $30K for a boat, the broker got $3K from the seller, not me

Good luck,
Barry

Thanks.

You are right the seller always pays the broker. But since every buyer is eventually a seller I include the sellers cost too.

Another way would be to estimate the residual value of the boat after 5 years after selling expenses and depreciation and put that in as one number rather than two numbers.

 

When you talk about a $30k 37 foot boat, it can be assumed that most systems will need major work at some point sooner rather than later and the reason that the boat is only worth $30K is that many if not most of the systems need attention. So with that in mind the $10,000 first year start up does not even begin to touch the real cost. I think that I budgeted almost that much to just get my boat up and running and ended spending nearly double that by the end of the first year and a half.

I think that the maintenance cost is way too low. I do a large percentage of my own work on the boat, but maintenance runs me an average between $3,500 and 4k a year.

I use my boat a lot so these might be acelelrated a little because of hard use, but to calculate the maintenance number, I figure a new sail every 5 years (assumes 2 sails that last 10 years- I actually heavy use 4 sails.) at a cost around $4K per sail for a boat this size. A major engine line item at every 4 years or so ($2-3K on my 3cyl Yanmar. That number includes a lot of smaller items which add up quickly. For example, there are discrete items like a new water lift muffler, transmission rebuilds, main seal replacements, all new proprietary cooling water hoses, prop shaft, dipless shaft seal and cutlass bearing, prop rebuild, lube oil pump, freshwater cooling pump, all belts, etc.). New standing rigging every 12 years ($3-4K). Almost all new running rigging every 7-10 years ($1-2K- For exampleI am on my third set of halyards, and sheets in 18 years). New exhaust, raw and potable water and sanitation hoses (these have a very long life but are surprisingly expensive). New battery bank every 8-9 years (roughly $600 for 2 Group 31 AGM's) New refrigeration every 12 years. New electronics every 10-15 years. New deck canvas every 15 years with repairs every 4-5 years. Upholstery for a boat like that can be $8-12K. I had to do my forward cabin. I still would like to do the main cabin and quarter berths. Rebedding all deck hardware every 15 years or so (not all that expensive but a lot of work and if you don't have a really good friend or a family you end up hiring a helper.) Misc. deck hardware roughly $300 per year. Cabin interior refinishing (materials only $500.) Painting spars ($400 in materials mast, spreaders, boom, and spin pole). And then there is also maybe a little deck recoring, new chainplates, or keel bolts, and perhaps a few new seacocks.

And while these may seem like a lot, there are also a bunch of misc. smaller expenses that tend to be ignored. There are add things like my anchor chain either needs to be re-galvanized or replaced after 18 years and my anchor is getting pretty close to the end of its trustworthy life span. Nicro (Marinco) solar/battery operated air vents are at the end of their life after 12 years. The cowl vents scoops on my dorades needed to be replaced last year. (These are probably 25 years old) but the pair were almost $300.) The Harken jib car lost its bearings. And so it goes year in and year out.

On the other hand, your insurance number is more than double what I pay for my $38 footer including towing with a declared value nearly double the value shown for this boat. Also the depreciation value does not seem right. If the maintenance is performed there should be almost no depreciation since a $30,000 37 footer has depreciated as far as it will probably go, especially if maintained and upgraded. On the flip side, if the boat is not maintained, it can easily depreciate to near zero value over a 10 year period of time. But assuming that your 3% depreciation is right, the broker fee would be 15% lower after 5 years.

Boats are anything but free, but are a good deal on an hourly basis if used a lot, and real bargain in terms of sheer joy per dollar.

Jeff

 

Good points

The one that scares me the most is rigging as many 30-year-old boats have original standing rigging.

 

Good points

The one that scares me the most is rigging as many 30-year-old boats have original standing rigging.

I would not worry about that one too much, but you can ask your son what it costs to replace a 37 foot boat full of new standing rigging.

My 38 foot boat has a particularly simple rig (1 forestay, 1 backstay, 2 uppers and two lowers, 1 backstay adjuster pennant). All combined with a new triangular plate for the backstay attachment and new turnbuckles everywhere else it was less than $2,000. But I had my mast down already and had pulled the rigging off so I could paint the mast.

Jeff

 

I don't see how you can come anywhere close to valid numbers for most items regarding the expenses on a boat that hasn't even been surveyed yet.
Storage, haul outs, shrink wrap, etc., sure they are about the same no matter the condition of the boat. But even a haul out can vary thousands, depending on the actual condition of the hull and running gear.
Add to that an unknown use factor; five times a month or five times a season, and things like fuel, filter and oil change expenses will vary. Wear and tear on gear is directly correlated to use. Then you plop out a figure of $75.00 for electric. Does that include several weekends a season living aboard in the heat of the summer, requiring an AC unit, or a heater if stored ashore in the winter?
Even insurance is going to be a variable expense depending on whether you just want to cover initial outlay or the value after upgrades (add another survey). High or low windstorm deductible? Manufacturer and age of the vessel.
$30k for a 37' boat is probably not going to get one into a very low maintenance vessel. When I entered this business, $1000.00 a foot was a fairly reasonable figure for a used vessel in moderate to good condition. These days I'd say that figure is a starting point for a poor to low moderate condition vessel with outdated electronics, older sails and a long in the tooth engine, (or an ex-bareboat) unless one gets very lucky.
I'd save my energy at this point and tell your friend to be patient and wait until after a survey to begin putting together some kind of ballpark expense estimate.

 

I don't see how you can come anywhere close to valid numbers for most items regarding the expenses on a boat that hasn't even been surveyed yet.

I see your point. I think his idea is to look at the boat and then take a look at what it needs. If it is 30k but used up and needs, sails, engine work, instruments, anchor etc etc that will cost more than the budgeted 10k then just don't buy it.

If it looks good and the survey turns up stuff we didn't see then budjet has to be expanded or the boat passed on.

My intent on putting this together for him was to include the appropriate line items. The actual numbers would be changed as appropriate.

Jeff, for example, said that he doesn't include depreciation but he does figure on 4k for maintenance. I figured about 1k for depreciation and 2k for maintenance and I'm pretty sure my guy is not nearly as fussy as Jeff.

But I get your point the actual numbers have to be adjusted for each boat.

Jeff's real-world expenditures are a very useful data point. If anyone else wants to share their numbers that would be appreciated.

 

The yearly insurance sounds high? Mine is around $700, maybe based on sailing certifications?

You're really not going to know until the survey, I'd get a rigging survey & engine too. The first year I poured a ton into my boat for sails, rigging, electronics upgrades. Before I did any of that, I sailed it a bunch to see what I actually needed.

I'd say after the initial bleeding the first year, it might be around $10k. My boat is 38' in CA

 

Hey,

Here is the maintenance log for my old O'day 35. I bought that boat in 2006 and sold it in 2014. It's in reverse chronological order.

Some details removed for privacy

Hope it helps

1986 O'Day 35 Day To Remember
documentation number
MMSI number:

2014
July 11 Bob takes boat from from Mt. Sinai.
July 3 Sold to Bob $25,500
May - moved from MSYC Slip to Mooring and put into service

2013
11/20 winterized engine raw water.
11/16 Winterize how water side (bypass). Remove headsail and dodger
11/10 Change engine oil and filter. Winterize fresh water system (head, cold side). Need to winterize engine and hot water lines.
10/20 100% jib repaired $180 for new sun cover and pendant. %150 genoa repaired - $350 for new leach panel and sun cover
8/5 New lazy jack lines. 140 UK Genoa repaired (torn leetch), New spreader ends. $300
7/10 Clean decks
7/3 Install new deck stiffener / tie rod. $90 from Rudy at D&R Marine
7/1 - costs: $6200 for XXXX - new rigging, installation of rub rail, repair of transom, installation of Furlex, etc.
$1800 to OMBY - $550 to paint, rest of haul, step / unstep mast, pressure wash hull,etc.
6/28 I sand and varnish toerails
6/24 DTR launched. JB tunes rig. Sails bent on, wires connected. Boat ready to be sailed.
6/22 I refinish (varnish) companionway, handrails, eyebrow. Toerail cleaned and lightened
6/21 James completes rub rail and holder. Transom repaired
6/21 Sail cover repaired by XXXX
6.18 OMBY applies bottom paint (Pettitt SR40)
6/17 new Zinc on prop shaft
6/15 Apply poliglow
6/12 Use poliprep to remove old poliglow. wet sand port boot stripe. Rig work: install new spinnaker halyward and flag halyards. Clean prop, sand, paint w/ zinc prop paint.
6/10 Jib and sail cover to Wedekin for repair
6/7 Jim B removes rub rail and holder. Removes old standing rigging.
6/6 Boat hauled. Rig down. Hull power washed
6/4 take sails down, move boat to old man’s, boat hauled for work
5/20 paint knot / log paddle wheel and install
5/15 bleach all interior compartments, scrub, rinse
5/1 - scrub bottom from dock - it’s pretty bad
4/20 - commission fresh water system
4/14 - move boat from Old man dock to mooring
3/22/13 - New spinnaker halyard- Cajun XLS (not installed)
3/10/13 Order new furler - Selden Furlex 200S. $2800 to XXX

2012
12/11 Change oil, oil filter, and fuel filter (R24S 10 micron)
11/27 James installes new lifelines
11/19 R+R Bent stanchions and stanchion bases with XXX
11/18 Move DTR to Oldman’s dock. Winterize fresh water system.
November - DTR is damaged by super storm sandy. See ‘Hurricane’
October - change fresh water diverter valve
August - new Main sail from UK $2500
6/1 Move boat to dock and take care of water system. Boat can be sailed.
5/31 Put sails on and tune rig.
5/30 Boat is on mooring (moved by Old Man). Lauren I do put boom on, run rigging and connect mast wiring. Too windy to put sails on.
5/15 Boat is ready for launch. Old Man can’t launch until Monday 5/21 and we are on vacation from 5/22 to 5/29.
5/15 pick up mainsail and dodger from Wedekind. $250 for mainsail repairs (leech, batten pockets). $275 for dodger repair (new window and zipper stiching).
5/14 repair mast wires for anchor light and steaming / deck light
5/12 poliglow stb side. install new batteries (Costco 27DC 115 AH, 750 MCA), wash decks, paint prop
5/11 poliglow port side
5/6 paint bottom (SR 40)
5/5 rig check. Need to repair anchor light wiring
5/4 Clean hull w/Poliprep. Clean bottom. Hull is ready for PiloGlow and bottom paint. Test run engine, runs great. Batteries are old and shot.
4/16 R+R shaft Zinc. Service all boat winches (not mast winch)
4/14 Sand Bottom Paint - complete
3/28 Sand bottom paint. Starboard front half complete.
3/23 Sand bottom paint. Port side complete (except for under jack pads)
3/21 Sand bottom paint. Completed about 25% (port rear half)
3/17 rewire - new jumper from ignition to glow plug. New jumper from glow plug (hot side) to start switch. Clean start switch solenoid wire (yellow with red stripe). Clean fuse in that line. Run additional glow plug power line and clean glow plug connections.
3/3 install new glow plug switch
2/21 install new bird spikes on spreaders

2011
12/15 - removed wind instrument -checks OK. Broken wire from mast.
12/4 boat covered
11/19 boat winterized and gear brought home
11/14 boat hauled
11/13 change oil and filter (3879 hours)
11/9 last sail. Solo
6/15 re-seal exhaust flange to prevent water coming in when motoring
6/12 new jib sheets (Cajun XLS)
5/26 headsail leach and foot line replaced
5.20 new lazy jack lines
5/11 boat launched
5/3 paint prop with antifoul
5/1 clean, poliprep, poliglow hull
4/23 scrub bottom with stuff brush to remove dead paint and expose new paint
4/22 Replace STBD port line clutch, Repair instrument mount, new prop shaft zinc


2010
11/13 Unload gear for winter
11/10 change oil. Boat hauled for winter
11.6 Last sail. With Mark, good breeze, great trip
6/12 install new water heater, new engine water pump, new thermostat
($240 for water heater $100 for water pump, $20 for T Stat)
655 remove engine water pump
5/21 Remove Hot Water heater
5/12 Hot water heater is leaking and needs to be replaced.
5/7 Water system commissioned, 2 new lights installed. All mast wired connected. Boat ready for the season
4/26 move boat to mooring. Put boom on. Engine ran hot – bled 3 times. Better?
4/23 boat launched (not in yard, have not heard from OMBY)
4/21 finish poliglow, prep for launch
4/20 Clean topsides, poliglow starboard side
4/19 paint bottom (SR 40 entire family)
4/15 Clean, lighten, oil teak. Test run engine (raw water hoses were reversed). Engine started and ran great. Wash topsides
4/14 wash and wax decks
4/7 Rudder installed. Wire rope is not run correctly
4/1 install new water pump, HX, drain and add new coolant
3/24 finish sanding port
3/17 finish sanding stb side, do ½ of port side
3/9 sand stb ½ of boat w/60 grit
2/25 New shaft (1” X 49”), coupling, packing box hose, clamps, etc.
2/5 Clean engine compartment and bilge
2/5 New Cutless beating (OMBY) - $1000 for all
1/20 January - Prop shat removed, cutless bearing removed. Shaft log removed (OMBY)
Heat exchanger removed, cleaned $75
Walts Radiator 928 1220
807 Hallock Ave
Port Jeffrsn Sta, NY 11776-1220

2009
December – drop rudder (remove quadrant)
11/16/09 Boat hauled
11/16 Change oil and filter, 8 gallons diesel
12/15 remove rudder
11/20 boat hauled
May: New main and jib halyards (Yale Aracom T)
Spring - Pettitt Ultima SSA

2008 Work
11/22 – cover boat, connect solar power
11/10 – winterize hot water side (blow out lines)
11/8 Winterize – remove sails, winterize cold water (drain hot water, need to blow out HW lines). Winterize head and holding tank, bring home electronics, remove impeller (blades cracked).
11/6 Boat hauled
11/1 Change oil. Add 5 gallons of fuel. 3727 hours
8/6 - 15 gallons of fuel. Scrub boat bottom
7/25 - engine doesn't start (does not turn over). clean all wiring connections
July - new exhaust system after NYC trip (hard pipes only, not waterlift muffler)
5/08 New headsail – 140% UK Passagemaker $3000
4/26 –Engine doesn’t start, replace Facet fuel pump
4/25 - Launch day
4/08 bottom done (fair keel, barrier coat, bottom paint - Pettitt Hydrocoat), poliglow
3/08 Sand bottom, keel.
2/08 Boat bottom soda blasted. Don at All Surface Soda Blasting. $1700 for everything.
He did a great job.

2007 Work
12/3/07 send Datamarine Wind Machine to DMI Inc. for repair
11/07 - start bottom paint removal
11/1/07 Boat hauled
10/07 change oil, filter, air filter, tension alt belt - 3685 hours
9/07 change macerator
9/07 tighten stuffing box, clean bilge
7/07 Repair starboard winch
6/07 Service winches (lose shaft and bearing overboard). New gears in port lazarette
4/07 New jib sheets, remove old name, new plow anchor, new mainsheet blocks and routing of sheet, install new name
3/07 Change engine oil, filter, fill fuel tank, fill propane tanks, new propane lines, repair glow plugs (wiring bad), coolant, fuel filters, engine zinc, refrig pulley and belt, radio installed, bilge pump re-wired, 12V meter installed
1/07 new house battery

See on Yachtworld. Listed at $38,900 make offer 11/06/06 for $30K. Offer is rejected, increase to $33K, which is accepted. See boat 11/10 and leave deposit. Survey scheduled for 11/17
Purchased 11/27/06 from XXXXX $33,000
Warren Trafton broker.
Barnaby Blatch Surveyor
Jack Neades Delivery Captain
Costs
$44 X 2, + 2 X 2 for trip to see boat 11/10
same plus $595 (survey) $650 (Haul) on 11/17 for survey
$200 car rental, $300 XXXX, $50 (ferry) for delivery

Delivery was 11/27/06 - Newport to Noank
11/28, Noank to Mt. Sinai

 

I looked at a 35k boat awhile back. It turned out to be one hell of a project boat that I picked up for 13.5k. To take care of all the things the boat needs to go sailing I'm looking at 10k, since I'm doing all the work. With the boat ready to go cruising I'm looking at a cost of around 45-50k total spent. (holy crap water makers are expensive)

In all reality, it would have been better to have bought a boat that didn't need anything done to it, but I really wanted to dig in to what ever boat we're going cruising on and set things up the way I wanted them.

Here is a screenshot of my current costs/projections -- The biggest item in the list is the trailer I built for my boat. I could/should have done it cheaper - but as it stands it will haul any ~43ft, or shorter boat weighing 17k or less.. Shouldn't have any issue recouping my money when I'm done with it.

 

David-
I suspect you left out a zero, the annualized cost of dropping and setting the mast is shown as $26, it should be $260 based on the $1300/5 years?

A boat that size won't be really predictable unless it starts with a damned better than average survey. One YT couple had a thorough survey, made a deal, splashed the boat...and found a mystery leak. Required a haul, reblock, waiting for their mechanic to come back the next week, totally pull the drop and overhaul the shaft/packing box. Pocket change? Engine mechanical surveys routinely miss things that a day-long sail turn out, mysterious engine overheats, pump rebuilds, maybe another haul to replace a seacock that was missed...there's always something.
Rule of thumb on the forum has been to put aside 10% of the purchase cost as being the most common amount that will be needed right at the start. And for a new used boat, towing insurance probably is good idea. Odds are the fuel system will need cleaning or bleeding or whatever diesel temper tantrums, if nothing else.
I heard one surveyor and broker dismiss "some delamination of the hull, probably under the jackstand pads" as being normal for a boat. Oh? Properly placed jackstands cause delamination? (No relation to a blistering problem on the same hull. Ahem.)

Your friend's best defense is in hiring the best surveyor they can find. In being there to provide extra eyes during the survey. And insisting on a thorough sea trial to go with it. They'll still miss things, but there's still a reason why a big boat has depreciated and is being sold for less.

 

David-
I suspect you left out a zero, the annualized cost of dropping and setting the mast is shown as $26, it should be $260 based on the $1300/5 years?

The first section I should have titled differently. It is the variables the following sections yearly and monthly were based on.

The $26 was the total per foot of mast for both spring and fall.

So I had the per foot and length of mast.

 

I don't think depreciation belongs as an annual expense. As long as the boat is kept up and the economy stays stable the value of the boat should not go down. Depreciation is more of an accounting atrifice to delay paying of taxes. Using depreciation will allow the boat owner to pay less taxes over the years the boat is depreciated, so in essence it is the opposite of an expense. However when the boat is sold the difference of what the boat is worth on the books (undepreciated) vs selling price would be taxable.

I am not sure if this is the case but in the past a boat could be considered a second home and if a loan is made on the boat the interest paid should be tax deductible.

 

I believe the new tax laws have eliminated the interest tax deduction for almost all second homes - which would include boats - it may still be possible just very few people will qualify.

At lot of the initial cost involved in purchasing a boat can be a lot smaller in Florida - there are a glut of older sailboats, Cals, Ericson's, Morgan's - some are in rough shape but many are not - newer engines, updated rigging and sails - its just a matter of hunting for the right deal and knowing what to look for - but then the real expenses kick in - slip costs per month.

 

I believe the new tax laws have eliminated the interest tax deduction for almost all second homes - which would include boats - it may still be possible just very few people will qualify.

At lot of the initial cost involved in purchasing a boat can be a lot smaller in Florida - there are a glut of older sailboats, Cals, Ericson's, Morgan's - some are in rough shape but many are not - newer engines, updated rigging and sails - its just a matter of hunting for the right deal and knowing what to look for - but then the real expenses kick in - slip costs per month.

I am not sure that this quote is 100% correct since it was only a quick Google search but here is what I saw:
"While second homeowners can still deduct the interest on new mortgages up to $750,000, experts predict that many people will no longer itemize their expenses on Schedule A. The new tax rules raise the standard deduction to $24,000 for a married couple, and this may be too high a threshold for many people to reach without being able to claim more than $10,000 in combined property and other state and local taxes. Also, homeowners can no longer deduct interest on home equity loans. That is likely to hold back vacation (second) home buying because many people use home equity on their main residence to purchase additional homes. "

Jeff

 

But the depreciation IS real, even if it may not be linear and some rare few folks manage to sell at a gain. If you've seen the Practical Sailor books on classic used boats, they include depreciation charts showing how the resale price of most have fluctuated year after year. Almost always, losing value over time. That's just the way it is.

Something else that might be added to the figures: loss of return on investment. If the boat costs $30,000, and you put that money in a market fund or found a safe investment like a tax-free muni bond, you could make anywhere from 3% tax free (effectively 4%) to perhaps 10% on the stock market. So split the difference, you're losing maybe 5% on the money you "invest" in the non-performing asset of the boat. Where to pin that number down, a very subjective question, but a real one, if you want to get into it.

Then again, at $150 a session for therapy once a week times 50 weeks a year, that's $7500 out of pocket in therapy bills you can save by going out sailing instead. Of course, convincing the IRS that the boat is a medical expense, that may be a little harder.

 

Something else that might be added to the figures: loss of return on investment. If the boat costs $30,000, and you put that money in a market fund or found a safe investment like a tax-free muni bond, you could make anywhere from 3% tax free (effectively 4%) to perhaps 10% on the stock market. So split the difference, you're losing maybe 5% on the money you "invest" in the non-performing asset of the boat. Where to pin that number down, a very subjective question, but a real one, if you want to get into it..

Just for giggles in response to a recent thread where someone was looking to "invest" in a new main for his boat. I thought about the $400 I spent for a new main in 2002, it did not deliver the returns I expected so I thought "What if I invested it in Amazon stock instead?" I would have $50,000 more to my name right now.

 

All you need is 1,000 to 2,000 a month and you will be just fine....

 

Hey Barry,
I just came across this post about the 1986 35’ sailboat ‘Day to Remember’ that you sold to my dad years ago. My name is Rob, and I’m his son. Sadly, my father has since passed away, and I’ve been trying to track down paperwork for the boat but haven’t been able to find anything.

I know this is a bit of an odd way to reach out, I found this post by ridiculous luck and the forum won’t let me message you directly, but I figured it was worth a shot. If you happen to still have a copy of the bill of sale, registration, or anything from the time of the sale, it would really help me. I can provide proof of who I am, and I completely understand if you don’t have the documents anymore. Even any advice you could give me would mean a lot as without these docs nobody will even talk to me.
I dont know if you can direct message me so my email address is RobFernald@yahoo.com

Thank you so much for your time.

 

It is real important to buy a boat in good to excellent condition with many spare parts. I have found out the hard way that there are always expenses and other important things that you have to add to the list. Some expenses cost 3 times more than the estimate.