# a boat as an investment



## webd71 (Mar 31, 2004)

Ok, the title of this tread is a bit of an oxymoron but wouldn’t be nice if one could justify the purchase of new capable sailing vessel in the 38 to 42 vicinity as one could that of a new home?

Sorry for the looonng sentence.

It seems to me that few folks would face ridicule if they took some $200K burning a hole in their checkbook and used it to buy a single family home even if they already had one of those whatchumacallits. 

Now tell someone you know (those of us landlubbers) that you are considering to purchase and move to a new 38 or 42footer for the same $ amount and some are apt to call the loony wagon on ya. 
My ex told me I was a very dangerous man, because I am intelligent and crazier than a **** dog for even considering the heathen thought.

Yes I know the cruising lifestyle has less to do with logic than it does with passion, but it sure would be nice to have some good old fashion "gee it makes sense" in our camp.

So, to the question part. Are there any purely economical benefits in living on the water, other of course than saving on property taxes?

If one were to decide to sell after, say 10 years, could one at least break even assuming proper care and maintenance were lavished on the vessel? 

Boats considered: New **hanse** 37-41, Dehler same length, used Nauticat 35-38.
Purchase type: Cash on hand, secure loan if it made more sense. 

Any thoughts out there?

Mike


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## paulk (Jun 2, 2000)

Buying a boat might be better to compare to trip to Las Vegas than buying a second house. People need a house (or someplace) to live in. And you can always live in it yourself if you have to. Living on a boat can be a hassle. (Think shoveling snow off the deck so you can go to the laundromat. ) People don''t NEED pleasure boats, so the re-sale is always iffy. Some boats are less iffy on re-sale than others - as is some real estate. But added to the risks of real estate ownership: theft, flood, vandalism, fire -- on a boat you have all the risks of a vehicle - running into things or having them run into you - AND sinking at any time because a $0.45 hose clamp lets go, or a dried-out hose splits. A 10-year old boat will have a lot of chances to not re-sell anywhere near its purchase price. But think of the fun you can have finding out if you are one of the lucky ones!


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## jbarros (Jul 30, 2002)

The trip to Las Vegas is an apt analagy. 

You may recover over 50% of your original purchase price on the boat itself, but just right off all the dockage, maintenance, extras, insurance, gas, etc. 

also, seeing as your a land lubber, you may want to try kicking around in a little 20 foot day sailer first, as many sailors have found, the more systems and the more size a boat has, the more the worry, and the less the time on the water. and if you blow $2,000 on a well found 20 foot sloop, you will most likley get most of it back when you resell it.

-- James


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## TSOJOURNER (Dec 16, 1999)

I once bought a Bristol 22'' in 1976 for $5,000 and was offered $8,000 in 1984. I think those days are gone.
Quality though always retains its value. You may have to reach the right buyer but if you don''t over-pay and you buy quality it will retain its value.
Just my thoughts. John Gov.


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## c25 (Sep 14, 2003)

webd,

I think one of the larger things working the wrong way in your theory/desire is your repeated use of the word "new". Buying new automatically locks you into a big $$ hit when resale time comes. Now if you consider a well found, in demand, popular, "previously sailed" boat, then you''ll be a little closer to what you''re looking for..if it''s out there. 

Does anyone have access or knowledge of where to get accurate asking or selling prices of particular boats over time (last 5-10 years)? I''m guessing brokers may have access to ABOS books...are there any other sources? (webd...if you had this info it would be a good start)


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## Jeff_H (Feb 26, 2000)

I would never say that buying a boat, especially a new boat, is a worthwhile investment if it is solely analyzed based on the relative merits of buying a primary residence which is a house vs buying a boat of equal price. 

That said if you buy a boat carefully, maintain it well, and use it a lot, the numbers may be closer than you think. If I think that I spend roughly 200 to 400 hours a year out sailing and cruising and I compare that to the cost of almost any other form of amusement then the $2000 to $3000 that I spend a year on my boat becomes pretty much of a bargain. 

I generally try to buy used boats that are in solid condition and which are essentially good boats but which for one reason or another is priced slightly below the marketplace. I have bought some boats quite cheaply in my day but few have been a ''steal''. I have sold most of the boats that I have owned pretty much for what I had in them and a few for a small profit if you did not factor in sweat equity. 

As a general rule, new boats are a really bad deal from an economics standpoint, because there are a lot of hidden costs to commissioning a boat that can easily equal 10-15% of the purchase price of a boat and which no one is willing to pay for at resale time. What appears to be a modest depreciation in the asking price is often just the tip of the iceberg. 

Of the boats that you mention, I am a fan of the Dehlers. I also suggest that you look at Beneteau First series (which have held their values quite well)and if you have your heart set on a new boat then the Elans.

Respectfully,
Jeff


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## webd71 (Mar 31, 2004)

Any thoughts on the Hanse Jeff? 
It seems to be rigged right pretty much out of the box, fast hull, sweeeet interior.

Price also seems to be not out in left field.
Wonder why we don''t hear more about this capable struddel. 

Danka
Mike


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## Jeff_H (Feb 26, 2000)

I basically like the Hanse 37. I have had a little time around them. I was up close and personal with the sail lockers installing some cleats for an upcoming hurricane. The glass work looks well done and they seem like they would be decent sailing boats. It was very light winds when I was aboard and we did not try to sail other than to send up an assymetrical for giggles. There were a lot of details that I liked and a few that were not my cup of tea but isn''t that always the way. I would not expect a brand new Hanse to be a great investment, But it would be a nice boat.

Regards
Jeff


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## richard_reinhart (Aug 3, 2002)

No, you won''t make money selling a boat 5 or 10 years from now if you buy it new today. Back in the 1970s and 1980s maybe you could buy a new or used boat and THINK you were selling it for more than you paid for it because of rampant price inflation but those days are gone.

Boats aren''t really investments; they''re depreciating assets that take a fair sum of time or money to keep up. I don''t want to sound too glum about this, but go into ownership with your eyes open. I love my little boat, but I keep fastidious records of what it costs to own and I''m frankly shocked when I add it up from time to time.

Jeff is right that you need to make a careful purchase. Boats that need sails or other major purchases quickly become a serious financial drain.


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## TSOJOURNER (Dec 16, 1999)

I made money on a sailboat once, but I got a really good deal with it to begin with, (Hunter 212), it was in really nice shape, the orig. owners never used it and I only sailed it for a year.


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## sailingdog (Mar 19, 2006)

I guess you could compare buying a boat to buying a vacation home, especially since you can probably deduct the marine mortgage interest on a boat, if it has a galley and head. However, the chance of you making money on the sale of a boat is far lower than it is of a vacation property in a good location. 

However, if you look at the boat as an investment, and the time you spend sailing it as part of the return on the investment...the it really matters on how much you value sailing, and how much time you spend sailing.


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## eryka (Mar 16, 2006)

I'm betting a *new* boat depreciates like a *new* car, but an older one has already dropped in price when you buy it, and would be the better choice from the $$ point of view - if that's your only criterion. But you still don't get something for nothing - houses aren't necessarily an easy road to riches. We've owned lots of properties, both to live in and for investments. When you think about the cost of a home, add up *all* the costs meticulously and you find that the true amount of money you put in over the years is more than you think (and hence your 'profit' is less than you think) -- like the monthly cost for a lawn service? or the time on the lawnmower, for one example. Add that up over 5-10 years. Then ask yourself if you've been having fun.


I think the bottom line is that the best justification is if you can see living on a boat instead of living in a house, as an investment in satisfying your soul.

BTW, SailingDog is right that you can deduct the mortgage interest - but view that exactly as you would the decision to buy a house cash or mortgage - in the top tax bracket, yes, you get 28% of the interest money back - the other 72% goes to making the *bank* rich! So look at what your alternative investment would be, and whether it pays > the 'tax-reduced' interest if you take a boat loan.


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## jswwrites (Sep 4, 2006)

A new boat is like a new car...sail it off the "lot" and it's worth 30% less than 5 minutes ago. Sure, it's got warranties and new teak smell and all that. And I guess, just like a new car, if you've got the available cash and realize the hit you'll take, and it doesn't ding your portfolio too badly, go for it. But you won't sell it for anywhere close. However, you'll have a LOT of fun in the meantime!

I'd look at how much time you really will spend on the boat, and if you are really going to SAIL on it, or use it as a floating condo. If you're not really a sailor now, you could end up with a really expensive floating lawn sculpture... There are LOTS and LOTS of boats out there that we never see leave the dock, both power and sail. The slip fees, maintenance, insurance and all that are a big expense, bigger than most people figure.

Remember the old saying: Boats are black holes you throw money into. Truer words were never spoken, but they're a heck of a good time!


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## Faster (Sep 13, 2005)

*Let someone else take the hit.*

New boats do drop in value, like automobiles as mentioned above. New boats also include hidden costs that the buyer must absorb for equipment not included by the manufacturer.

When you buy a well-cared for and well equipped used boat, the original owner took the hit, and bought and paid for all the extra gear that you are getting as part of the package. These items can add up to a considerable value that doesn't usually show up in the selling price as a used vessel.

So it's not just the depreciation hit, but the value of the additional equipment that you gain by (carefully)buying used.


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## TSOJOURNER (Dec 16, 1999)

So I have to wonder, with all of those never-used boats justing sitting at the dock, if there's an impending boat glut. I know it's a buyer's market now (one of the reasons I'm interested), but it sounds like there are factors in place for the boat market to become even more depreciated.


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## cardiacpaul (Jun 20, 2006)

Go, 

there is a huge "boat glut" right now.

Average time to sale from listing date on 30-45 footers in the gulf is 13 months. 

There are many factors of course, the big-blows being a big one. 
In addition, there aren't as many tire-kickers as there were pre big-blow. 
I'm sure that the applicable insurance payouts have been made, but many of those have put the money under the bed, or so it seems.


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## Gene T (May 23, 2006)

I just don't see a boat glut in my area. Boats are over priced and do seem to stay on the market for a long time, but sellers must be flush with cash and are firm on their over pricing. 4 year old boats are listed for more than they sold for new. I have been trying to buy a boat for a year now since I sold mine and the selection is poor, boats are beat up and prices are ridiculous.


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## Planb835 (Mar 25, 2006)

I used to have a gentleman renting the slip next to me who was living on his Catalina 25. He had moved to North Carolina from Ohio to find a better job. Because he owned his boat he was able to save a ton of money since the only expenses he had were his slip rental and monthly expenses. If you compare the purchase of a used boat for $50,000 vs. a house for $200,000 then you could justify to yourself what a great investment you have. The interest and insurance payments would be less.


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## LyleRussell (May 3, 2006)

I agree with Gene T. They're doesn't seem to be much good for sale recently. In the 30-40 foot range everything I look at is either junk or overpriced. 

On the subject of this thread, buying a boat is like marriage. Neither makes ANY economic sense at all yet we do it anyway. I am never going to cost out what the hours of sailing or sex really cost me.


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## btrayfors (Aug 25, 2006)

"I am never going to cost out what the hours of sailing or sex really cost me."

Right on! And, if you did, you'd find the sex costs more :-((

Is this thread for real? A boat as an investment? That's gotta be for folks who don't know the bow from the stern. Or, perhaps, they're not talking about a "return on investment"...in the economic sense.

You sure do invest a lotta time, energy, sweat, blood, tears, boat units ($1,000 these days), and available capital (with your family, boss, friends, etc.). With fewer than 5% exceptions, IMHO, YOU NEVER GET IT BACK.

Is it worth it, then? I suppose that depends on how much value you place on learning, adventure, comraderie, peaceful escapes (be they 10 hours or 10-years long), hugging nature, pitting your wits and skills against the elements, and all the rest which comes with sailing. Sometimes, the simple buildup of stories to share seems like enough. And, of course, the memories.

As someone wise and grey said, "when you're really old, all that's left are the memories".

Bill
S/V Born Free


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## cardiacpaul (Jun 20, 2006)

just did a quick check, found 1113, 30-45ft sailboats to the year 2005 on yachtworld in the western states... vast majority in CA. thats a glut.

Some are obscenely over priced, others are junk, but deals can be made if both parties are willing to make concessions. 

gulf states check reveals 396.


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## LyleRussell (May 3, 2006)

How many of those 1113 are really truly desireable?


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## btrayfors (Aug 25, 2006)

Lyle,

Use the 2% rule: 1,113 boats for sale X .02 = 22.2

So, there MIGHT be about 20 worth considering )

Bill


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## TSOJOURNER (Dec 16, 1999)

I've been keeping an eye on the various offerings in Lattitude 38, Craigslist, and local bay area brokers. The selection of more desirable boats, like Sabres, is very limited. However, there are plenty of Catalinas, Hunters, and Pearsons offered at a wide variety of prices.

I’m not trying to start another debate on the quality of these boats. But, I know I’d get a better deal shopping for a used Ford than I would for a used BMW. And the wider availability of parts and services would keep my operating costs lower.

No, I wouldn’t buy a car as an investment either.


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## cardiacpaul (Jun 20, 2006)

Desirable is a very subjective term, to you or me, desirable is this, or that particular boat, to someone else it may be "the dream come true." 

The Cuban is all agog over the new BMW k1200S, me, a candy apple red Norton 850 Commando. Different strokes and all that.


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## TSOJOURNER (Dec 16, 1999)

Maybe your point is that Ford doesn't make motorcycles or boats.

I have an idea: let’s encourage BMW to make the sailing equivalent of an M3!


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## cyndi63 (Sep 24, 2006)

I think that your only hope of getting your money back is if you buy used (especially close to antique) which also means you will spend more maintenance so the tco will still be questionable but since that isnt hard dollars you dont have to count it  at least not in my book.. if you buy only of course boat insurance is much less on an older vessel


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## btrayfors (Aug 25, 2006)

Hey, I recently made some money on a used boat.

In August 1996 I bought a Catalina 22 in reasonbly good condition for the princely sum of $3,000.

In August 2006 I sold that same boat for $5,000. So, I made $2,000 on it, right?

Well, not exactly. I have two terrible habits: (1) I continually upgrade and improve my boats, using only the best available parts and equipment; and (2) I keep detailed computerized records of every expenditure.

The boat was, indeed, in fantastic condition...possibly the best older C22 afloat. My database tells me that in the 10 years I owner her the total cost, including initial purchase, was $10,960.19.

So.... depending on what you choose to count, I either "made $2,000" on the sale, or lost $5,960.19 (or, approximately twice the purchase price).

Bill


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## bbistis (Apr 2, 2000)

Let's face it, boats are not investments, they're toys... some bigger and more expensive than others. Sails cost a fortune (espesially if you race, and there are always things to replace/add/improve. No one in their right mind should ever expect to get their money back... just the equivilent of pure enjoyment!


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## MikeinLA (Jul 25, 2006)

"wouldn’t be nice if one could justify the purchase of new capable sailing vessel in the 38 to 42 vicinity"

I can justify it in four little words.....You could die tomorrow.

Mike

Of course if you survive, you're screwed ;-)


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## eryka (Mar 16, 2006)

*Thanx! I needed this!*



MikeinLA said:


> "wouldn't be nice if one could justify the purchase of new capable sailing vessel in the 38 to 42 vicinity"
> 
> I can justify it in four little words.....You could die tomorrow.


Well stated!


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## sanctuarysam (Sep 16, 2006)

So.... depending on what you choose to count, I either "made $2,000" on the sale, or lost $5,960.19 (or, approximately twice the purchase price).

Bill, you neglected the "how much fun did i have owning and sailing that boat" part of the equation..properly added, i'll bet you came out on top.

just my .02 added (adjusted for inflation).


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## btrayfors (Aug 25, 2006)

sam,

You're absolutely right. I LOVED that little boat. Shared it with one of my sons and we all had a blast.

That, of course, is true of most boats. You can't look at them in terms of a good economic investment (counting dollars and cents only). You have to factor in the pain and pleasure quotients, too!

Bill


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## TSOJOURNER (Dec 16, 1999)

*Boat as an investment*

It is an investment in a lifestyle only. If you look at it as an incoming producing asset with capital gains potential you won't enjoy it. My view is that you buy the boat or give the money to doctors and shrinks.


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## ehmanta (Sep 12, 2006)

One should never look at a sailboat as an investment; otherwise, you would talk yourself out of it. One should think of it as an alternate way of vacationing. You could spend over $1000/wk for a beach house or $1400/wk skiing or buy a boat and take your vacations on it spending the money for its cost. I have an older Tartan 37 that I bought eleven years ago that I could sell for more than I paid for it, but not what I have in it, especially the sweat.


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## TrueBlue (Oct 11, 2004)

ehmanta said:


> One should never look at a sailboat as an investment; otherwise, you would talk yourself out of it. One should think of it as an alternate way of vacationing.


Excellent point, and has always been our justification for throwing obscene amounts of money at our boat; coupled with the fact that it's market value has actually risen, or at the very least held.

However, since buying this boat in '04, we found ourselves taking fewer expensive vacations than before. We're 2 years overdue for the two weeks in the Caribbean I booked for this winter.


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## ehmanta (Sep 12, 2006)

Good point as well, I guess its all about priorities and affordability, obviously a personal choice where to spend your money. Bottom line: We are only on this earth for a certain amount of time and we'll only make a certain amount of money, I'd rather be sailing!!!!


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## sanctuarysam (Sep 16, 2006)

My view is that you buy the boat or give the money to doctors and shrinks.

i think most of the sailing community would agree with that thought process. sailing at night under a blanket of stars, the sound of water lapping against the hull as you glide along, well, i can't imagine anything as comforting or uplifting. just the thought of it reduces the stress in my life.


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## TSOJOURNER (Dec 16, 1999)

I have made money on the last two boats I have owned and I expect to make money on my current boat. However, you have to take into account market conditions. Right now, selling a boat is ugly! It's definitely a buyers market. So remember that when you go to make a purchase. 
On my last boat, a Hunter 37Cutter, I paid $30K and bought it from an Estate Sale. I looked at literally dozens of boats before stealing this one. I then "invested" approximately $15K into the boat in upgrades, sails, electronics, etc. (I installed everything myself and saved thousands). I sold it for $60k after sailing it for three years. 
Now, here is the flip, the poor guy who bought it from me has it on the market for $35K less than two years later and cannot give the boat away. The boat still looks fantastic..it's just two years older and it is now a terrible market for selling. 
So when you buy in a soft market, the principal which applies to cars also applies to boats. Certain cars and motorcycles hold their values, i.e., Mercedes, Jeep Grand Wagoneers, BMW. 
With boats, think Hinckley, Island Packet, Bristol.... But even now, a 1975 Hinckley 40 Yawl is fetching far less than it was two years ago.


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## MoontideC30 (Jun 1, 2006)

I purchased an older 30 ft boat with a sound design in need of work for almost nothing. I have spent a lot of hours on upgrades and maintenance along with the "stuff" required to make this happen. She is now a very capable boat. I could sell the boat for what I have into it. 

The only real loss here are the slip fees! 

Could some creative sole please come up with a way to eliminate slip fees!


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## sanctuarysam (Sep 16, 2006)

Could some creative sole please come up with a way to eliminate slip fees!

hey moontide,
buy a marina, and dock your boat there for free..
see how easy the solution is..<G>


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## poopdeckpappy (Jul 25, 2006)

Slip fees I don't mind, it's the freak'n waiting list that burns my a$$ 15-20yrs for 36' and above slips

oh and slips are non-transferable in DP


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## TSOJOURNER (Dec 16, 1999)

*Sure you can money on a boat*

My wife and I have owned 15 boats in our lives. We only lost money on one: a CT34 cutter.

In every other case we have made money. The key is to buy low, sell high. The usual way of making money.

You must be willing to work hard, though. Each boat we've owned was bought after we found her lying unloved and uncared for. We've always been careful to study her actual state of construction, not just the cosmetics. You can always fix a tired old boat if you are willing to roll up your sleeves and dig in.

If there are fundamental flaws like large holes in the hull, or the hull-deck join being ripped asunder, stay clear.


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## sailaway21 (Sep 4, 2006)

*Boat Investments?*

Surfesq seems to have gotten most it just right. Although I don't find that my Benz held it's value any better than my Ford truck. Investments are made in cars you never drive, and do not have to sell. The biggest joke is when somebody tells you their boat, car, house, etc...is worth X amount of dollars. It's not worth what the "book" or anybody else says it is; it's worth what you've got in your hand after somebody actually buys it. A Porshe bought during a booming economy will command far less than normal two years later when the stock brokers are jumping out of windows. If you buy an investment grade vehicle you never drive it so that the garbage man, running a red light, can't "depreciate" your investment for you. For this crowd, I'd say that rules out boats as an investment.
There probably is no real making of money in boats, but knowing what you're looking at, willingness to invest sweat equity, and an INTENSE enjoyment of sailing is the way to get "rich". And, if well bought, well maintained you just might get what you paid for it.
To make money on anything, you've got to be willing to sell it two weeks after you bought it (somebody makes you a great offer) and you can never get in a position where you have to sell.
Me? I believe you sail it like you stole it, and if I get T-boned by a Peterbilt hauling it home next month-well it was sure a blast.
I'd be looking in a depressed economy, sort of like Michigan, where there is a decent income base, and supply of boats, but everybody is worried about their job and counting expenses. That might be where those boats that never go out have suddenly become an un-necessary liability.


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## tdw (Oct 2, 2006)

I've owned five boats in my adult life and my total loss on sale of the first four is less than $15.000 over thirty odd years. Right now I'm up a bit if I were to sell number five. Sounds good doesn't it ? Load of claptrap in fact, cos I would have sunk at least $75.000 into rebuilding a couple of them plus mooring fees, maintenance blah blahde blah blah blah. Ya vanna make money out of boats ? Open an offshore casino. Honestly, what is the world coming to. YOU GO SAILING TO ENJOY YOURSELF, TO GET WET, TO GET COLD, TO GET SEASICK MAYBE EVEN GET LAID IN THE COCKPIT UNDER A FULL MOON BUT YOU DON'T DO IT TO MAKE MONEY !! Sheesh. Imagine if boats were like bleeding real estate. AHHHHHHHHHHHHHHHHHHHHHHH !! Please God not that. There are already way to many tossers out there as it is, if they could make money from it the oceans would be inundated with even more bloody lawyers spivs and property developers. (Sorry it's been a hard day !)
tdw


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## TSOJOURNER (Dec 16, 1999)

Well said.


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## rockDAWG (Sep 6, 2006)

tdw said:


> MAYBE EVEN GET LAID IN THE COCKPIT UNDER A FULL MOON BUT YOU DON'T DO IT TO MAKE MONEY !!
> tdw


Ahhhhh....... now you're talking.


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## sailingdog (Mar 19, 2006)

Honestly, if you're buying a boat as an investment, you're probably wasting your money and time. Buy a boat to sail it...and enjoy the time you spend on it. If you make money when it is time to sell...that's a bonus...but it shouldn't be the end goal. Life is too short to be focussed on just making a buck.


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## TSOJOURNER (Dec 16, 1999)

*Boat Price vs. Summer Share*

I purchased a 1965 columbia 29 with lots of stuff but needing a good coat of pain on the inside and top. I paid 5k, another 2k for a mooring and mooring permit.

The coast of a summer share for a small studio in PTown will run 7-10k. Or 10K for a month of Aug. So I lived on the boat for the summer, best views and cool breezes and the cool factor. I manage a weekly codo unit in the off season, low pay, free rent but in the summer I have to vacate... now instead of traveling in the summer I have a place to live. So it's a great investment for me.

I used to own a 6 bedroom house with a pool and large yard. The up keep of that property was enormous compared to what my little 29 costs to upkeep. The boat will cost me about 2k a year for general maintence, mooring fees, and winter storage. Now the refits, decoration, and customization, tech hardware upgrade, wind vane steering -- not adding that up and will never get it back.

The money I save in the summer and winter can go into other investments instead of the US realestate that seems to be taking a dive.

Matthew Name


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## sailingdog (Mar 19, 2006)

And you get to sail her during the sailing season.... not a bad deal all around.


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## TSOJOURNER (Dec 16, 1999)

*Boat vs. House*

Hello all, I'm new to this forum but looking forward to reading all everyone has to say. I'm considering living aboard and will have lots of questions that I hope you'll all help with the best you can. I'll chime in with my two cents occasionally when I can help others. 
It's probably fair to say that a boat is a depreciating asset while a house is more likely to appreciate. However I've been looking around trying to find someone who knows enough about boats and enough about accounting and/or tax law to help me figure something out. If I were to live aboard, using the boat as primary residence, then mortgage interest should be tax deductible just as on a house. After all a boat can qualify for mortgage interest deduction as a second home (if it has a galley and head) so it should qualify as primary as well. 
Given all that, can someone help me with some sort of formula or figures to use in calculating depreciation against the savings via the interest deduction? I'm sure I won't come out ahead but it would be comforting to be able to project the costs vs. savings in such a scenario. The tax savings should offset some of the depreciation, I'd think, but I don't know how to figure out how much. 
A new car will lose 20% or more of it's value as soon as you take posession. Is there a similar figure for boats? Any help would be appreciated. 
Thank you all,
Tom


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## CBinRI (May 17, 2004)

TomPCT said:


> Hello all, I'm new to this forum but looking forward to reading all everyone has to say. I'm considering living aboard and will have lots of questions that I hope you'll all help with the best you can. I'll chime in with my two cents occasionally when I can help others.
> It's probably fair to say that a boat is a depreciating asset while a house is more likely to appreciate. However I've been looking around trying to find someone who knows enough about boats and enough about accounting and/or tax law to help me figure something out. If I were to live aboard, using the boat as primary residence, then mortgage interest should be tax deductible just as on a house. After all a boat can qualify for mortgage interest deduction as a second home (if it has a galley and head) so it should qualify as primary as well.
> Given all that, can someone help me with some sort of formula or figures to use in calculating depreciation against the savings via the interest deduction? I'm sure I won't come out ahead but it would be comforting to be able to project the costs vs. savings in such a scenario. The tax savings should offset some of the depreciation, I'd think, but I don't know how to figure out how much.
> A new car will lose 20% or more of it's value as soon as you take posession. Is there a similar figure for boats? Any help would be appreciated.
> ...


My understanding is that you do not have to live aboard nor does the boat have to be your primary residence to get the tax deduction. I would check with your accountant. Boat loan specialists also tend to be experts on this point, although not unbiased.

I have just read this thread for the first time and recalled that I was warned on buying my first boat that "owning a boat is like standing in a cold shower ripping up hundred dollar bills." No regrets, however.


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## cardiacpaul (Jun 20, 2006)

Wander into your favorite financial planner du jour and tell them you'd like to buy a boat as an investment. 

As they sit quietly figuring out how much time they're going to charge you for the analysis, how much their ladyfriends christmas present is going to set you back, wondering if those new calloways are on sale yet.... refiguring what they're going to charge you...

I've never "made" a thin dime on any boat I've bought, owned, sailed, stole, or borrowed. Well, I might have, but the point is, I don't count money as profit and loss. "A boat is designed to hold the water out, hold the heat in, and loosen the hold on your wallet."

The smiles, the laughs, the wind in whats left of your hair...the time spent aboard.... Priceless. Every moment. Priceless.
Now, shut up, find a kid or a girl and take them sailing. 

Theres a reason the Coast Guard calls them "recreational" isn't there? 

I need a nap.


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## camaraderie (May 22, 2002)

You can certainly deduct boat mortgage interest on your fed taxes with no requirement any more that you live aboard. I don't think you can deduct depreciation on a boat unless you have it in charter as a pure business venture...same as renting your house out.


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## Goodnewsboy (Nov 4, 2006)

If you spend too much, the boat owns you.
Keep it clean, safe, and seaworthy. Comfortable is nice.
Use it any way you can to make happy memories for yourself and family; those are the only dividends that matter.
Sell when you can no longer achieve that end.


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## sailingdog (Mar 19, 2006)

Again....anyone looking to buy a working sailboat as an investment is a fool. The return on investment provided by a sailboat is the voyages taken, the passages made, the anchorages visited... A sailboat also returns the investment in the time spent with friends and family.... the skills learned, the feel of the spray during a long downwind run... etc.


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## xymotic (Mar 4, 2005)

*Depends on location*

You can buy a nice boat for 60 grand, and get a slip for 400-600 a month.

Then compare what a 500 square foot 1 bdr condo costs in sausilito San Diego or Los Angeles.

So, while it may not be an investment, it can be a cheaper way to live than other options in certain areas. At least, this is my theory, I'm doing this in Marina Del Rey as we speak so I'll let you know if it works out


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## RichmondVI (Nov 22, 2006)

After reading through this thread there are some interesting points which are brought up as you balance (1) how you spend your "fun' money (2) the cost of living rent etc... in certain areas and (3) the tax deduction angle. 

If you start looking at living in St. Thomas and maybe living in similiar climates (mainly ones where you can go out all year and never see snow) where the cost of living is extremely high. If a clean studio apt. cost about $1100-$1200 per month everything included (water, electric, etc..) and a yearly mooring fee costs around $200 per year you can see some savings. Also, the price of a home is no less than $300,000 for something you can move right into an start to fix up. I understand there is penty of expense (even more in the VI than US mainland) and issues associated with living aboard out on a mooring (power, fresh water, etc..) however there is quite a bit of maintance money and money to be put into solving those problems if you are saving $13,000 a year in rent. Just some thoughts I had on this subject as it isn't a finacially crazy here as it is else where. Especially when you can cruise th VI on the weekends.

Just don't bring up the hurricanes!!

Cheers
Rich


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## RichmondVI (Nov 22, 2006)

xymotic,
weird we posted basically the same idea at the same time.

Rich


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## RichmondVI (Nov 22, 2006)

xymotic,
weird we posted basically the same idea at the same time.

Rich


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## TrueBlue (Oct 11, 2004)

Hey Cam, spam cleanup in aisle 5


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## camaraderie (May 22, 2002)

Done...thanks true blue!


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## TSOJOURNER (Dec 16, 1999)

I think owning a boat is about dreams! We all dream about the perfect sailing day, winning a big race or just leaving the rat race. I even just dream about sleeping on my boat. That is why we spend money on boats. Most of us never plan on making money off our boats. I just want a way to pay for my habit.


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## lhunt (Oct 23, 2000)

*Small to start*

also, seeing as your a land lubber, you may want to try kicking around in a little 20 foot day sailer first, as many sailors have found, the more systems and the more size a boat has, the more the worry, and the less the time on the water. and if you blow $2,000 on a well found 20 foot sloop, you will most likley get most of it back when you resell it
****

this is a great idea as there are many 20 to 24' boats that can be used for a basic overnight trip to see if you like the idea. if you have a wife she may not be interested but you can see if you like the fun and limitations of overnight trips. just don't expect to find much luxury in the little one.

i am looking at an O'Day 27 in north Carolina for a skoot down to Florida. she is big enough but still pretty basic for living in for a few months. you can try it out for a lot less than $200K and have some great stories to share without the HUGE expenses and commitment.

Happy Dreaming Lee


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## Goodnewsboy (Nov 4, 2006)

lhunt makes a good point.

Here's to small, uncomplicated boats. The best sailboat I ever owned was a 15' 9" Cape Cod Bullseye. It could be gotten underway in about three minutes, had a 3hp outboard that could be removed and stowed under the foredeck, was as capable as most 30 footers, had great stability (750# lead keel) and was capable of floating and sailing even when flooded.

I often took that little boat across the Chesapeake at night without the slightest problem and was able to put her up in her slip in the same three minutes.


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## sahara (Dec 15, 2006)

A boat is like a wife, you don't commit because she's a good deal, you commit because you just plain love her. Buy a boat you love, then you will be motivated to take wonderful care of her, and she will hold her value. There is nothing sadder than a neglected boat.

Life is too short to own an ugly boat.

My $0.02, feel free to ignore.


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## FormerAdministrator (Jan 10, 2000)

BOAT = Break Out Another Thousand


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## FormerAdministrator (Jan 10, 2000)

ps: speaking of spam - I tightened up the rules a little bit today on the "spam detector". 

I hope it helps...


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## sailingdog (Mar 19, 2006)

Thanks Jeff... time will tell.


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## TSOJOURNER (Dec 16, 1999)

Are you a moron?


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## TSOJOURNER (Dec 16, 1999)

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## sailingdog (Mar 19, 2006)

Apparently, the new spam filtering isn't working all that well.


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## TSOJOURNER (Dec 16, 1999)

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## TSOJOURNER (Dec 16, 1999)

> A boat is like a wife, you don't commit because she's a good deal, you commit because you just plain love her. Buy a boat you love, then you will be motivated to take wonderful care of her, and she will hold her value. There is nothing sadder than a neglected boat.
> 
> Life is too short to own an ugly boat.


 And _way_ too short to marry an ugly wife !!


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## TSOJOURNER (Dec 16, 1999)

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## wind_magic (Jun 6, 2006)

[deleted by author]


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## wind_magic (Jun 6, 2006)

Sailormann said:


> And _way_ too short to marry an ugly wife !!


No doubt about that.


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## TSOJOURNER (Dec 16, 1999)

bmellis said:


> My wife and I have owned 15 boats in our lives. We only lost money on one: a CT34 cutter.
> 
> In every other case we have made money. The key is to buy low, sell high. The usual way of making money.
> 
> ...


I have a friend who has a philosophy about "working capital" for cars, boats, lawn tractors and other items. He is always looking and always selling. He only buys when it is a really good deal and sells at a fair but inflexible price. He puts a lot of time in this, but he enjoys it and the wheeling and dealing is as much a hobby to him as the boating is. But he is only doing trailerable boats and lives on a road with a fair amount of traffic and isn't in a neighborhood (no covenants) so he can have cars and boats parked near the road with signs on them all the time. Besides always having a car and a boat to use that is paid for all the time, he has a small side income to cover occassional maintenance and then some.


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