Concerned about purchasing older boat

[melissar]

We are still new to our search for the "perfect for us" boat. While we are drawn to many of the older (mid-70s to mid-80s) Grand Banks and other classic-style trawlers, I am concerned about the potential for resale. Someone mentioned to me today that we need to know what our exit strategy is, should we decide we want a different boat, have significant life changes, or just want to move on. These boats aren't financeable in most circumstances due to age, and yet some of them are still command a significant amount of money. Our pool of potential buyers would be limited, I would think, if banks won't lend on them. Thoughts?

 

[toocoys]

We are still new to our search for the "perfect for us" boat. While we are drawn to many of the older (mid-70s to mid-80s) Grand Banks and other classic-style trawlers, I am concerned about the potential for resale. Someone mentioned to me today that we need to know what our exit strategy is, should we decide we want a different boat, have significant life changes, or just want to move on. These boats aren't financeable in most circumstances due to age, and yet some of them are still command a significant amount of money. Our pool of potential buyers would be limited, I would think, if banks won't lend on them. Thoughts?

Your fears are irrational. Anything is finaceable. People buy and sell these boats on a daily basis. There's plenty of lenders who lend on boats of all ages.

 

[boomerang]

If you're buying a boat as in investment, I suppose you would want an exit strategy. I'm going to have to assume that most people look at a boat as a luxury and therefore not really to concerned with the marketability of it in the future.
I was at a marina today & saw a beautiful Hatteras 46 convertible I'd never seen before. It was a late 70's -early 80's vintage but still in immaculate condition. The marina owner told me the new owner just bought it for 25k! I'm willing to bet the previous owner was just glad that it was sold & to be out of the slip rent ,insurance, maintenance etc. Was it a good purchase as an investment? Heck no, but I'm sure the previous owner enjoyed the time spent on it and that they didn't buy it worrying about the price it would bring when it was time to sell it.

 

[Mr. Blu]

If you're buying a boat as in investment, I suppose you would want an exit strategy. I'm going to have to assume that most people look at a boat as a luxury and therefore not really to concerned with the marketability of it in the future.
I was at a marina today & saw a beautiful Hatteras 46 convertible I'd never seen before. It was a late 70's -early 80's vintage but still in immaculate condition. The marina owner told me the new owner just bought it for 25k! I'm willing to bet the previous owner was just glad that it was sold & to be out of the slip rent ,insurance, maintenance etc. Was it a good purchase as an investment? Heck no, but I'm sure the previous owner enjoyed the time spent on it and that they didn't buy it worrying about the price it would bring when it was time to sell it.

All hobbies cost money and buying an old boat as investment is not a good idea I think. A boat is like a black hole where your money in disapears. [emoji3] [emoji3]

 

[O C Diver]

There shouldn't be a problem selling an old boat that is well maintained and and has upgrades every so often. A friend was looking at a very nice clean mid 80s Jefferson for $75K. It lasted 3 weeks on the market. Good clean boats priced right will sell.

Ted

 

[FF]

A boat is a "wasting asset" not an investment , although a few folks have made money at resale time.

In dirt houses location is king

In boats condition is paramount.

"Paint sells the boat"

 

[psneeld]

Boating is constantly changing with styles, models, engine types, etc...etc falling out of favor as they prove their worth (or not) through the ages and as generations of boaters change.

Sure a few boats in every category remain favorites and clean ones will be desirable in the foreseeable future.....

But the reality is, every year, boat yards become more and more clogged with used boats that just arent selling at any price. They can hardly get rid of them at junk prices because of the leftover debris.

I bought my boat as a throw away. Thinking, 15 years on top of the hard 25 the first 2 owners put on her and the changing face of boat ownership.....I would keep initial price, upgrades, maintenance, and disposal costs to a point that it was still close to owning a small inexpensive house or even renting over those 15 years.

The plan is working so far.... living aboard is also part of that plan as well as an annual trip to Florida for 4 to 7 months.

 

[saltyatsixty]

If you're buying a boat as in investment, I suppose you would want an exit strategy. I'm going to have to assume that most people look at a boat as a luxury and therefore not really to concerned with the marketability of it in the future.
I was at a marina today & saw a beautiful Hatteras 46 convertible I'd never seen before. It was a late 70's -early 80's vintage but still in immaculate condition. The marina owner told me the new owner just bought it for 25k! I'm willing to bet the previous owner was just glad that it was sold & to be out of the slip rent ,insurance, maintenance etc. Was it a good purchase as an investment? Heck no, but I'm sure the previous owner enjoyed the time spent on it and that they didn't buy it worrying about the price it would bring when it was time to sell it.

I agree. We have a 1978 42 Litton (Universal) trawler we have owned for 15 years. We have enjoyed many hours of cruising the north gulf coast and are now living aboard for a while. I would not expect to be able to sell this girl for a third of what we paid for her but she’s given us a iifetime of enjoyment! Just do it!!

 

[cardude01]

Boat exit strategy: lose money.

I used to obsess about this, until the wise souls here pointed out that I need to just enjoy the boat and stop acting like I was a making a rational monetary decision with this boat. [emoji23]

 

[melissar]

Thanks for your thoughts! I will be brief, heading out this morning for a few days, but wanted to respond so you didn't think I'd left the thread. We're not looking at this as an investment -- maybe it was my use of the term "exit strategy" that muddied the waters here. Yes, boat are indeed holes in the water into which you sink money. Lots of money. However, being smart with money and understanding that life changes and there could come a time when we can't or don't want to keep a boat is hardly irrational. It's realistic and I would like to think that we are making a decision with our heads as well as our hearts. I've seen too many boats rotting at the dock over the years to not understand the reality of ownership for many people and should times change for us, it would be good to know that someone else could come along and have the means to enjoy what we have. We have a 125 year old home that we've poured money and a tremendous amount of sweat equity into for the last 18 years. Will we get that money out? Maybe so, maybe not. Would we do it again? Of course, she's a grand old girl. Financing a mid-70s boat? We've considered saving our cash and financing, and have yet to find a boat loan for anything that old. Maybe we are looking in the wrong places or my perception is wrong? So I'm just thinking that when/if it comes time to sell, there would be others in that same situation. It never hurts to look ahead and understand the possible scenarios, in my opinion.

 

[RT Firefly]

Greetings,
Mr. m. Even if you buy a brand new boat you will most probably lose money when selling. As mentioned, a boat is not an investment. Older boat=lower initial $$ and subsequent lower depreciation. I suspect it is likely, no matter what vessel you eventually buy, you will invest either time or $$ into it to make it "yours". The only way you will possibly minimize any losses is to keep her in good repair. If things change in your life, a well maintained boat will be easier to sell for a more attractive price.

 

[Mrwesson]

older boats have shed most of their depreciation.

Like old houses the systems may be failing or it may be in great shape. A boat that needs tons of work will nickle and dime you.

I had no problem financing my 1978.

You can lose money but doesn't mean you will. I think most people are talking about factoring in storage fees, upkeep, repairs, etc but you can't really factor that into the purchase price of the boat.

Boat's can surely be an investment but large boats like trawlers? Not in my opinion. I've flipped quite a few with sweat labor(fiberglass work and paint). Larger boats are harder to sell because the market isn't as large.

I've got my money back or made money on every boat i've owned(11 older boats).

 

[Heron]

Boats can be a questionable investment, especially if you're considering an exit strategy. Buy a quality boat at a reasonable price, put the right amount of money into it and enjoy. My last Bristol 35.5, bought for $65K sold 4 years later for $88k, though admittedly I put 18K into it. Still, considering the enjoyment and use it was a good move. My current Cape Dory I bought for the price of a mid range Pick-up truck. I've put a modest amount into it, but know I could get my initial investment back. Good brands with enthusiastic followers will insulate you from some of the re-sale uncertainties..

 

[FlyWright]

I purchased a 1977 boat 11 years ago. It was an investment in my lifestyle that has paid me back in spades. If it sold today, I'd probably lose $20,000 from the purchase price plus the money I've spent in maintaining, insuring, storing and operating the boat. I wouldn't bat an eye at that. That's one great value, IMO.

If it sunk tomorrow (and I survived), I'd feel terrible for the loss of lifestyle but not for the loss of $$.

Chase your dream. You can't take it with you.

 

[Martin J]

After 45 years in the marine industry, I have owned lots of boats some by choice some by circumstance. Occasionally recovered my costs, and with luck made a small profit.
However one cannot quantify the warm smiles you have as the sun goes down in a quite bay, the warmth of the people you have on board and the intense enjoyment you have when your on board. We all have good, bad and indifferent times on board, however she's your best friend, you put your life in her hands numerous times.
Life is not a practice run, it's a one shot deal. You cannot rewind the clock when it goes wrong. Remember "Carpe Diem"

 

[Simi 60]

If you're buying a boat as in investment

Please demonstrate how that works

 

[Ken E.]

Further to Martin's comments, the real value of owning a boat, old or new, is the experiences it will provide you. If the criteria for buying is that you be made whole when you sell, odds are you will come up short, maybe way short, if you are like me. But the experiences my boats have provided can't be denominated in dollars....they are far beyond fair market value.

 

[koliver]

In 1976 I bought my first cruising sailboat for $16000 (plus sales tax of $1920). $20000 by the time I was sailing it in 1977 (add $4000). Sold it in a 3 way trade in 1988 for $25000, bought my second cruising sail in the same trade for $70000, (another $50000, plus sales tax of $8400) sold it in 1995 for $70000 less 10% commission, add $7000). bought my present trawler in 1994 for $135000 (add $65000 plus sales tax of $16200). Had a survey last week, the surveyor had a few criticisms so dropped its estimated value from $165 (last survey in 2011) to $150000.
I have been keeping an eye on the market and agree with his estimate of value.
Over the same time, 42 yrs, the value of my $ has dropped to about 1/10 of what it was.
If I had the original $16000 invested, very conservatively, so as to only keep up with inflation, I would still have more than the present value of my boat, without having spent the extra
$152520, spent on just ownership.
Over the same 42 yrs, I have maintained, improved and moored my boat, joined a Yacht Club with initiation fees and monthly dues.
Check with me in another 10 years, I will probably still have the same boat, and won't have learned a thing about investments.

 

[boomerang]

Please demonstrate how that works

I really don't know what point you're trying to make.

 

[toocoys]

Maybe we are looking in the wrong places or my perception is wrong? .

I could be wrong, but Essex Credit will finance and older used boat as long as it can pass a survey. You pay anywhere from .25-1% higher in interest because of age, but its possible to do.

 

[toocoys]

Please demonstrate how that works

I really don't know what point you're trying to make.

I think Simi is asking how a boat could actually be an investment, since they usually aren't.

The only way that I could see a boat being a true "investment" is if you bought a cheap, run down hull and "flipped" it. In other words, restored it for the sole intent of selling it for more than you "invested" in repairing it.

And that would only work with an older boat, since boats and RV's are the two fastest depreciating items one can buy. There is a 100% chance you'll ALWAYS loose money buying a new boat.

 

[Simi 60]

I really don't know what point you're trying to make.

That boats are not an investment.
They very very rarely go up in value or provide yield over holding costs

 

[Simi 60]

All hobbies cost money and buying an old boat as investment is not a good idea I think. A boat is like a black hole where your money in disapears. [emoji3] [emoji3]

It can be negated somewhat or even considerably.
For example,
Buy a heavily discounted boat for a lot less than a median house price, no rates or utilities to pay.
Live on the boat at anchor so no mooring fees.

If you own your dirt dwelling, rent it out and essentially enjoy the boat for free.

 

[dhmeissner]

After 45 years in the marine industry, I have owned lots of boats some by choice some by circumstance. Occasionally recovered my costs, and with luck made a small profit.
However one cannot quantify the warm smiles you have as the sun goes down in a quite bay, the warmth of the people you have on board and the intense enjoyment you have when your on board. We all have good, bad and indifferent times on board, however she's your best friend, you put your life in her hands numerous times.
Life is not a practice run, it's a one shot deal. You cannot rewind the clock when it goes wrong. Remember "Carpe Diem"

 

[Mako]

However one cannot quantify the warm smiles you have as the sun goes down in a quite bay, the warmth of the people you have on board and the intense enjoyment you have when your on board.

In most cases boats are a fantastic investment. What the business-oriented people need to be reminded of is that your "return on investment" does not have to be in dollars.

 

[psneeld]

Most boaters dont own one boat for life, often it is a progression and not thinking "exit strategy" can affect a lifetime of boating in possibilities.

Should it ever make you unhappy? Well, that kinda depends on the person.....

 

[melissar]

I feel this has gotten a bit off topic...we not looking at a boat as an investment, so please don't keep insisting that is what I am asking. Respectfully, we understand the lifestyle, the pleasure, the carpe diem, etc etc etc. What I wanted to know was if an older, quite possibly unfinanceable boat would become unsellable should we need to sell. We could focus our search on "newer" (mid-80s+) boats if necessary. It sounds like the common sense answer is if you buy right and have maintained well, someone will eventually come along that wants to buy -- should we ever need or want to sell. Seemed a prudent question to me. I spent too many years walking home to the end of the dock past dozens of boats slowly sinking into the water to not see where so many people's dreams end up. It's always a sad sight. Thanks everyone for your input!

 

[psneeld]

I dont think just because a vessel is well maintained and clean it means you will be able to sell it quickly...some variables there.

And I have seen this become more and more of an issue.

Thats why I consider mine a Throwaway and not necessarily even a Giveaway.....yet time changes many things.

At some point, an engine replacent can become a show stopper for dumping more money into her and thus killing a sale.

Even without a major failure...I wouldnt be too sure of the future of many 30 plus year old boats.

If the main word to concentrate on is eventually.... then best to have the ability to tightly control costs until that eventuality.

 

[friz]

I could be wrong, but Essex Credit will finance and older used boat as long as it can pass a survey. You pay anywhere from .25-1% higher in interest because of age, but its possible to do.

Geico insures my "71 with survey.

 

[caltexflanc]

Geico insures my "71 with survey.

But the question at hand is, do they finance it too?