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Old 14-05-2019, 08:07   #1
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How much to pay for someone else's improvements?

An unrelated cruisers forum got me thinking. A member had a Cal 46 sailboat for sale for $250,000. He got pounded for it as a number of us noticed that the average asking price for the eleven other Cal 46 was $70,000. His listing said he'd put $500k in a total refit. So, he is really only asking to get about 40% on the dollar what he put in to it. Years ago I did a similar thing. I bought a Kettenberg 38 for $18k, totally refitted it for $75k and after sitting on the market for a year or so ended up selling it for $18k. My son is looking for his first offshore boat. I've suggested he look for an older boat that has a relatively high asking price. Perhaps it's been repowered, rerigged, or rewired. Now if he had the time and desire I'd probably suggest he get a fixer upper, but he wants to go sailing and buying used is his only economic option. In the housing world there are lots of studies as to what improvements get what kind of return. Is there such thing for boats? What do you think are the best ROI improvements, or perhaps of more interest to my son, the worst ROI - let someone else fix it first.
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Old 14-05-2019, 08:27   #2
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Re: How much to pay for someone else's improvements?

When your the buyer, You know what sort of boat you want, You have the cash in your pocket,
Then its just a matter of getting the cheapest boat you like with the most goodies on it already, In the best condition,
All the bells and whistles added already, All repairs and refits already completed,.

You not the seller, So who cares what they will lose by selling their boat to you for the price your offering,

As you stated, You sold your boat for 18 K after sinking 75 grand into it.
The buyer would have been very pleased with that, All those lovely improvements for 18 K,
Thats a very good way of buying a cheap boat,
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Old 14-05-2019, 10:53   #3
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Re: How much to pay for someone else's improvements?

Yes, the whole "I've sunk so many boat bucks into her" is whistling into the wind,

as is the idea of a "market value",

bottom line is what a buyer is willing to pay, in **that** location at **that** time, and how long the seller is willing to hold onto the boat waiting for that willing buyer.

It's a buyer's market 98.5% of the time these days, so most owners know refit/upgrade money is consumption spending, likely to only get a tiny percentage of it back if any when it comes time to sell.

Of course as the buyer, if the maintenance / upfitting turns out to be exactly what you'd have done anyway,

a diligent survey checks out and the excellent condition will save months / years of work get you out on the water, then

that's worth a **lot**

but maybe only to you, so don't let on to the seller 8-)
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Old 14-05-2019, 12:24   #4
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Re: How much to pay for someone else's improvements?

I recently flew to Croatia to look at a boat. The current owner purchased it three years prior. It was a classic case of thinking money spent after purchase increases the value of the boat.

She wanted more than what she paid for the boat 3 years ago. The logic was :

"We've replaced the 13-year-old rigging, the old radar, the canvas, the old wind gen, and we've added a bow thruster"

I was unable to convey that 40 K spent is just the cost of doing business. I don't think brokers help the cause either.

i made a very solid offer, based on condition and location. I agree with John,m this thought of market value is nonsense. its about condition and location and for me, the location and the cost of getting the boat from its current location added cost to the purchase.

6 months later it's still sitting on the hard.

It amazes me as if they had taken the offer they would now be ahead of the game with what storage, insurance, and gaurdinage has cost.



I've got more money than I'll ever admit into my current boat; I know it's worth less than what I bought it for; it has served a purpose, provided a lot so enjoyment and been a good education and as a friend of mine said a good education is very expensive

Id look for a boat that was seaworthy where the price reflected that it has systems and equipment that was towards the end of the life cycle. Replacing these things on a boat yourself is invaluable to knowledge and competency.

I would rather buy a boat that needed a new engine, new rig, and new sails and be able to install and set up how I want it than to buy a boat that an owner has invested money into with the hope of selling it for a better price.

It's akin to doing up your kitchen to sell your home, you'll never get the money out of it. An owner doing things to fix up a boat to sell will likely do it in a way to be as cost-conscious as the possibly can. That could cost you as the new owner a lot of cash in the future.
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Old 14-05-2019, 14:51   #5
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Re: How much to pay for someone else's improvements?

Too bad didn't get that level of information before spending lots of money on travel.

Really not your business, should not care about her "reasons", nor should she care about yours.

Make your offer, give her a time limit, and walk, no bluffing.

Six months later maybe she'll be more amenable.

Don't pay more than **you** think it's worth, and keep looking in the meantime.
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Old 14-05-2019, 14:55   #6
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Re: How much to pay for someone else's improvements?

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It's akin to doing up your kitchen to sell your home, you'll never get the money out of it.
Actually in a good location, hot market, **real estate** will often return redecorating, bathroom / kitchen refurb many times over.

Sometimes pulling the house down makes the property worth a lot more.

Totally different markets, have their own logic.
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Old 14-05-2019, 15:00   #7
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Re: How much to pay for someone else's improvements?

Mine had a marker value of 14.000 and 33.000 9f upgrades (with receipts ), I bought it 4.000 and have spent until now 14.000 total fees (including all cruising fees for the boat )
I got a good opportunity that suited my need and budget but you have to know that A boat is really a hole in the water and berry easy to be totalled, buy cheap and small (don't compromise on safety but who needs gadgets ??).
Anyway doesn't matter what boat you choose if you really cruise you gonna risk and damage the **** out of her so the cheaper the better .
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Old 14-05-2019, 15:08   #8
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Re: How much to pay for someone else's improvements?

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Originally Posted by john61ct View Post
bottom line is what a buyer is willing to pay, in **that** location at **that** time, and how long the seller is willing to hold onto the boat waiting for that willing buyer.

and the older they get the tougher they are to sell .. even if totally refurbished.
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Old 14-05-2019, 15:57   #9
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Re: How much to pay for someone else's improvements?

Boats seldom make economic sense. The guy with the Cal 46 made an economic mistake putting $500k into a 45 year old production boat. Assuming he paid about $80k for the boat there is a lot of competition at $580k. And he is asking $250k which is probably way too much. I'm guessing also, he is not all that in love with the boat anymore anyway. Lamadriver is a bit like me, I'm guessing, is that he is willing to pay for a new engine, rigging etc to get what he wants even though if he decides to sell he probably won't get it all back. I plan on bouncing the last check I ever write.
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Old 14-05-2019, 16:06   #10
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Re: How much to pay for someone else's improvements?

I really don't get the dissing of market value. Market value is what a willing seller and willing buyer would agree to in an arms length transaction.

The money you dump into a boat generally does not increase its sales price, but it does reduce the time on the market.
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Old 14-05-2019, 16:20   #11
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Re: How much to pay for someone else's improvements?

Paul L you raise an interesting point. Fixing up an old boat may not add value, but should make it easier to sell. That would argue my advice to my son is pretty good - that is, let someone else pay for the things that need to be fixed. You might have to act quickly, but you might not pay more.
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Old 14-05-2019, 16:57   #12
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Re: How much to pay for someone else's improvements?

Quote:
Originally Posted by lamadriver View Post
....


It's akin to doing up your kitchen to sell your home, you'll never get the money out of it. An owner doing things to fix up a boat to sell will likely do it in a way to be as cost-conscious as the possibly can. That could cost you as the new owner a lot of cash in the future.
Not the same. I can increase the value of real estate by well chosen renovations. Money dumped into a boat just makes it easier to sell.

Like the OP, I dumped a bunch of money in my previous boat and then sold it for about what I bought if for ($5K more in that case....a fraction of what I spent).

I expect a repeat performance on this boat except that it was nearly new when I bought...so I will lose more.

Inexperienced boat owner often dont get that concept.

My answer to the OPs posted question is pretty close to zero. Though a well outfitted boat in good condition should command a price in the upper range of boats of that make/model.
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Old 14-05-2019, 17:24   #13
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Re: How much to pay for someone else's improvements?

A boat is NEVER an investment. You rarely, if ever, sell it for more than you paid for it, usually less, even if you put lots of improvement into it. it's somewhat analogous, but not completely, like a used car. Your car is worth $10k. You put a new $5k replacement engine into it. Value? Still $10k.
Even on a boat just a few years old, careful maintainence is EVERYTHING. Examine the maintainance logs. If they don't exist, that is a big warning sign the PO didn't care. Ask around to get the best surveyor in the area. Don't ask the broker, ask local boatyard owners about good surveyors. Finally, remember it is never a fully rational decision. Having a boat is pretty close to a love affair. Go with the one that makes your heart sing!
Good luck on buying and selling!
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Old 14-05-2019, 18:25   #14
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Re: How much to pay for someone else's improvements?

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Not the same. I can increase the value of real estate by well chosen renovations. Money dumped into a boat just makes it easier to sell.
I don't think that is quite right. Money dumped into a boat can increase its value. The question is just by how much. If you look at a 1988 xyz 36, some will be listed at $80k and some at $120k. Often the $120k model will sell quicker than the $80k model. A boat in great condition is worth more AND will sell faster if appropriately priced. I think the investments most likely to increase selling price on an older boat are:

- recent repower
- recent (last 2 years) new electronics
- clean, dry, leak free, freshly painted engine and bilges
- newish dinghy and outboard in good condition
- shiny brightwork
- new (last 2 years) sails
- new (last 2 years) standing rigging

None of these will even come close to paying for themselves in selling price, but they will increase the selling price.

The thing I see all the time on listings is something lie "60K refit 10 years ago including a bottom job and new electronics!". 10 years ago is ancient history and counts for nothing. "100k refit 2 years ago" is what will increase the selling price.

"Bottom job 10 years ago" means your boat has a crapload of deferred maintenance because you cannot even get the little things right. In addition, you are too ignorant to even realize it. Yet I see that all the time in listings.
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Old 14-05-2019, 18:44   #15
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Re: How much to pay for someone else's improvements?

It's really expensive to keep a boat at it's current condition. It's stupid expensive to make is substantially better. I've done the latter and don't regret it (much) because I love the boat, enjoyed the refit planning, enjoyed the new stuff, and ultimately like having a nice looking well functioning boat compared to one that is a breeze away from falling apart. In all, my direct expenses to upgrade and repair have amounted to over 50% of what the boat cost 9 years ago but it's a much much better boat now. At least when the boat does sell, I feel comfortable that she won't be simply abused and left to die somewhere in a yard.
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