Building a sailing kitty: tough choices

[GimmeShelter]

Hi all, I hope I'm posting this in the right place.

My husband and I are saving up a "sail away" kitty right now. We hope to sail away on a Catamaran in about 5 years. The total sailing kitty will be 200k, 100k for the boat and upgrades, and 100k to get there and back. Would like to be cruising for 1-2 years depending on how fast the money goes.

My biggest question is the house. I'm not sure if I should be paying off our house so that we can then lease it while we're gone, or if I should focus all of my money into savings. We have a 135k house that is still morgaged at about 100k, so paying it off will add maybe 3 more years to our wait. On the flip side having it paid off would provide an income that could greatly extend our cruising time.

We cannot be the first people to deal with this! I am so worried I will spend years to find out I've done the wrong thing. Any help?

[a64pilot]

Whats the plan when the money runs out? Might be nice to have a house to return to?

[roverhi]

Why don't you rent the house?? With interest rates as low as they are now, would seem likely you could cover the nut with rent payments or pay it down to a level where you could refinance to cover the loan.

Might think about something else besides a catamaran. Don't get much for low 6 figures in the training wheel world. You can get a very nice monohull for way less than you are talking about spending and have plenty of money to outfit it to your taste. The less money you spend on the boat, the quicker you can be out cruising and the more money to stay out cruising. If you decide you love the lifestyle, you can sell the house and move up to a better boat.

[chuckr]

At 100k for 2 years is a lot as we spend about half that.

In the dollars and cents part of this forum you will get lots of ideas on costs to cruise. of course a lot of it depends on where you cruise and if you marina hope or lay on the hook. It also depends on where you go.

5 Years of Cost Data


We have been out 7 years. The first 2+ were on the east coast of the USA and the Bahamas then we went down the Mexican coast all the way to Colombia and then across the Carib to Jamaica and down to Trinidad before going back up and crossing the Atlantic.

You can go through our data for the first couple of years and see with it cost us. There are some upgrades in there as we needed a few things if we were to continue long term long range cruising.

Good luck with it.

[sailorboy1]

If you pay down the house and it doesn't rent out, you don't have cash to cruise. But if you save the cash you have the money to hold you over.


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[GordMay]

Greetings and welcome aboard the CF, GimmeShelter.

[GimmeShelter]

Originally Posted by a64pilot

Whats the plan when the money runs out? Might be nice to have a house to return to?

It would be nice to have a house, if it can pay for itself while we're gone. Otherwise I think we're better off to take the 30k we have invested in it and save it for a down-payment.

[GimmeShelter]

Originally Posted by roverhi

Why don't you rent the house?? With interest rates as low as they are now, would seem likely you could cover the nut with rent payments or pay it down to a level where you could refinance to cover the loan.

Might think about something else besides a catamaran. Don't get much for low 6 figures in the training wheel world. You can get a very nice monohull for way less than you are talking about spending and have plenty of money to outfit it to your taste. The less money you spend on the boat, the quicker you can be out cruising and the more money to stay out cruising. If you decide you love the lifestyle, you can sell the house and move up to a better boat.

We have been sailing monohulls for about 4 years now. We currently have a 34 Oday. I can't seem to get over my fear of heeling though. I've tried everything! Classes, lots of sailing, crewing on a racing team. I just can't imagine living all the time on a tipped over boat. I'm kind of stuck on the dream of a Catamaran at this point.

Our current boat would need a new engine, new electronics, and possibly at least one new sail to go. So that puts us at around 30k on a boat worth 20k. So we would need to buy a boat regardless.

[barnakiel]

This is not the forum to ask this question. You want a CFA or any other type of pro financial adviser to enter your figures into a spreadsheet and give you exact answers. Any well trained banker or a keen student of economy/finance can do the same for you (at half the price).

Go for the option that generates best cash flows from whatever assets you have. You will be solving for best NPV but you may want to match the cash flows too (trying to assure the inflows match the outflows in size and timing).

Given the current condition of real estate market, I would not sell a house unless a real deal crops up.

Cheers,
b.

[a64pilot]

Originally Posted by GimmeShelter

It would be nice to have a house, if it can pay for itself while we're gone. Otherwise I think we're better off to take the 30k we have invested in it and save it for a down-payment.

Down payment?
You going to finance a boat and go cruising? How are you going to pay for it?
I'm really not trying to be an ass, see I'm preparing for us to go as well, and from what little I've learned, your plan doesn't match what I have been able to gather.
Most people start out wanting a Cat, I guess they are modern and cool, but a fully outfitted cruising Cat for 100K is going to be tough to find, plus 100K for two years is I hope way more than it's going to cost. But maybe you can end up with a Cat for 150K, and have 50K for two years, or a good mono for half that and go for four years?
Are you borrowing this 200K?

[GimmeShelter]

Originally Posted by a64pilot

Down payment?
You going to finance a boat and go cruising? How are you going to pay for it?
I'm really not trying to be an ass, see I'm preparing for us to go as well, and from what little I've learned, your plan doesn't match what I have been able to gather.
Most people start out wanting a Cat, I guess they are modern and cool, but a fully outfitted cruising Cat for 100K is going to be tough to find, plus 100K for two years is I hope way more than it's going to cost. But maybe you can end up with a Cat for 150K, and have 50K for two years, or a good mono for half that and go for four years?
Are you borrowing this 200K?

In 4 years I could have 200k cash, and we would have about 35k put into the house. So if we sold the house we could keep that 35k as a down-payment on a new house when we return separate from the cruising budget.

My question is if I should push cruising to maybe 6 years away, and pay off the house as well before I go, instead of selling it.

[JerseyJoe]

I'm with Rover! Keep the house. Rent it. Get a monohull and go sailing! That's what I do. I always have the house to return to if needed, or can sell later if decide to upgrade or cruise longer.

[a64pilot]

Originally Posted by GimmeShelter

In 4 years I could have 200k cash, and we would have about 35k put into the house. So if we sold the house we could keep that 35k as a down-payment on a new house when we return separate from the cruising budget.

My question is if I should push cruising to maybe 6 years away, and pay off the house as well before I go, instead of selling it.

I think a lot depends on how old you are, and how marketable your skill will be after being gone a few years, my opinion.
If your young and will be able to pick up where you left off or close to the same income, then I think selling the house may be more advantageous as the house will always be a worry and something that will demand attention of some kind.
If your older and or maybe not going to be able to pick your job right back up, then possibly having a place to live for less money as well as having considerable equity may not be a bad idea.
Now I am not a financial adviser, I'm trying to nug this stuff out myself, this is only my opinion and it's worth what you paid for it, some get upset when we ask financial questions / advice here, they immediately tell you that you are a fool for listening to internet experts, but then they turn around and listen to the same experts on engines, electrical, whatever. I listen with the idea of taking several plans to a financial adviser.

On edit : my opinion is this is the time to buy a house, not sell one, but to be honest I have no idea if or when things will turn around, my belief is they won't.

[Capt Phil]

House rental income is increasing and probably will for the time frame you are considering. However, you would need to find solid tenants as mgmt co fees take all of your profit. Maintenance as absentee landlords can be problematic as well.
We lived aboard and worked periodically in SoCal, me in the delivery business and my now wife as a personal trainer so our skill set was pretty portable. We kept a small pied a terr' to stay in the market while we cruised and when we retired from the water, we had enough in savings, stocks and hard assets that we bought a real nice home... So it can be done. We would still be sailing/cruising if health issues didn't rear its ugly head. You never know what tomorrow is going to bring you so be flexible.
Roverhi's advice to buy a mono is worthy of consideration but if you freak out ever time you are heeled on the wind, maybe not a good choice. Cats are a blast, roomy, sail well off the wind but are dogs going to weather. You need to think out where you want to cruise, how much you enjoy time ashore in anchorages, how long your passages will be, etc.
you certainly have a much longer planning horizon than many cruisers. A lot can change to mess up your plans over that time period.
Good luck with your venture... Phil

[carstenb]

There's a lot of verbage on this thread - but the general consensus seems to be that $5000 is a bit on the high side.

A lot of cuirsers (who do like their comforts) have budgets that are around $3000 per month (including us). this includes repairs food, drinks, marina, sightseeing et.al.

http://www.cruisersforum.com/forums/...nth-42283.html

worth a read