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Old 28-07-2011, 10:00   #1
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Considerations for Resale

Hello all. This is my first post and in this group ( so knowledgeable and experienced) a little intimidating. I have experience sailing ( limited by standards here) and have long dreamed of spending months sailing the Carribean. I want to be realistic, thats why I say months not years. I am not willing to give up the home I just built. This is the second home I have built using the equity from the first one to keep my debt to around 35,000 grand. I hope to be able to clear that in 3 years. Soooo, the plan is to use home equity and buy a sailboat. Here's the realistic part. What if it turns out to be one of those dreams thats meant to stay a dream. Kind of like a threesome when your in a committed relationship. lol This means that if it doesn't work out I want to be able to sell and return my equity to the house. I do spend much time reading past posts and don't want to ask which boat, but if there is a model or other consideration to make sure I don't get something that I might get stuck with should my plan not go as hoped. I live near Syracuse, NY and had planned to take the St Lawrence to ICW to Keys, then Bahamas and near Carribean. In my readings here it seems it may be better to buy a boat already their? The house value is about 220,000, however I only want to use 30,000 to 60,000 of equity on the boat. I will have saved aprox. 1000 a month for cruising expenses. My fiance is a school teacher and will fly to me on breaks, otherwise by myself unless I could find a suitable crewmember. Thanks for taking the time to read this and offer any thoughts. Dan
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Old 28-07-2011, 10:01   #2
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Re: Considerations for resale

Greetings and welcome aboard the CF, Dan.

Don’t be too intimidated, most of us seldom bite.
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Old 28-07-2011, 10:09   #3
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Re: Considerations for resale

welcome. i think you will find boats donot have equity. thy are holes in water into which you pour money. worth every cent , but, realistically, doesnt come back on resale.
want equity--buy a house on land. that has equity.
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Old 28-07-2011, 10:24   #4
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Re: Considerations for resale

What Zeehag said....and... you can buy a boat that is more popular and more easiliy sold than some others. For instance you might find a boat you like custom built by it's PO. It doesnt have a brand name, or has one that is little known. Re-selling that boat will be tough and you will get minimum dollar. On the other side you can buy an Island Packet, J boat or other popular boat and it will hold it's value well. The downside is that you will pay a lot more for it. The other risk in buying a less popular boat is that it may have some wierd sailing characteristics that only become apparent after a while... Either boat might need the same money put into it...because popularity has little to do with the stuff installed on a boat, most of it is expendable on either boat. it's a dilemma every time I buy.... not sure what your comfort level is , but you dont need a big boat for Florida to Triinidad.... it's mostly daysailing!
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Old 28-07-2011, 10:24   #5
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Re: Considerations for resale

Thank you GordMay. I hear you Zeehag. I will be using home equity to buy the boat, not expecting to gain equity from the boat. With my past boats however I have usually broken even after a couple of years with a combination of buying right and meticulous upkeep and detailing. (something I enjoy and am good at) When it comes to cars and motorcycles I know what to look for and consider, not so much with sailboats.
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Old 28-07-2011, 10:30   #6
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Re: Considerations for resale

there are a few things to keep in mind.

1, your boat may not sell as fast or for as much as you like. if you can afford to wait for the right buyer, you will (generally) get your initial investment back (and lose most of what you sink into the boat).

2, think that are likely to inspire / excite a buyer include heads, galleys, and sea worthiness. be mindful about maintenance and upkeep as neglect will constrict the resale value.

3, be realistic. buying a well built, nicely equipped 32'-38' boat will appeal to a wider buyer's market when / if the time comes (as opposed to a 60+ etc)

assuming your schedule affords you the luxury, you may consider crewing for a month and getting a better feel for how much you really want to cruise. additionally, you may want your significant other to get a feel for cruising too as you may not share the same passion.

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Old 28-07-2011, 10:33   #7
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Re: Considerations for resale

Generally I would agree with Zeehag. A boat comes with lots of expenses. There are docking and moorage fees, pump-out fees, maintenance and upkeep, and so on.

On the other hand, with a house there are utilities, taxes, and maintenance fees as well. So you don't really get as much out of a house as you think you do.

Over the last few decades, if you bought a well-maintained, mainstream boat and kept it in good shape, you would be able to sell it for about as much as you originally bought it for--possibly a little more. You're not going to see large capital gains from a boat, but they do tend to hold their value. That's assuming you take care of it. Let it go to hell (as all too many owners do) and the value will go there, too.

To get the best resale, you want a "mainstream" boat. What does that mean? No radical designs. Nothing made from ferro-cement. Nothing that is home-built. Nothing that has had major changes made to the rig, the interior, or anything else. Unless, of course, you can get one of these boats dirt cheap and have the skills to fix whatever is wrong with it yourself. Then you may make money off of your "sweat equity."

Bottom line, you need to do a lot of research about what boats are on the market and what they're going for. Then you should be able to make an informed decision about what to spend and what to expect that you could get back.

Good luck.

Edit: Ssanzone makes a good point about the size. 32'-38' is pretty "mainstream." There are people looking for 26' boats setup for living aboard, but that is very much the exception in that size of boat, not the rule. For best resale you want to stick with the rule!

On the other end, get much above 40' and you're getting into the realm of more expensive boats that generally require more crew, and so your potential pool of buyers gets smaller.

It might be boring, but that's what you want. You want a boat that's pretty ordinary, pretty common. One that does not stand out too much, other than perhaps for the excellent care you have given it.
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Old 28-07-2011, 10:34   #8
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Re: Considerations for resale

Understood. Thanks Cheechako. If anyone has input on other aspects of my plan please let me know. Good or bad, doesn't matter. Just want to be careful not to start to many threads before further research of past threads.
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Old 28-07-2011, 10:39   #9
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Re: Considerations for resale

To buy a saleable commodity of any type the rules are pretty much the same imho.
Buy something that has liquidity in the market. Basically one that is bought and sold often.

Ask a broker what are the most popular boats in your price range.

Then check Yachtworld and study the ones that there is always some on the market, some appearing on the market and some often being sold.

Buying a specialist commodity might feel right to you, but far better to buy on thats going to be able to sell at a known price. Then if you want to sell it quicker you just have your price a few thousand dollars lower than the market.

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Old 28-07-2011, 10:44   #10
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Re: Considerations for resale

It sounds like you know what you are doing. Buy a good boat, maintain it well and you will get your initial investment less broker's fees back out of it. A good case in point: Years ago I bought a Passport 47. What a machine! Long waterline, aft cockpit, beautiful interior by Ta Shing. Passports are (were?) pretty popular boats. I put $60k into renewing the teak decks, a couple of sails, complete mast and rig rebuild, canvas, high end refrigeration etc etc. Afer using it a while, it took a year to sell it through a broker and I got...same as I paid for it out of it!... less broker fees.
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Old 28-07-2011, 10:46   #11
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Re: Considerations for resale

If you can find a suitable boat in your area the trip through the Erie and down the Hudson is not to be missed.
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Old 28-07-2011, 10:51   #12
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Re: Considerations for resale

Diverdr;

Until the boat market changes, you should not expect to break even on any boat purchase these days. Sure, you may be able to sell a boat for what you paid for it, but if you invest in any upgrades,etc, they will not add much to the boats selling price.

Buying right and keeping a boat up will certainly help, but the market is just too soft for this kind thing to happen with any regularity.

Chris
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Old 28-07-2011, 10:52   #13
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Re: Considerations for resale

Great information. Thank you all. 36-38' sounds good. I think crewing makes alot of sense as well. I also think I should do a bareboat charter. I will search the archives here to find a good bareboat charter company. I am familiar with the costs of owning a boat. That is why I am holding off to buy the boat until I am closer to leaving. That money saved can be put to the cruising account! As for my significant other, I don't think she will be able to leave her teaching career. This means solo with visits on her breaks. (6-14 days every 6-8 weeks) I am in auto sales and am a NYS licensed home inspector so could easily leave and pick up where I left off upon returning.
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Old 28-07-2011, 14:20   #14
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Re: Considerations for Resale

A boat is like a car. It will depreciate, even if you keep it up. Some cars hold their value better than others. In fact, I once sold a BMW 2002tii for more than I paid for it. But that's the exception, not the rule.

Boats are the same. Do your research and proceed on that basis.
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Old 28-07-2011, 16:50   #15
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Interior nuts...

When I was buying I found that any boat that had a really nice interior sold (pre GFC) very quickly for a good price.

Those with an indifferent interior seemed to take a long time to sell, and the price was not nearly as good.

This is in Oz, the available boats in the US all look stunning and cheap compared to what we have here.
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