Income and depreciation, never the twain shall meet?

[Dowesva]

Hello again,

If anyone has seen my other posts you'll know that I'm more than a bit of a NUB. Right now I'm working on getting my first real sailing experience, and despite the lack of experience I long ago concluded that a liveaboard is the most rational approach for my future plans. I have a knack for travel, and as I move this to an international endeavor I see numerous benefits to this lifestyle (have you seen Japan's housing costs?). At the same time I’m putting away more and more every year towards the purchase of my future livaboard.

Meanwhile, I spend a lot of my spare time searching for the boat of my dreams. Multihulls have always been the focus of my attention; I like the look, the space, the stability, and the speed that they offer. I know it’s going to get some scoffs, but the look and the open space is important to me. When you’re as young as I am attracting girls is still a pretty important part of life. Taking a girl back to a tiny cabin on a monohull surely won’t score any points, and if it’s rocking back and forth that’s doubly so.


The boat I’m most attracted to is NEEL 45 at the moment. I like tri’s over cat’s, but want the space of cat. Not the prettiest thing on the water but the rounded look makes me think of the Enterprise so it passes.


If I can put away fifty per year that means in eleven years I could afford it at the current price, which is a bit far out in my book. I was wondering what an expectable depreciation would be for a mid-size luxury cruiser like this would be in five years.


Before you go off about the variability, lets set some controls:
- - Not a charter boat
- - No issues with the hull, keel, or rudder.
- No issues with the mast, rigging
- - Well maintained engine and sails in decent condition
- - Minor electronics issues if any


So is it reasonable to expect that a boat in good condition would lose 15-25% value in five years? I’d prefer a conservative estimate, although I will be looking for a good deal of course. Basically, if a $560k boat is still going to be $500k in five years I probably need to start looking at cheaper boats to save up for.


On the other hand, my ideal boat would be a 38’-42’ tri with the NEEL style living space that merges the outriggers with the main hull. Would it be wise to look at having a custom built instead? What have others paid for a custom semi-luxury cruiser around 40'?


As you can see I’m really in the dark here. I’m trying to create a 10 year budget that includes buying a boat, buying property, and putting a sizable chunk away for my travels. In terms of my financial planning this is a huge grey spot that could turn my five year plan into a ten year plan in a heartbeat. I’m still working on getting the experience to know if a liveaboard is really the right path for me, but I’d like to get a realistic hold on how big this financial mountain really is.

[daddle]

* Sounds like a very expensive way to "attract girls."

* Well maintained boats do not depreciate much. But proper maintenance costs maybe 10% per year (see other recent thread).

* My opinion: Someone buying a $500,000 boat should have several million in other assets. To do otherwise is foolish.

* Managing such a boat is a big undertaking. Especially so in yacht-unfriendly Japan.

[Dowesva]

1) Haha, well I hope to liveaboard and the girl-attracting is a factor in selection, but I'm not quite wealthy enough to buy a boat just for that purpose. I think I'd prefer having a bit more open space regardless, even though I tend to travel fairly light.

2) That's what I was afraid of. In that case, do you know of any tri's with an interior that stretches into the outriggers that aren't so expensive? From what I've read there are numerous advantages over a cat, especially if you can keep the extra space.

3) I'm aiming for a 60-40 split, 40 being the boat. There's also one other person who's investing in this with me, so I'm not carrying all that weight.

4) Of that I am well aware. However even with the high expenses it's comparable to traveling in any other terms. I like to stay in a place for 3-9 months before moving on and I'm aiming for a 10 year world journey. The boat gives you a home everywhere in the world, even if you still have to pay "rent". And as you said, if they are well maintained, that's a decent hunk of equity.

[daddle]

I don't know much about the available trimarans. I seek performance so an attractive tri would have everything in the hull area with minimal sized amas. It's about wetted area and windage. But other CF'ers might correct me. (Are not all large cruising trimarans custom-built?)

Dangerously extrapolating your comments I think you are looking for a movable party-palace. Something like a floating condo. Catamarans fill that requirement very well.

CF'ers: Does anyone here consider a yacht a sane investment? Pleasure, yes, capital preservation or income, no.

[Sand crab]

I'd expect about a 50% loss in 10 years. After that things start to level off or depreciate less at least.
Those Neels are production boats built by one of the leading sailors Eric Bruneel who worked at FP for 25 years. Google him. They are fast, stable and beachable. However there is no cockpit weather protection even while anchored unless you rig an awning nor do they have adequate helm seating. Boom headroom is tight so a bimini may not be possible. You will be hot and wet. There are also these curved trip hazards as you step from the cockpit to go forward along either hull. On the Neel 50 the lines come down the mast into the salon which allows protected sail adjustment but you have to leave the cockpit to do it. I'll bet the N45 is similar.
Otherwise I like it but no weather protection is a no go for me.

Edit: I see now that the 45 does not have the lines leading into the salon and those N50 trip hazards appear to be gone on this one.

[Dowesva]

I really wish NEEL had a 35' out there, the 45 is such a sweet boat but it's just too damn big. I found out about them while doing some research on Fountaine, so I knew about the connection. That's part of the reason I'm so inclined towards them despite the lack of market testing over time, after all they're a very new company. Are there any similar boats in the 35' range, or should I be looking into design/build costs for a custom?

The Fountaine catamarans are a suitable runner up, affordable and much closer to the size range I'd prefer.

[Factor]

If you can find a good CROSS 37/38 or Searunner or Simpson Liahona, or similar, you can get a good boat at a good price.

[DumnMad]

Forgive me if you know this already.
If you want a traveling home and you want to moderate your costs you will need to find boat electrical systems are interesting, understand how to maintain two different drainage systems, how to keep your water supply safe and how to replace pumps and filters. And how to keep air, water and bugs out of your diesel.
Have a look at some of the "Engineering & Systems" threads on this forum. I imagine you will have at least 700AH of battery storage, know how to monitor them and have 3 or 4 different ways of topping up the batteries each day. Good fun.

[twistedtree]

If you do some searching on YachtWorld.com you can probably get a sense of the relative prices of used boats of various ages.

Keep in mind that you have two price factors working together. One is the loss in value as a boat ages, and the other is the increases in price of a new boat. Today, if you compare the price of a new boat with a 5 year old example, you might see a 25% spread. But that 5 year old boat wasn't bought at today's new boat price, it was bought at the new boat price 5 years ago.

As a starting point to model this you might assume a 10% annual loss in value after purchase, and a 3% increase in price of the equivalent new boat.

So a $100k new boat would be worth $90k, $81k, $73k, $66k, $60k over 5 years. That feel a little high, so maybe trim it back to 5% and see what happens.

Anyway, you can play with the numbers and try to fit them to what you see on the brokerage market. In general I'd say a 7-8 year old boat would be 50% to 70% of the new price, with high quality boats at teh upper range, and lower quality boats at the lower range.