What is the best size and type boat for resale?

[irwinsailor]

I had thought that buying big boats for resale would be a way to make money while cruising, but I read quite a bit that many people don't want a big boat and would feel better with something smaller. So what are future cruisers looking for in a boat?

[Harriet]

Unlike a house, which will likely appreciate in value over time, a boat is more like a car, which depreciates. The expenses attendant to owning a boat (dockage, maintenance, insurance), along with its natural depreciation, don't make for a good combination if you are looking to make money off of it. Even a boat that holds its value well will not be worth at resale what you paid for it. If it does, it likely means you put a large chunk of money into upgrades, and you won't get that back in the sales price.

[irwinsailor]

I would only hold the boat for a few months. Fix it and flip it. it is what I do but not with boats yet.

[Jeff H]

I don't think that there is one right answer to this question but I would think that a larger, older boat is generally not very easy to resell and will have disproportionately large depreciation even over a short period of time. Because larger boats have so much smaller a market and because they are so systems intensive and because any small problem can be an expensive big problem, and because the people with sufficient money to properly maintain a larger boat tend to be a little more picky about what they buy, I would have to think that buying a bigger boat as a short term investment would be a really bad idea.

I would think that a 5 year old 35 to 40 footer would hold its price pretty well for a period of perhaps 5 years, if well maintained. Often you can pick up a quality boat in this size range that has aethetic issues and clean it up an flip it at a profit. I did that with a number of smaller boats over the years. I would think that a 25-20 year old 35 to 40 footer that had been upgraded and well maintained before you bought it would be pretty easy to sell with minimal depreciation if maintained but it would be hard to buy an older project boat and come out ahead of the game since their value is restricted by their age.

Jeff

[irwinsailor]

Jeff, do you think buying boats out of charter service can be profitable? I would think finding motivated sellers with 5 year old boats will be hard to do. Also what brand names DO YOU think are the most desirable for cruisers/liveaboards?

[Jeff H]

I have been around quite a few ex-charter boat deals and frankly they have come out of charter really beat to death. They often start out with minimal equipment and cheaper models and then are run hard and put away wet. In the deals that I have followed the boats have not been all that cheap compared to what it takes to put one back in shape.

What I do see from time to time is people who are getting into the sport without really knowing much about sailing. Many of these newbies don't know any better and go out and buy new or next to new boats. (To be frank, at least in my experience very few experienced cruising sailors buy new brand boats but that's another story). Some of these folks do very well out there, but a lot more find this cruising thing isn't all that it is cracked up to be or they get their butts kicked and in either case they bail out pretty much abandoning the object of their affections to the marketplace. Some of these boats are placed on the market at high prices only to remain on the market for years before getting dumped cheaply looking for all of the world like a sailor on the morning after liberty. Others are simply placed on the market cheaply and dumped that way. I have seen some pretty good deals that way.

Regards
Jeff

[irwinsailor]

Your discription is exactly what happened to our boat. The guy bought it sailed it up here and walked away and let it fill with water. Why he did not sell it before it became a mess I will never understand. It worked out well for us though. Now I would like to do it again but this time without as much work. Anyway what price range do the majority of people have? I would think that $60000 to $90000 would be a good place to be priced for maximum intrest.

[Jeff H]

There does seem to be a lot of bracketing in what people are willing to spend. I get a lot of emails from people who are looking to buy a boat and would like some guidance. There seems to be real brackets that people will set for themselves. I see a lot of "less than 10 years old and less than $100,00" . I also see a lot of "less than 15 years old and less than $75K". Then there are subsets, meaning 'Offshore cruisers only' or 'Coastal cruisers only' or some other variation on those themes.

Jeff

[irwinsailor]

What do you get the most email for offshore or coastal?

[rsn48]

If you look in any marina, the majority of boats are 30 feet and under. Lets face it, you'll probably find more buyers for amounts of less than $40,000 than over. You might be better off selling smaller boats, more often and less of profit margin, than holding on to something larger, hoping for the great deal; ie. great profit; kind of like selling Timex watches versus Rolex watches. If you watched "The Apprentice" a lot, you have learnt price point is everything.

Boats are like homes in that the more expensive homes take longer to sell than the less expensive homes. I live in an area in which the real estate is always hot, even in a down market; but even here the more expensive homes generally sit for much longer before re-sale. The reality is that there are more people with less money. My favourite boating magazine is out of the UK called "Practical Boat Owner." Unlike its North American counter parts, it doesn't waste its time with large boat reviews. This mag also reviews many older boats that are still on the market. The average size sail boat it reviews is 24 feet.

The North American magazines leave you with the impression there are many large boat owners whereas in fact this is a misunderstanding based on mag reviews of large boats. At the Pardey's web site, I think they stated that 98% of all boats owned are less than 20 feet. In 2001, something like 850 sail boats over 35 feet were made and sold. The magazines give you the impression that number is much higher.

I'd start out with a smaller boat, around 24 - 28 feet and get a feel for the market. Chances are, you'll move that boat much faster. After you've been in the market for a while, you'll have a better feel for it, and by going smaller, risk less money up front.

[irwinsailor]

Boats are dreams to many, People will pay to follow their dream. I do not think that there is as much money to be made on smaller or low cost boats. I think boats from 38' to about 50' is the place to be.

One option you might consider if you have the capital to make it work is to locate boats in poor market locations, such as Mexico, and buy them in distress sales. Do a bit of claen up, then relocate them to a hotter market area for sale. It will mean you will be spending a fair amount of time cruising on investment boats, but I would think the profit margin would make it worth it.