How much to pay for someone else's improvements?

[KiwiKen]

Originally Posted by john61ct

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.

but maybe only to you, so don't let on to the seller 8-)

Spot on, it is like selling a car, aftermarket add ons and expenditure shouldn't be a factor, and shouldn't enhance the market value anywhere near what is necessary to recoup that self selected expenditure'


If a car has a new set of tyres so what, i would be asking for a price reduction if they were worn, same with a boat -

New rig, great, why was it replaced ( because the old rigging was at it's used by date)
New Sails, the same, they were replaced because they usually need replacing
Engine , replaced, overhauled, rebuilt, why, because it was necessary


The point, if this expenditure and work had not been done, it would have significantly reduced the market value of the boat.
To inflate the price because necessary work was carried out is double dipping, nice if you can get away with it.


One of the best cards one can play is the conditional walk away.
Make a fair offer of what you are prepared to pay, give the seller you business card and suggest he thinks over your offer, and contacts you if he wants to change his mind, and walk away.


This tactic has a good hit rate on a buyer's market, and you don't end up paying more than you wanted to.

[s3raphim]

I recently bought a refit Cal 39 MKII at about 20% more than the highest priced Cal 39 on the market. I would do it again in a heartbeat. I love this boat, and the 20% higher price comes out to about 20k more than the higher end of the current market range. And that 20k is totally worth it (to me), and not exorbitant, considering the redone standing rigging, 7 new sails, full Iverson dodger/enclosure, watermaker, remodeled interior, redone wiring, hull paint job (blue), etc etc...

Having once refit a boat myself, and then eventually sold for a hefty overall loss, I feel like things have come full circle somewhat... enjoying the care and intentional upgrades on this Cal, done by owners who loved her and spent way more than they sold her for, even though they sold her as the highest priced Cal 39 on the market at the time.

[thataway41]

My Two cents here: I just went back over the ad for the Cal 46, which the owner claims to have put $600,000 into. The boat is "gorgeous", but I owned a 1973 Cal 46, which I completely restored in 1991--including the stern modification which includes a small swim step, and built in stair case, much better lazarette, a set up for electrical winching a 12 1/2' RIB onto the aft deck, new (& increased) tankage, refinishing all of the wood, etc--My total cost (doing my own work) was about $68,000, including the cost of the boat at $40,000 (she looked like a derelict when purchased.). Sold it in 1998 for $128,000. My boat had a bigger generator, a better water maker, (but no in the boom furling or air conditioning), a functional staysail, expanded holding plate (110 and engine) refrigeration/ freezer a completely rebuilt engine, new LP paint and varnish just before sale. Also had the more desirable raised dinette.

Putting that aside, the seller of the "$500,000" boat did not know Jack Jenson and put incorrect info. in his ad--I Knew Jack. Jack built and owned a Cal Cruising 46 (not a 2-46), and I believe it was #3 hull. Jack Jensen's Cal 46 is for sale currently in Pensacola by the person who bought it from Jack Jenson's estate.

I do believe that a well maintained, update rigging, electronics, gear etc will raise the value of the boat to some degree--but no where equal to what the cost was. The Cal 46's are still $50K to $80K boats. I know of one CC 46 which sold for under $30,000 this last year.

[Greg Mason]

I think we all accept that money put into a boat has to be used out, not paid out. The issue comes at the amortization period, when the total investment adds up to a 3 year usage, or less. The money is not recoverable unless it is used and amortized. However, if you want the prettiest boat with all the updated equipment, well, that will be a great deal for prospective buyer.

[Gerrycooper56]

I like the sellers statements of no ‘low ball’ offers. There is no such thing - as others have mentioned, the value is what someone is prepared to pay on that day. Everything is negotiable.

[Drewnie]

It is the responsibility of any boat owner to maintain their vessel, so as a buyer, you should look at the maintenance records and upgrades. The asking price really has no bearing on what the boat is worth. It's what the buyer is willing to pay, within reason, and the seller is willing to accept. Period. There is little chance you will get any ROI in owning a boat. Just enjoy the time on it and hope to recover the depreciated value. Buyer Beware if there are no records of maintenance and/or upgrades.

[jsanton]

I figure I’m going to spend a couple boat bucks a year on my boat. It’s a sunk cost. I’ll always find something.
So, I don’t count those dollars.
With that in the background, I’ve always sold boats for more than I paid for them.

[SV Windrush II]

I have dumped several times over the into my boat compared to how much it is worth. People that base the asking price based on every penny they put into it is just dreaming. If I sold my boat right now, which it is actually for sale, I will only get about 1/4th of everything I put into it. Thats just the reality of owning a boat.

[botanybay]

Originally Posted by Zzmeyer

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.

Another way to look at it is that to keep her Bristol requires yearly investment to just stay even with whatever point you are in the depreciation curve.

Ie if it is going to loose 10% for depreciation the maintenance costs avoid it being much more...

The refit makes sense in that in the following years the maintenance is less and you enjoy that equipment but the depreciation curve continues.

A tough boundary is 20 years old because financing gets more problematic

[jen1722terry]

Great, thoughtful thread, fellow members. Love it!

A few more comments, which may or may not be redundant:

1. Boats are not at all like real estate, IMHO. Jenn and I have made some successful real estate investments over the years and have learned the hard truth: houses depreciate like any other consumable; it's the land or airspace they occupy that goes up, often way up.

2. Boats don't appreciate, but they can save you money. Example: we live aboard our boat all summer in one of the East Coast's loveliest and snuggest harbors (Northeast Harbor, Maine). Mooring cost is $2300/season, which includes free parking and launch service (value about $1200 value). Annual recurring boat costs are about $5,000. Views of the harbor, the many fine vintage yachts and wildlife from our cockpit are wonderful, just as good as many of the waterfront homes surrounding the harbor which rent for $300-$1200 per night and often much more. Unlike most of those expensive homes, we have a clear view of the sunrise and the sunset. We go sailing whenever we please. When we visit Maine's many lovely harbors, we pay $40 night for a mooring or anchor for free. We meet and make friends from all over the world each week. Acadia National Park is nearby with free shuttle service all summer. Mount Desert Island has countless fun events all season.

3. Yes, we put about $40,000 into our $37,000 boat since we bought it in '13 and no small amount of labor. And our boat is not spacious, being only as large as two not-large people need to live comfortably.

So do the math, if you like, to see, how boat ownership can, in fact, be a wise investment if you enjoy using boat and have the time to reap the rewards (we're retired). For us, it's a no-brainer. We enjoy using the boat that much, even though we own waterfront homes in NH and Nova Scotia.

And if any of you stop into Northeast Harbor this summer, look us up. "Glissade," Cape Dory 31 with all new canvas covers in toast color (this winter's sewing project). We're at one of the floats on the far right side near the Asticou wharf.

And all of you in northern climes, do enjoy the hope and joyous anticipation that goes with spring outfitting.

[Zzmeyer]

A waterfront home in San Diego can be found for as little as $2 million. My marina is full of folks from around the west who vacation and weekend on their $100 thousand waterfront "home" I guess the Home Home owners can at least say "in 10 years my house will be worth $4 million while your Boat Home will be worth $70 thousand." Jenn and Terry put it well. Return on Investment is calculated many ways.

[witzgall]

This must have been the bare hull that was sitting at Shannon after they went out of business.

Chris

Originally Posted by KP44

I looked at a 51 Shannon. It had been totally redone inside with apartment house type cabinets, tables, cupboards, etc.
All I could see was that all that crap would need to come out and capable fixtures installed. The contractor thought his "improvements" had increased the value of the vessel.
All it could be used for was a live-a-board tied to a dock.

[valhalla360]

Originally Posted by jen1722terry

1. Boats are not at all like real estate, IMHO. Jenn and I have made some successful real estate investments over the years and have learned the hard truth: houses depreciate like any other consumable; it's the land or airspace they occupy that goes up, often way up.

Yep, a 1950's kitchen in perfect original condition will still be worth a lot less because it's dated. If it's a 1950's kitchen in bad condition, offers will assume they need a complete replacement.

Boats are as bad or worse. At best you are slowing the depreciation.

If the seller has $500-600k in the boat...they probably could have bought a new boat for about the same amount.

[manu_newport 41]

Used sail boats come in all shapes and form.
And there are some real deals every now and then

I would advise first to narrow your search to the kind of boating you plan to do. IE Florida and keys shalow draft, off shore passage deeper draft, how many people you plan to sail with, weekends or live aboard, comfortable, fast or slow...
I'm in the process of refitting my 3 Rd boat

Here are some of my rule of thumb
Solid structuraly sound Hull and deck is a must
Motor and rig must be in good shape. Refitting ether one will often cost as much or more then the boat.
Electronic usually end up working and need to be changed
Paying for someone to to the work is a losing proposition.
Boat work is a labor of love and it takes a lot of time but if you have the skills to DIY at a level where the work will look and be profesional than there are a lot of amazing boats waiting for someone to show them a little TLC and take them out for a ride.
Bottom line is I would buy a boat that can sail right away but needs elbow grease
Paint varnish plumbing and electrical wires will run you in the thousands but not the the tens of thousands.
And then there is that foggy area between what you really need and what you really want🤔

[daletournier]

Value and price are two different things. This Call 46 is probably great value for 70-80k. Price is what you pay value is what you get. As others have said, the money spend should make it easier to sell when priced by the market, not by the seller.