Investing vs. Avoiding the Mother Storm: A Treatise

[Macopa]

This is somewhat of a boat loan/insurance question but I'm curious what the opinions are. I don't have all the money saved for my boat purchase yet. Living in FL I was debating on whether I should:

A. Take a loan out on the boat and make a purchase soon with the intent to livaboard. This way the money I spend on rent each month can instead go towards my investment (or lack thereof depending on who I'm talking to ). In addition it is just that much more time I can sail, gain experience, and start to get a feel for outfitting. The risk is owning a boat that will be mostly on anchor (as I'm working here too) during hurricane season...

OR

B. Keep saving and avoid hurricane season and make my purchase in the fall (late in the fall). The negative here is that I will be spending $XXX each month in rent instead of putting that towards a boat loan.

It comes down to what's better? Investing every penny or avoiding the risk of a hurricane. With insurance, is the boat covered well? If it were destroied for example, would I get close to my dollar back? I'm unfamiliar with the world of boat insurance...

[Fishspearit]

A few of the things that I've learned recently: Expect to pay 4-5% of the boat value for full coverage insurance in Florida. You can get an agreed value policy for a total loss, so if the boat is destroyed you should get the money you insured it for. But, it's sad to say, if you are getting a boat 10 years or older you had better hope it's destroyed rather than just damaged, because all the policies in Florida that I'm aware of are for 'depreciated value' of the damaged equipment, plus high deductibles and even higher deductibles for named storms.
Living at anchor and working full time is tough. Plenty of people do it, but they will all tell you it's tough. Affordable dockage makes it much easier, but then it's kind of like rent(but usually less than an apartment).
I guess I should also add that I know, waiting to do the things you want do, is also tough.

[Weyalan]

If you invest, doesn't mean your money is safe, given current economic climate...

[Maren]

Originally Posted by Macopa

Keep saving and avoid hurricane season and make my purchase in the fall (late in the fall). The negative here is that I will be spending $XXX each month in rent instead of putting that towards a boat loan.

If I understand you correctly, you plan to buy a boat in the late fall at latest. Here are the unknowns (for us, I presume you know) :

Rent vs slip vs feasibility to anchor out in your area.
Lease on your apartment factors (month to month, up this month?)
Ability to up and go when the weather turns. You don't need to go to New Jersey, but could you realistically even get it to a truly protected anchorage.
Condition of boat... in fact, do even know which boat yet?
Loan issues (keep this to yourself but what are you qualified for?)

Overall, I think the best way to cypher this out is to figure out all the costs you be saving vs all the added expenses.

If you don't have a boat picked out, just keep plodding along. Do lots of research about the types and features. Know how they are built, what goes wrong with them, how to repair them. Look also for surveyors who specialize in the types of boats you like. Look in the papers and online but DONT RUSH TO DECISION.

It's like investing. The market will be there tomorrow.

If you do have a very particular boat picked out. Talk to the neighbors first not the owner.

As for the investment or not. I think they're about on par.

Hope that helps.

[Macopa]

Maren, that helps a lot. That's something I need to realize...that the investment is still there tomorrow and that they are both about even. The house I'm renting right now is month to month which is great as I can get out anytime. What I have a hard time wrapping my head around is what it truely will be like to livaboard at anchor and have to boat to shore everyday for work. Unfortunatly the waiting list for averaged price slips is over 3 years here and I don't have to money to pay for those currently open (and at a premium). Also, while I do have the list of boats narrowed down I am not 100% set on a particular boat. Will I ever be? I don't know. With there not being a particular season here (purchase wise) I think I will wait for now, see what I can find as far as dinghy docks, and keep saving those pennies. If I find the definite boat I'll probably try and make a move but otherwise I will take my time.

[TabbyCat]

Fishspearit's said it pretty well, except in my experience, the rates are closer to 2.5% of hull value. For Florida moored boats, partial losses are usually subject to depreciation, or in the worst case, you might even end up with a policy that excludes windstorm coverage. Are you going to stay in Florida full time after you get the boat? If your goal is to head to "the islands", the advantage to getting the boat earlier and living on it is if you can list 2-3 years of ownership experience you will have more insurance options available to you when you do go cruising. But this is just from an insurance perspective. Finding the boat that's right for you is more important.

We bought our boat with a 5 year plan to live in the marina, keep working & save our salaries toward the cruising kitty, but we only lasted 1 year. Once you have the boat, the urge to sail south is pretty strong!

[Macopa]

I see. My plan once the boat was purchased would be to live on it, work in Tampa until the kitty was primed, then take-off. I couldn't imagine lasting more than a year before I raised the sails but then again....I definitely need to put some $$ away. What you said I'm sure is true, so I'm going to have to shy on the shorter side of a year or less before I'd want to take-off. I didn't know insurance companies will give you discounts for living on the boat certian lengths of time. I guess they figure you've learned to be a capable sailor by that time? Mighty presumptious...