Is the 10% rule fact or fiction?

[EngNate]

From 25 years of boat repair, maintenance and R&M guidance I would say that the 10% is a good rule of thumb, as good as it gets, and it is widely shared by boat repair professionals. That is to keep it in the current state of serviceability and readiness with respect to items that deteriorate with age, wear out, become depleted or reach the end of normal service life. Acquiring maintenance deferred or repairs needed is another budget. Premature failures or those caused by other factors are another budget. Except for preserving materials or finishes, maintaining appearance is another budget. If you are indeed getting a real bargain on a boat use the fair value not price paid (that should be obvious). The boat owner's time, knowledge and skill set is a huge influence, as is dependence on boatyard and contractor labor. Project the 10% and in most likelyhood you will be ahead or behind some but neither will make or break your boating experience.

[u4ea32]

Similar concept as many have already mentioned:

It is up to the owner how much is spent. You can spend zero per year, or you can spend much more. Some racing boat teams spend the cost of the boat every year, such as those racing TP52, Maxi72, Mod-70, IMOCA, and sleds. In fact, the top level competitors in many such programs spend more than the cost of the boat itself each year.

There are many people in Los Angeles who spend essentially zero on housing each year. They are called homeless. You can choose that path if you like. I see many yachts that are run on a shoestring, but they are closer to living on a park bench or under a freeway overpass than any lodging I would ever choose.

I like my boats to work, to be fun, to be beautiful, to be safe, to sail well and fast. To achieve that goal, my expenditures -- even when I do substantial amounts of work myself -- is something like 5% on easy years, 10% on many years, OF THE ORIGINAL PRICE OF THE YACHT WHEN NEW.

So on my current restored 1983 Olson 40 (think frame off restoration of a barn find Ferrari), which today would cost about $500k to build new, I have been spending $25k to $50k each year to own the boat free and clear of any debt, after the total refit three years ago.

This number -- 5% to 10% of NEW price of the boat -- has been typical for me, for a range of power and sail cruising yachts in North America, Caribbean, and European waters, for several decades.

The reasons it costs that number are invariant and fundamental: within 20 years, every single thing other than structural material gets replaced, which means removal and replacement, often with re-work for the new features/capabilities/installation requirements for the new gear. There is no chance the R&R is cheaper and easier than the original install at the yard or factory.

So 5% (1/20) of ORIGINAL NEW COST is a pretty darn firm floor on cost. The 10% comes in when big ticket items needs the same treatment as the more typical electronic, electrical, plumbing, line, and minor rigging issues.

[sailingharry]

What a riot. No one even knows what the rule of thumb IS, let alone if it is right.
* Is it DIY, or pro maintenance?
* Does it include slip fees or insurance?
* Does it include depreciation?
* Does it apply to brand new boats?
* Does it apply to 30 year old boats?


The rule is so filled with holes, it has no meaning. And everyone adds and subtracts assumptions to make the rule "work" for a specific boat, with a specific set of assumptions.


I went mid-high the first months on our boat. New upper end sails, new hydronic heating system, new rubrails, bottom job, sprit for the spinnaker, new-to-us AL RIB dinghy, 100% dyneema halyards, a few other bigger ticket items, and spent about 15% (over 18 months, so 10%/year). My intentions next year (7 month cruise) is to spend well under 2%.


That cost would have been more if I had bought an older boat.


But maybe a better rule of thumb is $250/ft/year. But again, that would apply to the first 2 years, and the third year will be well under $100/ft/year (and I don't expect to see what we spent in the first 18 months for years to come!).

[sv Stella Maris]

This question always elicits drama. Either people think they’ve ‘beaten the system’ by not paying what they think is 10% or they are so upside down that they are bitter. Both positions are understandable.

But jeez y’all...chill out...it’s a simple question...hehehe.

I love boats. I hate boats. I love boats. I hate boats...where am I ? ;-)

[dstraton]

I think 10% per year is roughly right. Many other variables: cost of stopping (on the hook, vs marina berth). Age of stuff; a lot of boats seem to me to be designed with components with a roughly 7 year life-span. Resale value; production boats of a reputable brand are usually easier to sell on when the adventure is over than custom boats or home-made boats. Social commitments; expensive obligatory trips to visit parents and grand-children raise the stakes.

[lo2jones]

The 10% cost does not apply well to cruising. It is an industry guide for folks who keep their boat in a marina 80% of the time. Try the numbers in your own locations. $10/ft per month x 12 plus insurance, slip fee and contributing to a repair kiddy for a $150k boat is pretty close. It didn’t work for my 1965 Columbia 29.

[R Hutcheson]

It is a good rule of thumb. Assuming you purchase a boat in reasonably good condition and intend to keep it that way. What you spend initially will depend on where you are in the maintenance cycle for that particular boat. New or a recent quality refit you probably won't spend that much the first few years. But at some point, sails, generator, engines, running rigging, standing rigging, all are going to have to be replaced. If these bills come due during your first couple of years of ownership you are going to spend a lot more than 10%. However those systems should then be relatively problem free for at least a decade, reducing your cost in subsequent years. If managing maintenance cost is a primary consideration, consider buying a boat in good condition paying close attention to cosmetic items and plan to trade boats in two to three years. You'll likely duck the high dollar items that run up ownership costs. However if you have fallen in love and are going to marry the boat, 10% yearly over the lifetime of your relationship is realistic. A third option to manage the cost is buy a boat use the heck out of it do minimal maintenance and sell when you are afraid it's about to start getting expensive. You will take a big hit when you do sell, but you will keep annual operating expenses down. Of course as one poster pointed out environment makes a lot of difference. A boat on a freshwater lake in the Southeast is not going to require nearly the maintenance of a boat in saltwater in South Florida.

[sailorman14]

That’s not true.
IT COST WHAT YOU HAVE.

[sailorman14]

What I find on my boat is that the 10% rule does not apply.
IT COST WHAT YOU HAVE.

[gordonhinds]

Well done on getting your planning underway! I too am interested in the cost of crising/liveaboard an a yacht capable of being handled by 2 people.

It seems to change a lot depending on all sorts variables. Do you fly home (not now obviously), Do you like to ski? Do you want to eat out? Stay in Marinas? Drink nice booze? Need medical support?

With the boat, what condition is it in? Does it need a new rig? A new motor? What sort of electronics? How are the batteries? Solar panels? inverters? Are the sails OK? Dinghy condition? Does it need Davits? Outboard motor condition?

The figure of $50K per year for living expenses seems to pop up. Sometimes that includes some boat costs - insurance, slipping etc. And about $15K for other maintenance - sails, rig, hardware, etc. Some people do it for less. Some for more.

I'd like to hear from those doing it. I suspect people often under estimate all the costs.

[carstendenmark]

OP, what is your 8-year plan ?
Preparing for the cruise for 8 years, or start out now and cruise for 8 years ?


Is money a problem for you or not ?
Space requirements and luxury on the boat ?
Do you have sailing experience ?


If not, for planning to live that lifestyle, you better learn to sail and do it well, before spending money on a 45' boat. In that time you can clear out, if you like cats or mono's.
Get access to a small boat 30-36' (buy or lend), well maintained. Try it out first.


I was almost buying a "project" boat, a homemade german steelboat 45'.
And ended up with my 29' GRP after many considerations.
Saved tons of money, and can sail this baby by myself any time.
After some years, I can just sell her and upgrade to a bigger boat, if I go for bluewater cruising.


Crucial is (at any boat purchase) that an experienced person follows you to inspect the boat carefully.


An advantage of buying a secondhand boat which is in need of ex- and interior refurbishing is, (if you are a DIY'er) that YOU can make everything like YOU want it !

[wackerb]

I bought a 3 yr old 40' Catamaran and figured 50% over two years. It was probably more like 60% over 3 years and I did most of the work and repairs myself. You don't want to skimp if you're out in the middle of the ocean. Plan for worst case and at least you won't be sitting in a marina afraid to leave because you can't afford needed maintenance and repairs. Smaller, newer and seaworthy beat all other considerations.

[Sailbrandison]

I can tell you that 10% is a sales pitch to get people to avoid using spreadsheets. That's boat BS. Some boats are 5%, some are 25%. I have a Lagoon 440 2006 model. It was in good shape when I bought it, having new 2014 Yanmars and a Cummins Onan. The previous owner let it sit too much so I have had to put $5000 in real repairs into the generator electronics, which is sort of an outlier. But, in a 44' sailing catamaran, plan to spend $5-10k on things that are totally odd, in your first year. Every year, the cost of maintenance is that you need to haul the boat (really 18 months but there's always a surprise). This year we had a really bad marina of electrolysis up in main and it ate our zincs and damaged our props = $1800 surprise at haul out. $5-6k for regular haul-out, paint and various touch ups. Our davit broke on a passage recently: $2000 to fix, labor and parts. On my boat, if using a reputable rigger, the standing rigging is $12,000 per decade, not counting lifelines (which are $4-5k if you pay someone - half that if you do it yourself.). Running rigging for my boat is $3-4k for the cheap stuff done yourself, twice that if you use Endurabraid and Dyneema as I have. They say every ten years on that too, but I say five. This is the 'make or break' of your boat. Add some theft and loss. I had $500 worth of dyneema stolen off my cockpit that was for my dinghy. Prepare to spend $500 per year just to keep your outboard running on the dinghy. $2000 if you had idiot mechanics like I did that mess things up. Bilge pumps. Budget to replace those every year or two (all of them). Don't by from Scamazon. Their stuff is either fake or cheap. $1000/year in pumps if you're lucky. I'd budget $2000. We have five AC pumps, six bilge pumps. You need 5,000 gallons per hour per hull or more. Those aren't cheap. Plan on having $1000-2000 worth of electrical per year to do on a boat my size - if you're lucky. You'll inevitably have at least one major appliance, or electric device (navigation, pilot, gauge, radio, refrigeration, stove) go out per year. Budget $1-2000 for that. We put 400 hours per engine on the boat this past year going about 5,000 miles. We put about 900 on the generator. I probably wouldn't average that much generator use full time as a liveaboard because I'd get used to hotter cabins and open hatches. Budget $3.50/gallon for fuel. I've paid no less than $2 up north, and usually well over $3 down south and over $4 in the islands. Every six years you'll need to replace hoses for your sanitation systems or they'll stink. I just paid someone for that 'fun task' and it was $3500 counting all the hoses and rebuilds on four heads. You can do it yourself, one by one for about $250/toilet. If you have the awful Jabsco heads like I do, the joker valves need to be replaced about once per year. In reality they backflow in a year or two after replacement, so in two years I've spent $100 per toilet now twice just keeping them in great shape. I'm sure others have better heads and spend far less time working on their more expensive heads which are made well. Mine are not. I also learned the first round, the hard way, DON'T EVER PUT ANYTHING DOWN THE TOILET THAT doesn't come out of your body except dawn or vegetable oil to lube the toilet hardware, valves and pipes. NO CLEANERS of any kind. All of that stuff dries out the hardware. Get ready for a 'sail drive explosion' at lease once every ten years. Something bad will happen no matter how tight you are with maintenance. Sail drives are inherently problematic, just like shaft packing is also a maintenance issue you have to stay very attentive to. No doubt, shaft drives are better than sail drives, but are much harder to find on 'the boat you want.' Insurance is $6-12k per year depending on your profile. I have $350k in my boat counting the refit and not counting regular maintenance. You need new sails every 6-10 years. A full set for a full timer is going to cost $12-15k for a 44' catamaran. Prior to my buying the boat, the owner had to put new sail drives on it due to an electrolysis issue. That was 30k including new galvonic system. So if you count the maintenance I did in the first year, including that, it was $61,500 worth of repairs (not refit). That's 17.6%. If you count only the hard maintenance verses what I paid (not counting refit costs = $280k), and not counting the sail drives (as the previous owner did it), it was 11.25%. I might be able to do most of the next years work for myself and it may be 5-6% of the full cost, including my insurance - or I may have a surprise and it be far higher. No percentage can be reliable though as the difference in an Island Packet and a Beneteau is that the IP may be a better boat, but the materials are also more expensive to fix. Beneteau is more common, so the same quality as the IP may be cheaper due to there being so many more owners. I find that value in Lagoon. I bought what would have been $5,000 to custom design (helm panels) that were $826 delivered from France (all in cost). If you're new to a big boat, buy one that has lots of owners. I find the Lagoon owners group on facebook and the plethora of knowledge on sites like this to be amazing and incredibly cost saving verses when I had a privilege and couldn't find anything except custom solutions. Privilege is a stronger boat. Lagoon is far more common. I would recommend you plan to spend 25% on year one on your boat, 20% on year two and 15% thereafter. If that's your budget, you'll be able to almost always come way under budget and not have the 'murphy's law' aspect of yachts/boats kill your dream. Expectations being lowered (budget being raised) and coming in lower changes the ownership from painful to enjoyable. I've had lots of first year and second year BS but I expected it by going into the ownership with my eyes open and expectations in line. Boat brokers set lower expectations so they can sell you too much boat and inflate their already high commission.

[carstendenmark]

@ Sailbrandison :
And that is exactly why I have a 29' solid no-nonsense monohull.

[barnakiel]

There is no 10%, nor 20% rule.


There is only a X % rule.


As soon as you own a boat, you will start spending money on it.


It will be dockage, boatyard, new stuff, etc. etc. etc.


What actual number you arrive at will depend on what boat it is, where you are, how much work you outsource and how much you do with your own hands, etc.


It will also depend on how much % boat value loss you envision. A boat meticulously maintained hold value better than one that got only marginal haulout now and then.


Cheers,
b.