Advice for a risk-averse couple that’s keen on their next adventure…

[dreaming_geo]

Greetings all!

Long-time lurker here looking for some (respectful) advice.

Lengthy post but here’s a summary: can you buy a boat (within a budget) and go cruising for 1-2 years without losing all your money on said boat, and can you get a decent return once finished? Or do you buy a boat you can afford to lose completely…

Full story:
In the past few years, I’ve become very interested in taking time to cruise for a year or two. My husband and I are from the US but have been working in South Australia for the past 4 years. We’ve taken RYA courses, have done some dinghy training, have chartered in the Whitsundays, and have signed up for a Mahina offshore training expedition. I’m the one really driving this idea… but my partner has been very supportive and almost keen (though worried… see below)…

We are finishing up our 2-5 year plan of living abroad and feel it’s time to head back to the northern hemisphere and find new careers (pretty burned out with our current career trajectories). I think it would be a great time to transition onto a boat before diving back into a different money making scheme… cruise for a year or so (thinking PNW to Mexico, or northeast to Caribbean), see how it goes, and then either keep going or finally settle down (we are a mid to late 30s couple with good savings but nothing to call our own..…). The husband is worried about going 'bankrupt'…. i.e. we buy a boat within what we think is our budget only to find that surprise, it needs a new engine, chain plates, tanks etc etc., burn through our rainy day money, burn through our budget, then our ‘no touch’ savings, sell the boat for 50% or less than what we bought it for… and then when we are done, we can’t afford to buy a home. I keep saying we will buy a ‘good!’ boat with good resale value, that’s a bit older but is safe and has been decently refitted for our purposes with a total boat budget of $150k (including additional refit). He’s not convinced that we won’t get a surprise money pit.

Basically… assuming we can afford monthly/yearly maintenance and living costs… how do you buy a boat (within a budget) and go cruising for 1-2 years without losing all your money on the boat itself. I’m looking at boats under 40’ that appear to have high resale value (~1990s Pacific Seacraft, Caliber, Island Packet), but I guess there’s no guarantee they will sell ‘decently’ after the 1-2 year cruise. Is this an accepted risk for short term cruisers or is there a smart way to do this? Should you buy a boat you can afford to lose completely (say more in the $50k AWB realm… which will make me sad bc I love the older boats)? Do we work while transitioning onto the boat (which means we have to stay in Adelaide), but can pay for anything that needs fixing? Do I just resolve to wait until we are ready to retire (booo!)? We are a fairly risk-averse couple, but keen on adventures and finding something more meaningful/fulfilling in life. Cruising seems like a great next chapter.

Thanks in advance, excited to hear some thoughts.

Leah

[Eric50]

Hi Leah,

As you perfectly explained, budget is paramount for sailing.

And, to be short, you can't save money with sailing...unless you smuggle drug.

One famous French racing sailor use to explain what was sailing to newbies like that : stand under a cold shower, tearing off bank notes gives you a good idea of what leisure sailing is.

Joke apart, I have the same dream than you guys and I always consider it under the budget aspect.

Needless to say that my evaluation were always greatly underestimated, by far. As well for the money than for the time.

I started to dream of it and work for it when I was 17, I am 58, I have the boat since 2002 and I am only in view of having the budget for the RTW trip in the next months.

Thankfully, I have done many others things (house, others costly hobbies as sport car...), which also explain why I did not sailed sooner (I sailed on short cruises as much as I could anyway).

I have the chance to have a decently paid job, although not consistent in the time, but it helps a lot.

One main thing to consider is to not have a too big boat, as costs are not geometrically following the increase in length, rather exponantials...by far !

If you intend to be 2 aboard most of the time and not keen on luxury, try to stay in the 35 to 40 feet range ideally.

Try also to choose a well known boat which will ease when you'll have to sell it.

Of course quality of the boat will also help, so a very reputed smaller boat may be preferable than a larger but with lower quality one.

At the end, in anycase you'll loose money whatever you try.

Choose a boat that you can maintain by yourself, in term of material in particular and do as much as you can by yourselves, you'll divide the cost by 4 easily, compare to a boat serviced by shipyards.

If you are not keen or familiar with DIY, then consider a wider budget, much wider...but consider to learn all the disciplines needed to maintain a boat, not only it'll help you "saving" money, but will be a good safety factor as well, almost mandatory for a long journey with a sailboat.

You can try making some money with the boat from time to time with paying guests, but do not count on it as a regular income.

To assess the needed budget you can find a lot of infos on the web of course, but always bear in mind that most of them are underestimated.

Make your evaluation, multiply it by 2 or 3 and you me be close to reality.

After all, if you end with more money than expected, what's wrong with it ?

Now, one good point you have in your project is that your partner is sharing the same will, which is maybe the hardest thing to solve for such adventure.

And sometimes people that start sailing for a define period just not ended their trips as planned but carried on as long as possible, it changed their lives for good...

Whishing you a good success in this adventure.

[Joli]

If you're budget is around 150 the best bet is probably a fairly new production boat like a Beneteau, Jeanneau, Bavaria, Catalina.... You really don't want anything to old because you don't know the problems you might run into.

Maybe something like this, easy to buy, easy to sell.

https://www.yachtworld.com/yacht/2008-beneteau-oceanis-40-5369842/

The items to look at would be the age of the standing rigging, sail condition and engine hours. If it was privately owned it's probably all good except for the rigging age.

Good luck, have fun.

[Fore and Aft]

dreaming_geo no one can predict what the market will do in 2 years' time. If we could I would have purchased a collection of wrecks and doubled my money while covidiots were buying anything that floated. But to minimise your losses buy the best smallest production boat with a low hour engine that you're happy to live on and don't try and improve her. If you are only onboard for a couple of years, then just use what equipment is onboard and be happy. Plenty of people go crazy with new sails, water maker, electronics etc. Before you know it, they are 50g in the hole for a boat that is still only worth 100g.
We did something similar but on a smaller scale in Canada back in 1996. We flew there paid $5000 for a fiberglass folk boat, sailed the great lakes for two seasons and then sold her for $5000. We did some routine maintenance and had to pay for winter storage but apart from that I would say we were miles in front on the cost/fun factor.
I think you are looking at the losing money thing all wrong. Yes, you do lose money if you buy a boat and never use it. But then if you use the boat hard for a couple of years then sell it for a loss have you really lost any money? You would have still needed a place to stay every night and some sort of transport. Take our folk boat in Canada we would have slept onboard for 300 plus nights and visited some great places. Even if we had given the yacht away the whole adventure would have only cost us $18-$20 a day in accommodation and transport.
Cheers

[JPA Cate]

Hello, Leah,

Welcome aboard CF.

If both of you are risk-averse, don't even think of it. Most people like to have either the funds set aside for a home when they are finished cruising, or an actual pied a terre. Also, housing costs are rising considerably, the world over.

As Fore and Aft says, no one knows what the future holds. Plus, I think the questions your husband asks make good sense. There are also the issues of routine maintenance: boats like you to show your love for them by fixing them and buying them expensive gifts.

That said, in Oz, you could probably buy a Swanson 38 or 43 in your budget, and they are quite stoutly constructed, and we've met people who've circumnavigated on them. They vary considerably as to fitout, some being a lot nicer than others. But I think a boat you can afford to lose makes some sense for a two year cruise. You could sail from Adelaide to Japan, then cruise Alaska to the PNW, and that will save thousands in air fare. Then decide if you continue living aboard, or work from the boat. If you can do the latter, then the world's your oyster, and you'll learn heaps. Mind you, the Japan-AK route is not for the faint of heart, and it will be cold. Very cold in March, the "best" month, for being typhoon free.

Ann

[wholybee]

Originally Posted by dreaming_geo

<snip> how do you buy a boat (within a budget) and go cruising for 1-2 years without losing all your money on the boat itself. I’m looking at boats under 40’ that appear to have high resale value (~1990s Pacific Seacraft, Caliber, Island Packet), but I guess there’s no guarantee they will sell ‘decently’ after the 1-2 year cruise. <snip>

The best way to protect yourself against an endless money pit is to pay for a good survey. But, also budget to refit the boat before you leave, don't buy a boat that is "ready" to go. If you do a refit, there aren't as many unknowns, as everything you replace is new. A boat ready to go has a lot of unknowns, and likely a lot of equipment that works but might not in 6 months.

I wouldn't worry about resale value as much as the quality of the boat and it's seaworthyness. You will resell it for less than you paid. Just accept that. But it might hurt less if you find a good boat that is less expensive than the high resale boats.

As an example, I bought a Morgan 382, which sells for much less than your budget. It's a well known, seaworthy boat by a reputable manufacturer and designer. But, I was able to buy the boat, and do a complete refit and replace darn near everything for well under your budget. I had few repairs during a 4 year circumnavigation. Everything was new. None of that is new anymore, and the boat isn't in near the condition as when I left, and with lots of wear doesn't "show" as well as when I bought it. So if I sold it it'll be at a big loss. But I started with smaller numbers.

[chrisr]

yes, it is possible to own a boat for a few years and not lose much on it. you may even be able to make a profit (i have done this several times over the years)

but you need to be very careful what you buy, and this only comes with many years of experience or by getting good advice.

basically you need to find a boat with 'good bones'...well built / good design...preferably run down a bit or unused...owner lost interest and keen to sell. there are actually more like this out there than you may realise - it's just a matter of looking, and knowing what you are looking for.

the other important factor of course is price. the old adage that 'you make your money when you BUY the boat, not when you sell it' is still true. almost any boat (or any thing for that matter) is worth buying : at a price. make sure you have the experience - or get the advice - to know when to buy and when to walk away. do not make the mistake of falling in love with a boat and then paying too much for it. this will only end in tears.

cheers,

[mcarthur]

One point about owning a boat is that you need to budget for ongoing boat expenses. This is often cited as being a minimum of 10% of the boat's value per year, and if taking a long-term view (or resale with something approaching similar value) could be 20% of the boat value per year. If you buy a cheaper vessel needing more, then who knows but instead of 10-20%, could be 20-30% until you get on top of the issues (or more!). If you factor that into your plans you're at least giving it a good chance.

[Sojourner]

One thing I would say is try to buy from an owner/liveaboard. If you find a good owner like we did, it was their home and they put a lot of effort and love into keeping her 'correct', as we have done since we bought our Amel. Ex-charter boats might seem cheaper off the bat, but think of them like buying a used rental car..... they've been beaten, thrashed, probably grounded more times than you have fingers and toes, and financially speaking are being cycled out of the fleet around the 10 year mark, which is about when lots of things should be being replaced on any boat of any age. You'll find a cheaper excharter bennie or jennie maybe, but as soon as you get her you might find you have to change the rigging, the sails are flogged out, engine needs an overhaul, electronics are outdated etc. And that adds up real quick.

[Adelie]

I would say you want to buy a cheap ($15-30k) older (1970-1980) boat in the range of 30’-37’. Do the minimum needed to get it seaworthy and go. It will be somewhat better than camping but nowhere near living on land.

When you are done you will probably be able to sell it for what you originally paid to but it, that is all the up grade costs will be lost.

Buying new will still involve significant upgrades and depreciation will be a huge hit.

[pressuredrop]

Get a good old cheap boat 35' max, that someone has already spent the money on and are selling cheap. They are out there and capable, you can get something that will do what you need for 25k go have fun for a year or 2 then buy a house

[Rockinar]

You may be able to sell it for what you paid. Expect to eat everything after that. If you buy a $25K boat and put $50K in it, does not make it a $75K boat. You now have maybe a $35K boat thats more attractive to a buyer. Boats are not investments.

[mvweebles]

A lot depends on your relationship and lifestyle. A friend who's company builds Bluewater boats and has launched many cruiser dreams once observed that cruising magnifies whatever is going on in your life. If you have a strong relationship with your partner, it will be strengthened. However it works the other way too.

What sounds more appealing to you: being mid-50s living in a modest house and regaling friends and family with cruising stories; or mid-50s living in a nice house discussing work-related stories?

To your specific situation, in my opinion the best way to mitigate risk is to keep working for a 6-12 months while you own the boat. Be disciplined with your budget and make sacrifices (shoebox apartment, forego meals out, cut back vacations, etc).. Getting ready to cruise has a flurry of expenses even on a sound boat. Doing it with negative cash flow is a lot of avoidable pressure. After 6-12 months you will have a much better idea of the full risk/reward equation. Not stepping off cliff needed

[valhalla360]

Particularly as newbies, it's very unlikely you pick the boat that is undervalued and sell it for more in 2 yrs. Anything is possible but highly unlikely.

Your best bet is to limit the losses.
- Keep the purchase price as low as you can.
- Get a good survey and walk away if there is anything serious (you want to go cruising not become a boat builder).
- Limit upgrades to what you really need. Safety first and then critical items to make you comfortable.

I can't predict the market but we are coming out of a time of huge price increases. Covid drove up boat prices. Don't be surprised if over the next 2-3 yrs they drop back to earth.

Also, don't forget selling a cruising boat can be expensive and time consuming. Brokers get 10% off the top and unless you undervalue it, 6-12months to sell is not uncommon. During that 6-12 months you have to pay for storage and upkeep. Let it rot on a mooring for 12 months without maintenance and you can easily cut the selling price by 50% or more.

He's right to be cautious about the cost of buying a cruising boat, particularly a short period of time like a year or two.

[Lake-Effect]

30 was over 30 years ago... (sigh)

Lots of great advice in this thread. I will only add that it's perhaps unrealistic to think that one could just stop working, and step onto a newly acquired boat for a 1 or 2 year gap cruise. Could be a great adventure though, if you can afford to lose the boat cost and pay associated costs.

Being financially risk-averse ourselves, I don't like to jump; I like to move one leg at a time, while the other is still firmly planted. For example, you might buy a boat in Oz now, but keep working for a year or so as you get familiar with the boat, make short cruises, and fix it up. Then go cruising. Or establish your new careers, then while that is working get your boat, and do the same.

Best wishes in any case.