Considerations for Resale

[diverdr]

I guess I should calculate at least a 10 percent loss even if buying at a great price and being a meticulous owner. Boracay, after closing over 1000 deals I must agree, people buy with their eyes for sure. Witzgall, so true. I've heard so many times that I just did the brakes, or new tires, or car starter. I just smile. Still worth the same, it is what it is. Best to strip your goodies (as I do with my bikes) and sell separately.

[thinwater]

... is that if you buy a used boat of a popular and well respected make in "good" condition and maintain and occasionally up-grade as needed, you can expect to sell it for what you paid. You lose the inflation (time value of money) and you lose all of the maintenance and minor up-grades. You gain 10 years of use.

Personally, I believe one of the most practical and predictable approach is to look for a boat that has a good resale track record and probably a good reputation for durability. You won't find a "steal", but you will find buyers and you won't regret the purchase or become "owned" by the project boat that will never bring a fair price. You may pay more than you hoped, but it will come back to you in a number of ways.

[diverdr]

well said

[Curmudgeon]

My view is, find a well-built boat that suits your needs, maintain it well and keep it forever. Let the executor of your estate worry about resale value.

[maxingout]

I would not take out a home equity loan to purchase a sailboat. I don't consider a sailboat an investment. You can lose it all in a couple of minutes, and the cost of insurance and maintenance are significant. If you look at a yacht as something on which you will get your money out, you will likely be disappointed. I have had lots of yachts, and I never got my money out on a single one. I did have some nice adventures, and the cost of the yacht is the price of those adventures.

Whenever anyone tells me they want to get their money out of a yacht purchase, I advise them to not purchase a yacht. That's like trying to get a multihull that's guaranteed not to flip, or a monohull that's guaranteed not to sink.

[diverdr]

Well, I figured insurance would protect me from the the chances of a complete loss of the vessel. (and the equity used from my house) But you have a good point. I do have excellent credit so maybe a loan would provide an extra layer of protection for the equity in my house. The loan would Require insurance, but I would have it either way. Good thought Maxingout. Thanks. Curmudgeon, I've said that about so many toys! But in reality there is 2footitiz or change of plans that are always good to be prepared for!

[Curmudgeon]

A boat isn't a toy. It's a necessity.

As for borrowing against your house to finance a boat, of course you would do that. The interest rate on a mortgage loan will always be much lower that the interest rate on a boat loan. If you have equity in your house, refinance and pull the money out for the boat. Also, the interest on a home mortgage is always tax deductable. The interest on a boat loan is only deductible if you can prove that the boat is a 2nd home or income property.

If you are worried about the "investment value" of the boat, take the difference betwen the monthly payment on your new mortage vs the payments you would have made on your existing mortgage plus the boat loan and use it to pay down the principal on your new mortgage.

[sageofsalem]

My good friend came into some modest annual money and retired early. He went to a place where there are a lot of boats (Ft. Liquordale) and poked around and found a nice little 26 footer, tidy, clean and shipshape which came with a cheap slip. He enjoyed it a great deal and made his first "open ocean" "passage" from there to the Conch Republic and on around to Ft. Meyers, then returned to his slip after many weeks and sold it for what he had in it. Improvisational and a compleat success.

He later went across from NY to the Azores in a 38 Irwin with a roof stepped mast (wouldn't have been my choice but HE DID IT on the cheap), successfully selling the vessel at salvage price in Faial?(wasn't much left of the boat, I heard)


PLEASE EVERBODY correct me if I am wrong in telling this man that this is a BUYER'S market.

I see lots of boats just like mine for sale 10 years later for a lot less money.I see many boats that I would run down and check out if I was looking to get somewhere far away safely

[David_Old_Jersey]

Main consideration is that you will be losing money...........

........the only question is how much

Of course those who practice ENRON (or Washington? ) style accounting may record a profit - from not counting everything (we all do it ).

[MarkJ]

Originally Posted by David_Old_Jersey

Main consideration is that you will be losing money...........

........the only question is how much

I think it can be held well under control. Far less than one would spend on a few weeks chartering.

I doubt the OP wants to become rich buying a $60,000 boat.

Just do it like a business transaction. Of course you will lose a bit on the trade, but the smarter you are the less it will be.

[diverdr]

More good points. I have actually written off boat loan interest as a second home before. The loan still seems better then writing a check from home equity. Here's why. Lets say the insurance company finds a loop hole to not pay(if the worst was to happen as in complete loss), with using home equity I am out life work savings. If it is a loan I default and I lose my credit rating. I did find on a couple 36' older Hunter/Catalinas in the 25-35 grand range. Considering my longest open water passage would be crossing to the Bahamas and mostly ICW and near shore sailing these seem adequate.

[MarkJ]

Originally Posted by diverdr

25-35 grand range. .

So if you dumped 50% on your sale price you would only lose $ 12,500 - $17,500 for a full year sabatical. Thats chicken feed.
I think you could do it just losing the 10% commision and fees etc: $2,500 to $3,500.

Anywhere in between is still a very cheap vacation for your family.

Mark

[Curmudgeon]

Originally Posted by diverdr

More good points. I have actually written off boat loan interest as a second home before. The loan still seems better then writing a check from home equity. Here's why. Lets say the insurance company finds a loop hole to not pay(if the worst was to happen as in complete loss), with using home equity I am out life work savings. If it is a loan I default and I lose my credit rating. I did find on a couple 36' older Hunter/Catalinas in the 25-35 grand range. Considering my longest open water passage would be crossing to the Bahamas and mostly ICW and near shore sailing these seem adequate.

I can assure you that with any boat loan your other assets will be at risk if you default. You are still liabile on the note, and they will take your house too unless there is a homestead exemption or something similar in your state.

[thinwater]

Originally Posted by diverdr

More good points. I have actually written off boat loan interest as a second home before. The loan still seems better then writing a check from home equity. Here's why. Lets say the insurance company finds a loop hole to not pay(if the worst was to happen as in complete loss), with using home equity I am out life work savings. If it is a loan I default and I lose my credit rating. I did find on a couple 36' older Hunter/Catalinas in the 25-35 grand range. Considering my longest open water passage would be crossing to the Bahamas and mostly ICW and near shore sailing these seem adequate.

If you accepted the money from the bank--no problem taking the cash--and then do not feel you are responsible for repayment.... The reason is not their problem. You made a promise. If you can't man-up your assets, don't borrow the money.

[Kettlewell]

This isn't a business proposition. I never think about resale--I think about getting the boat I want that will do what I want it to do for a price that I can afford. There is no relationship between resale value and plain old value, at least to me. I don't want to be sailing around for a few years in a boat I don't like just because I think I can sell it for a decent amount. You go to have fun and adventure, not to make money.

Remember Sterling Hayden's immortal words: "To be truly challenging, a voyage, like a life, must rest on a firm foundation of financial unrest. Otherwise you are doomed to a routine traverse, the kind known to yachtsmen, who play with their boats at sea--"cruising" it is called. Voyaging belongs to seamen, and to the wanderers of the world who cannot, or will not, fit in.If you are contemplating a voyage and you have the means, abandon the venture until your fortunes change. Only then will you know what the sea is all about."