Struggling to understand the rule of thumb for boat depreciation

[kmd314]

Hi like many threads I am new to sailing and am pondering centre cockpit bluewater cruisers circa 39-43ft, with max budget of $145k.

I have found a 1979 swan that could be a contender but, am struggling to understand the rule of thumb for boat depreciation. The boat was refurbed 2012 to do another circumnavigation so most of the kit onboard is now 10 years old. It passed to current owner 4 years ago for circa $115K and now they asking around $90k for her. I know swans hulls are solid glass and she will need a re-fit but, I am struggling to understand how the value is ascertained in a 42 year old boat as there doesn’t seem to any definitive guides?

[Lake-Effect]

Originally Posted by kmd314

Hi like many threads I am new to sailing and am pondering centre cockpit bluewater cruisers circa 39-43ft, with max budget of $145k.

I have found a 1979 swan that could be a contender but, am struggling to understand the rule of thumb for boat depreciation. The boat was refurbed 2012 to do another circumnavigation so most of the kit onboard is now 10 years old. It passed to current owner 4 years ago for circa $115K and now they asking around $90k for her. I know swans hulls are solid glass and she will need a re-fit but, I am struggling to understand how the value is ascertained in a 42 year old boat as there doesn’t seem to any definitive guides?

The rule of thumb is that there is no rule of thumb for boat depreciation; boats are too different, and even between two of the same model, their conditions could be night and day, all depending on who owned them and how they were used/abused. And whether that model is in demand or not. And how badly you want that model, or that boat. And the owner's mood on the day you make an offer.

A boat's value is what someone is willing to pay, or what insurance would give you if it was totalled or lost. All you can do is research and look at a lot of boats, to learn what's out there and the price ranges. Or hire a decent broker to do so on your behalf.

[Shrew]

Originally Posted by kmd314

I am new to sailing and am pondering centre cockpit bluewater cruisers circa 39-43ft.......

There is no rule of thumb for depreciation. Maintenance slows the freefall, but ultimately the market and how much someone is willing to pay will dictate the market value. There is no formula.

[Sailing August]

A sail boat is only worth what someone is willing to pay for it.
Many owners are emotionally attached to their vessels and when it comes time to sell....they believe their beloved vessel worth more than it really is.
Make a list of EVERYTHING you will need to do and spend to bring the vessel up to par.
Subtract that from the asking price.....then subtract another 5% and make that your offer. Eventually someone will say yes. Don't over pay. There are a lot of boats out there. If the owner get offended and says no....just move on.
Many of these people do not live in reality.

[LouK]

Won't argue w/ previous posts but you may be in for a rude awakening when you find that your insurance company will only write a policy to cover 1/3 of your cost- check first!

[kmd314]

Thanks for the feedback, it now makes sense why I couldn’t find any structured comparison guides

[alaskanviking]

This subject and has a lot of grey area. you have to get the housing depreciation/valuation out of your head. when it comes to boats, every one of them is different and you have to approach each boat and location as a unique situation.

when I was initially looking, going on Yacht world and looking up comparables help a little but realistically only to be uses as a guideline. with a house if you replace the siding, new roof, paint ect that increases the value of the house. that stuff would have degraded over time anyway but end affect is a positive increase to the value.

With a boat you can strip all the systems out, put in new stuff and the boat MAY possibly be worth as much as you bought it for. if you don't do the maintenance or have old gear it can be detrimental and drop your value considerably. this doesn't even start to cover other issues like deck fitting bedding going bad and resultant leaks, engine or generator hours with high hours ect. boat maintenance is really expensive an engine or genset replacement can be $14k-$50k or more, that's a new car.

i did see some vessels that had increased value but they are few. at the time we were keen on Formosa 50's (yes - Captain Ron). looked at every one of them and thier copys from San Diego to San Franscisco. seen prices from $30K to $250K. the higher ones had been extensively gone through, it had restoring rotted wood beams and structure that affects these leaky teaky's, new paint, new gear, new engine ect. pretty much turnkey restoration. it had added bow thrusters and maybe AC. BUT I didn't see a lot of movement on that boat while the cheaper ones were moving decently fast. we were in contact with several of the owners and my wife at the time was cyber stalking several. the majority of them at the time were in a small range around $50K, didn't have many extras or electronics, an would need to be completely gone through. it was pretty clear that it didn't matter how old or what gear was onboard.

My current boat, looking at the documentation history it originally sold for $150k, and all the owners including myself paid ~130K. no extras, same gear, I have done more upgrades than previous owners. i am on the owners forums and the sister boats are selling around $100K although I seen a few in the $80 range. most of them are no frills with basic systems, older electronics ect. i think MAYBE i could get $130k if i ever wanted to sell. I have also put $50k+ into it. defiantly not a nest egg building retirement strategy LMAO

Hope that helps, not an easy to answer subject. i do know that regardless find who te best surveyor in your area is, make sure he isn't connected with the brokerage, and have a detailed and full survey done as part of the purchase condition. also pay to have a rigger survey the rigg and a good mechanic survey the engine. its worth your money and likely give you a little negotiating power, or at least you will get enough info to see how much you will have to repair or replace and if its worth it for you. $1000 or so out of pocket is better than trying to re-sell a moneypit no one wants.

[Katapult Mike]

Here's a handy rule of thumb:

A BOAT IS A HOLE IN THE WATER INTO WHICH YOU THROW MONEY!

The market is inherently inefficient. That is a good thing if you are patient and smart. Shop around, find boats that have been well maintained and have most of the gear you want, and "engage in a course of price discovery," as they say in Econ 101, by making offers.

With luck, you will get a "good deal" on which you will proceed to spend a lot more money than you thought you would, and with some more luck, you will eventually sell it for close to what you paid originally (but never close to what you paid originally + upgrades).

[thinwater]

On the other-hand... I've never had a boat I didn't sell for more than I paid for it 10 years later.

Not fixer-uppers, just models that were uncommon and in demand. Well-maintained, with a few thought out and carefully installed up-grades. Yes, some money had been thrown at them. You never count that.

An AWB can simply be too common to support a good price for a good example, and another may be priced far to high for actual condition.

[boatpoker]

Take a look at- Boat Values ... A crap shoot

Then take a look at the valuation statement in my Sample Survey Reports

If you want depreciation tables, google Martin Depreciation Scale. This is what the ASA teach ... they used to work but are now meaningless as are BUC and NADA (well those two have always been useless)


and finally .... realize the covid world has gone mad and I can't believe the prices people are paying for crap.
There are boats in Ontario listed for double what they were worth 20yrs ago ... and people are buying them !
You're on your own !

[sailorboy1]

Originally Posted by kmd314

I am struggling to understand how the value is ascertained in a 42 year old boat as there doesn’t seem to any definitive guides?

By how much people like you are willing to pay and how much sellers are willing to accept. Thats it!

[Dr. D]

The market is fickle and flighty. We had recently considered selling our boat which is only 3 years old. I thought we might get 70% of the original price. Nope, lots of people are still looking for boats, so I could get in the neighborhood of 90%. We decided against selling, but for other reasons.

[Rohan]

Depreciation on boats is not like a car or a house. There isn't really a Kelly Blue Book listings of prices for used boats, because boats are much more customized. And it's not like a house where no matter how bad the house is, it's at least worth it's land value. The value of a boat can drop to zero - or even negative, as someone might even pay to get rid of it.

Basically, like anything new, a new boat depreciates in value quickly after you buy it, but after a certain age the prices level off and don't really go lower as long as it's maintained and seaworthy. In fact, an old boat from the 1970s can significantly go up in value if it's been restored well and electronics are updated.

[Chotu]

1979 Swan?

The depreciation is mostly wrung out of it already. It’s old.

But as everyone else said, there are no depreciation rules.

[boatman61]

Depreciation rules are simple.. can you afford to lose it and not cry.. boats will depreciate all the way down to when owners struggle to give them away..