questions about maintainence and costs

[houcruzer]

All,

I am in the investigation stage and have lots of questions. My wife and I both are getting the dream to sail away. We live in Houston and are starting to go down to the marinas and look at boats on the coast. We are trying to figure out which way to go:

1 - stay on land and buy a used 36-38' power yacht to spend weekends on and occasional week long coastal trips. We could do this in the next year or so.

2 - go off shore and sail down the Caribbean, living on board. We could do this in about 4-5 years. Thinking if we do that we would look for a 34-38 cat because a) I need the head room (6'3") and like the idea of stability over a monohull. However, I am not married to that idea.

I realize that this is an individual preference, but I would like to get some feedback from others who have faced a similar choice and what you found as the pros and cons.

Also, I am not in the least bit mechanical, which scares me to no end in thinking of buying a boat and living off shore. How difficult is it to go from non mechanical to being able to maintain a boat.

Thanks in advance for your advice and thoughts.

hc

[LtBrett]

Well, that's a pretty open ended question. As for costs, the ballpark estimate I've heard for maintenance is 10% of purchase price per year. I've spent about that, although you would probably spend less if you bought a newer boat. I have a 38' LOA powerboat and I spend about $10k per year for dockage (summer dockage and winter haulout). I burn about 35 gallons of fuel per hour cruising around the Long Island Sound. Dockage in overnight ports is about $100 per night. I have an older boat, so I've spent a whole lot of money upgrading and customizing it, in addition to the costs I've mentioned. I live near the boat, so I have done a fair bit of the work myself. Mechanic rates are about $100/hr for the stuff I don't want to do. I get my Caribbean fix by chartering a cat every winter for a week. Figure about $10k for that, although you could do it for a whole lot less.

So as for your option 1, I would suggest getting the smallest boat you can comfortably spend a week on. Get something new enough such that you won't have to replace a bunch of stuff, or old enough such that it has already been overhauled. Make sure it is a popular boat so you can resell it as you better define your needs. Don't forget the learning curve you will face will be pretty daunting. Once you get into the size of vessel you can spend a week on, you really need to be a pretty good seaman.

Brett

[Boracay]

I am using a figure of 25% of real market value (what the boat would actually sell for) to roughly figure out my boats running costs. Marina/mooring, living and direct operating costs are extra.

My calculation runs 12% lost investment value, 7% depreciation, 6% maintenance.

The 6% maintenance is what people notice but the lost opportunity cost and the depreciation have to be paid for eventually.

Boat ownership is so expensive ($30k+ pa for a $100k yacht) that it is not cost effective unless it is in constant use.

I brought a project boat as I needed a low impact trainer to introduce my wife to sailing and as a post retirement hobby but a series of charters would have been cheaper.

So unless you have a current need for a boat I would not buy one. Charter is way more cost effective for part time use.

[Ex-Calif]

Boracay - Just curious as to the difference between lost investment value and depreciation.

Are you saying that if you left the money in the bank you'd earn 12% and that the boat loses 7% value per year?

Do you think there is a floor value on the point at which point there is no more depreciation (or at least next to zero)?

[Lancerbye]

If it were all about dollars and cents, 99% of us would never get a boat.

[Boracay]

Depreciation is the amount by which the value of a boat will go down over time.

The value of a boat will tend to drop each year to a point where it has negative value (have to pay someone to take it away). The maintenance required will tend to rise each year until it becomes prohibitively expensive.

Counter examples normally run along the lines of an axe (an asset) that has had numerous handles and heads (high maintenance).

Lost value is the return that would have been gained had the money not been spent in buying a boat.

It is greater than bank interest as the money could have been spent to prevent expensive problems (reliable car, medical procedures, education etc.), to purchase appreciating assets (real estate, businesses, shares etc.) or to take advantage of a beneficial situation (e.g. the forced sale of a high quality property).