Sell house, buy boat or vice versa?

[TheKraken]

Hello all,

My wife and I are trying to relocate to a boat by 2025. Without getting too mired in the financial details, I just want to know from those who have "sold everything" and moved to the liveaboard life...did you sell your house and use the cash to buy a boat, or did you leverage your house to secure a boat loan, sell the house then pay off the boat loan?

My wife is of the mind that we sell the house and rent a place on the USA east coast (we live in Colorado right now) and shop for a boat (we are well within budget to do so) while I had suggested the latter (get the boat loan etc.). What have you done and what do you think is the better path? Either way there is an outlay of cash (rent into a wormhole for a place we don't have any equity in, down payment and interest if we get a boat loan instead while trying to sell the house) as my inexperienced eyes see it, but I just wanted to pick your brains.

Thanks ahead of time!

Aaron

[George_SD]

A friend of mine bought a new boat for cash, but under a business he owned, put it into a charter program where he gets to have it almost any time he wants as long as he schedules it ahead of time, but otherwise it is available for charter. This allowed him to write off quite a number of expenses and minimize certain tax implications. He then refinanced it (when the rates were very low). The boat pretty much paid for itself. He is now retiring, keeping a very expensive home (for now) and plans to travel on the boat. He may end up renting it out, since the mortgage and interest rates are very low from a few years ago. This keeps him the house, generates positive income while someone else covers the mortgage, lets it continue to appreciate.

He may sell it later once he feels he needs the funds to support him through the later portions of the retirement.

[LarryDW]

I found my boat, made an offer, signed the contract which was hand written on a piece of paper. Sent the deposit check in a week or so. Sold my condo roughly 2 months later. Used part of the condo money to buy the boat. Moved onto my boat same day as closing on the condo. I sold just about everything. A year later I cleaned out the storage unit, sold, gave away everything, but my tools. I brought them to my daughter.

[Ryban]

As a member of one of those generations that started earning money after the housing market became more or less inaccessible, I'm grateful that it was a trivial matter to sell all my stuff and move onto a boat.

That said, if I owned a house now and had owned it long enough that selling it would be a financially sound choice, I would probably opt to sell and re-invest the money than try to rent it out and (presumably) pay a management company to manage.

[wyb2]

Lot of variables.

But the way I’m reading this, in one situation you move 2000 miles, then start shopping for a boat. But in the other situation you buy the boat while living 2000 miles away. Seems like which one of those paths you want to pursue is going to be the deciding factor.

But if comparing apples to apples, it’s almost guaranteed to be less expensive to unload the house sooner and not be paying taxes and maintenance on it, plus not paying interest on a boat loan.

[Greg Brannon]

Similar to wyb2, whichever path you choose, whether you or the boat moves, I recommend that you are living close to the boat you buy until you, the wife, and the boat are ready for the transition to move and live aboard. Don't force the move to abandon life ashore for a live-aboard lifestyle until you and your wife are sure you and the boat are ready.

The plan you have outlined has many HUGE life changes and variables that will be a source of discomfort and possible conflict that require careful and thoughtful management. There are those who say, "Go for it and don't look back," but I don't recommend such a casual approach.

My perspective is from an older guy and wife that have lived a mostly comfortable life. You and your wife's age and experiences have been different, but significant life changes are difficult, more or less so, depending.

Clearly communicate plans and expectations and be considerate of each other during a transition of this magnitude. Move as fast as both of you agree is acceptable.

Greg.

[Chotu]

i’m with Greg here.

this is a lot more about an emotional situation than it is a financial situation.

Reading the post by George above, I couldn’t believe that setup. That would be the worst case scenario for me. I couldn’t imagine having my boat out for bareboat charter while I'm actively trying to use it. that’s like putting your wife out to charter lol

in any case what I am saying is discuss the lifestyle and stressors with your wife and figure out what path will feel easiest for you. Emotionally and practically. Don’t worry so much about the finance side. You can make a mistake. That’s not a big deal. If you make a mistake in the logistics and the emotions and the stressors involved, you’re going to have a bad time. And that will sour you on the whole thing. Or it might just sour her on the whole thing. Either way, that’s not what you’re trying to do.

Keep in mind what a hassle it is to rent out a place. When somebody smashes the wall out or whatever. Collecting rent when somebody doesn’t want to pay. Flying back for eviction proceedings.

Simplifying is what you want in my opinion. But that’s my choice and not yours. Go with what your wife wants mostly.

So make the right choice not from the spreadsheet, but from the easiest path and what you both want to do with your time and life.

PS: Don’t forget buying a boat from a distance can be pretty expensive as well. It might add up to the same as a couple months of rent easily. You have a lot of flights involved. A lot of hotels. These things are not cheap these days. there will be a number of boats you see that you won’t buy. That's another wormhole

[Grith]

Third Option
Sell relatively expensive house in a good location and buy a ridiculously cheap waterfront house with jetty in remote unknown location and a cruising oriented big trailer sailer and camper on a tow tug and retire early to sail and adventure travel on the balance of the funds!
Keep a home base and tow a small yacht to desirable cruising locations and home again when had enough of yachting/travelling life for repairs and recuperation.
We did it.🙂

[jordanbigel]

Originally Posted by TheKraken

Hello all,

My wife and I are trying to relocate to a boat by 2025. Without getting too mired in the financial details, I just want to know from those who have "sold everything" and moved to the liveaboard life...did you sell your house and use the cash to buy a boat, or did you leverage your house to secure a boat loan, sell the house then pay off the boat loan?

My wife is of the mind that we sell the house and rent a place on the USA east coast (we live in Colorado right now) and shop for a boat (we are well within budget to do so) while I had suggested the latter (get the boat loan etc.). What have you done and what do you think is the better path? Either way there is an outlay of cash (rent into a wormhole for a place we don't have any equity in, down payment and interest if we get a boat loan instead while trying to sell the house) as my inexperienced eyes see it, but I just wanted to pick your brains.

Thanks ahead of time!

Aaron

We did what you describe - got a loan for the boat using the house as collateral, spent a year refitting the boat while living in the house, then sold the house and used the proceeds to pay off the boat loan.

However, our home was in the Seattle area, near the ocean, not in Colorado. I am not sure this approach makes sense in your situation.

There are so many variables.

[steffan]

We sold our house this month. We are holding the proceeds in fixed-income investments until we buy our saltwater boat in 2025. In the meantime, we're living between a cheap RV and our current boat on Lake Superior. Currently paying to rent a camping spot for the summer but will be boondocking in the south during the hard water season. Still way cheaper than home ownership. If we can find what we want in a saltwater boat in NA we figure we can drive the RV right up to it when the time comes.

[Cheyne]

We bought our boat then sold our house. The first year we stayed at the house for a few months, but mainly on the boat. Second year we went to the Bahamas and found we only spent 10 days in our house that whole year. So off the house went. We just finished off our last of our storage unit. We put the money from the house into long term investments.

[Srpulpo]

I too thought about selling my paid off house but it can provide rental income so I cashed out 401K stock to buy a boat. the house will keep going up in value and I can sell anytime.

[Senojev]

Buying boat on the east coast while living in Colorado will be tough and expensive unless you have lots of air miles.

When you are both convinced the time is right to start looking at boats, put the house on the market, hopefully sell it quickly, downsize to the essentials, store whatever else you may want post boating. Move to East Coast and start hunting. You should have already developed your list of must haves, nice to haves, and size/mfr. worked out. Do not sell the house until you have this list nailed down.

Depending on your circumstances, being mobile would be an advantage to boat hunting as the East Coast is several thousand miles long. Pick a reasonably priced rental somewhere central and be prepared to move close to the boat if one turns up as you will undoubtedly be investing time and money getting the boat up to your standards.

[JPA Cate]

Here are some things you don't know yet:

1) whether or not either of you is prone to seasickness [if a history of carsickness, yes]

2) how the two of you will work together when things go wrong at sea

3) how the two of you will deal with separation from friends and family

Those things are things you can find out by doing, not just dreaming about, but going out and sailing, intentionally when it's "bad weather" and learning about yourselves and learning your routines for reefing in a hurry, tidying up the lines, etc. Then you learn about how different kinds of weather and sailing situations affect the two of you. Your good lady wife needs to know everything necessary to get the boat safely to shore if something bad happens to you, for both your safety; and you also need her to know all that so that you are comfortable to sleep when she is on watch. For these reasons, it is best that she learn separately from you, so different courses taught by different instructors can be a really good deal because you can compare what you learned and work out what works better for you.

In your shoes, I think you should sell the home, but buy another (or a city condo that could be rented out while you cruise to avoid the "wormhole") move to somewhere there is good sailing and you share values, perhaps WA State? or the SF Bay area [good reliable winds, good sea access] Live, work, and get a 27-30 ft. boat and sail in all weathers while you have a hot shower and good take out food to come home to. After you see how it goes, see if you still want to "go cruising"; it really isn't for everyone. And you haven't risked the [perceived] security of retirement.

After 20 yrs. of being retired, sailing, and cruising, you may want a change, and a home to go to or exchange for retiring elsewhere. (like if you want to go back to CO)

What you think you want to do is a total lifestyle change, very much outside the norm, and many people will advise you against it. There will be unintended consequences. That's how life is: by choosing A, you automatically un-choose B-Z.

Good luck with it.

Ann, long term cruiser

[bjn68]

Originally Posted by Grith

Third Option
Sell relatively expensive house in a good location and buy a ridiculously cheap waterfront house with jetty in remote unknown location and a cruising oriented big trailer sailer and camper on a tow tug and retire early to sail and adventure travel on the balance of the funds!
Keep a home base and tow a small yacht to desirable cruising locations and home again when had enough of yachting/travelling life for repairs and recuperation.
We did it.🙂

Where can you buy "a ridiculously cheap waterfront house with jetty in remote unknown location"??? This was my plan but every where I looked, any property, even a broken shed, near the water has a HUGE price tag!