Yacht depreciation

Robih

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I’ve just sold my boat after sixteen years of ownership. Interestingly she’s sold for 94% of what I paid for her in 2004. Total depreciation £8k. So, £500 per annum depreciation. Not bad. That ignores money inflation of course and is a simplistic view as it ignores the cost of capital but nonetheless I have no room for complaint. We’ve had a fantastic return on capital in fun. Priceless.
 

scruff

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I’ve just sold my boat after sixteen years of ownership. Interestingly she’s sold for 94% of what I paid for her in 2004. Total depreciation £8k. So, £500 per annum depreciation. Not bad. That ignores money inflation of course and is a simplistic view as it ignores the cost of capital but nonetheless I have no room for complaint. We’ve had a fantastic return on capital in fun. Priceless.

Very much in the realm of man maths but I approve whole heartedly!
 

HissyFit

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You paid £133,000 approx. for an eight year old boat, and sold a 24 year old boat for £125,000 approx. I can honestly only conclude that you are not including refurb costs and that you found both a desperate seller and buyer. If not, chapeaux.
 

Robih

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Well yes, there has been refurb over the years but I always exclude such costs as I take the view that refurb costs are never recoverable, it is simply maintaining the boat and therefore maintenance cost. Much like mooring costs it is part of the running costs. If there was significant enhancement expenditure maybe that’s different.

The boat is a Nauticat, much in demand in northern latitudes, with sterling’s weakness bringing strong demand from overseas buyers who see UK boats as good value in their domestic currency. This demand only being softened by COVID 19 travelling restrictions.

I posted this because it rather disproves the theory often expounded here that boats are never assets, only liabilities, and I don’t entirely hold with that view.

What are liabilities for sure is teak decks. As a boat ages teak decks become an overwhelming negative. Our ex-boat doesn’t have teak decks and it was a significant positive in the sale of her. Twenty five year old boats with teak decks are inevitably a nightmare in the making. New boat buyers with a bag of cash have a moral responsibility to think of a) the teak stock in Burma and b) the poor devil who’ll be buying the nightmare in twenty years time. Don’t specify teak decks!
 
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john_morris_uk

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You paid £133,000 approx. for an eight year old boat, and sold a 24 year old boat for £125,000 approx. I can honestly only conclude that you are not including refurb costs and that you found both a desperate seller and buyer. If not, chapeaux.

I think that’s a little jaundiced. I’ve had the privilege of sailing on Robert’s boat a couple of times and Robert and his wife did keep her in very good condition.

However I’ll give a few examples of boats we’ve owned.

I bought a wreck of a South Coast One Design for £2,400 and rebuilt her. Despite putting a new engine, new rigging and new sails on her I still recouped nearly all the cash I’d spent when I sold her for around £10k. (This was twenty plus years ago when a new Yanmar 1GM10 was between one and two £k. Obviously I’m not accounting for the many many hours of work I put into it.

Our next boat was a Sigma 33 which we bought for £25k and sold three years later for £25.5k

I’ve never expected my capital to appreciate when put into a boat, but our experience is that it hasn’t depreciated very much.

I’ll only buy a new boat if I win the lottery and I’ll then expect to lose money in depreciation.
 

Birdseye

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I’ve just sold my boat after sixteen years of ownership. Interestingly she’s sold for 94% of what I paid for her in 2004. Total depreciation £8k. So, £500 per annum depreciation. Not bad. That ignores money inflation of course and is a simplistic view as it ignores the cost of capital but nonetheless I have no room for complaint. We’ve had a fantastic return on capital in fun. Priceless.
Glad to hear it. But you must have chosen well. If my maths is right you paid £130k for the boat in 2004 so clearly not a typical yacht. Mine is middle ranking quality wise and I reckon that if I sold her now, I would have lost close on 30% since 2009. It will be the first time that I have not botionally made money on a boat and I reckon its a bit more representative than your situation.. Indeed, the boat I sold in 2009 to buy the current one has gone down by more than 20%

One factor you mention is a powerful one. All my boiats have been British built and that is a negative in todays market dominated by French and German brands. People in the EU buy makes they are familiar with. I have seen Westerlies for example selling at way less in France than they would in the UK.
 

Bobc

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I bought my boat new in 2003. I reckon it's now worth about 20% less than that, which is pretty good going.

I think that if you buy new and only keep them for 5 years or less, you lose big time. After about 10 years they seem to stop deprecating because inflation builds the gap to a new boat.
 

Buck Turgidson

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I bought mine 3 years ago and she's worth more now than the price I bought her for. No where near the cost of all the renovations though which are well over the purchase price. :) She's not for sale.
 

HissyFit

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I think that’s a little jaundiced.

I certainly didn't intend to be, but even for what is usually considered to be a "well maintained boat" those figures just didn't tell the whole story. It would be instructional to discuss the continued desirability of some makes of boats over others.

Edit: re-reading it, it did come across a little short for the humour intended.
 
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Inflation since 2004 has averaged 3% per year according to the Bank of England calculator. So quite a loss really when either price is converted to money of the day. Still it feels good, unless you live in Venezuela and need to buy a loaf of bread. ?
I like man maths, if mumbled fast enough when LadyOldBoots is busy I can delay the inevitable discovery.
 

john_morris_uk

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Inflation since 2004 has averaged 3% per year according to the Bank of England calculator. So quite a loss really when either price is converted to money of the day. Still it feels good, unless you live in Venezuela and need to buy a loaf of bread. ?
I like man maths, if mumbled fast enough when LadyOldBoots is busy I can delay the inevitable discovery.
The code you need to mumble regarding any boat expenditure is “essential safety item”. ?
 

john_morris_uk

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I certainly didn't intend to be, but even for what is usually considered to be a "well maintained boat" those figures just didn't tell the whole story. It would be instructional to discuss the continued desirability of some makes of boats over others.

Edit: re-reading it, it did come across a little short for the humour intended.

There’s an interesting discussion to be had regarding the desirability of some boats. I’ve always made sure we bought a boat that was ‘in demand’. I bought the SCOD because it was a genuine Camper & Nicholson built one and the design is very recognised and has a small but loyal following.
 

Frogmogman

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It would be instructional to discuss the continued desirability of some makes of boats over others.

It would indeed.

Here is an interesting little item in the latest classic boat comparing the sale prices of a small Riva and equivalent Chris Craft.

022E1EAB-8D82-4310-ABFD-90273E097876.jpg
 

Robih

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Inflation since 2004 has averaged 3% per year according to the Bank of England calculator. So quite a loss really when either price is converted to money of the day. Still it feels good, unless you live in Venezuela and need to buy a loaf of bread. ?
I like man maths, if mumbled fast enough when LadyOldBoots is busy I can delay the inevitable discovery.
Continuing the man maths theme - I don't see it as a "loss" as you have phrased, rather as the cost incurred in having sixteen years of fun - cheap. Holding an Woodford Equity Income Fund - that is the definition of a loss.....but that's another matter and yes I am bitter and twisted about it....
 

john_morris_uk

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Continuing the man maths theme - I don't see it as a "loss" as you have phrased, rather as the cost incurred in having sixteen years of fun - cheap. Holding an Woodford Equity Income Fund - that is the definition of a loss.....but that's another matter and yes I am bitter and twisted about it....
I can’t comment on the equity fund but I take the same attitude to boating costs. Despite having a very reasonably priced mooring, it costs us several thousand pounds in cash each year to fund our sailing. In addition to the maintenance costs of antifoul etc we typically spend another thousand or two on an upgrade. (New plotter one year, AIS transponder another, eberspacher heating system etc amongst many other things added over the years) This year’s been expensive because we had new rigging and a whole load of work done but we don’t have fancy foreign holidays because we usually just go sailing. When I compare what we pay and the pleasure we get with what friends and acquaintances pay out for skiing and a couple of weeks in some fancy resort, I stop worrying. As I am wont to say, ‘Life is full of choices’.
 
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