Asset or liability

[steveej]

Boats < 20 years old are a slowly depreciating asset as there is generally some value in them commensurate with the other costs entailed in ownership.

There are 4 distinct prices when it comes to boats. The Purchase price, the cost of initial refit and incidental equipment to make the boat operational, the costs of ongoing repairs and maintenance and the cost of parking it.

Condition and location of the vessel have a significant impact on how these costs vary.

My first boat, a 1986 Hurley 22 was purchased for 2k, spent another 2k on refit and sold for £2.5k. There wasn't a lot to go wrong with it, if the outboard goes wrong, you can just buy a brand new one for 1k, a re rig is not expensive, there was no osmosis. It has many years of life left but in the grand scheme of things it is not worth anything. Another 2.5k was spent to make the boat operational with life jackets, charts, dinghy and outboard etc but I took that with me when I sold it. It also cost me 2k that year to park it.

The current 2003 AWB is a slowly depreciating asset, a good purchase price but significant spend on initial refit and ongoing maintenance. If anything was to happen to me it would quickly turn into a legacy liability simply because the family wouldn't have a clue how to look after it or sail it. Even though it's value it probably 20 times that of the Hurley 22 in its current state, if it is left to rot then the boat devalues quickly in my opinion.

 

[steveej]

Having said all that, last weekend I took my Mum to Falmouth for the weekend. She enjoyed herself and we created some memories before she is too old to do it.

Can't really put a price on that other than it being excellent value for money as far as I am concerned.

One of the great things about ownership is that you can open the experience up to friends and family. Albeit it is you paying for it, when you then start looking at cost per head it definately makes the costs more palatable.

 

[NormanB]

It’s a grim future for boat ownership - the pool of potential buyers is dying.
Younger folks are not interested in owning an asset, hence the prevalence of car leasing schemes for non business customers.
For these working people chartering a yacht is more cost effective and suits those who want to sail rather than to do boat work.
There will be a small cohort of those either near or in retirement, who have an interest in buying a fibreglass shed

 

[Balbas]

It’s a grim future for boat ownership - the pool of potential buyers is dying.
Younger folks are not interested in owning an asset, hence the prevalence of car leasing schemes for non business customers.
For these working people chartering a yacht is more cost effective and suits those who want to sail rather than to do boat work.
There will be a small cohort of those either near or in retirement, who have an interest in buying a fibreglass shed

I suspect that this is true. Mind, there may be some upsides - more moorings may become available at low prices - you're not going to get a charter co having their asset on a swinging mooring or a trot...

My personal circumstances - I'm a new yacht owner, we've had her less than a year. I bought at the cheap end of the market because I've got young kids (and therefore no money!), a big mortgage and lots of other expenses. Our boat looks a bit ropey, but now I've done a lot of work to her, she's sound and sailable. Still not worth anything, but If I spend this winter sorting out the cosmetics, I may have a boat that's worth more than I paid for it. Which would be nice. Factor in the time and the materials though and...

I suspect an old Westerly is only ever going to be worth peanuts now, but Im getting more than monetary value out of it. The kids dressed up as pirates this weekend for our sail to Salcombe, my wife is getting excited about the possibility of going to the Scillies- the cost of which for a week with the family if we tried to go in the school holidays and stay somewhere, would outweigh the price I paid for the boat!

So, liability - probably. The bills certainly keep rolling in, and it's not worth very much at all. But looked at in the wider context, it's still good value at the moment.

Should it ever need disposal though, it's a good question. As we're all becoming more environmentally aware, the days of abandoning boats will surely come to an end. My only hope will be to keep it in good enough condition that my kids will want to take it on whenever they're old enough - if nothing else it would make cheap uni accommodation! Or have it in good enough condition that someone wants to take it on. I don't think there's much point in expecting it to sell for much!

 

[johnalison]

I don't know how much my HR will fetch when I finally get old and have to sell it, but it will at least make something. If I want to cheer myself up I can tot up how much it would have cost to charter a boat for the three months each year that we have mostly spent on her for the last twenty years. Alternatively, I can try and estimate the cost of taking the family on holiday, maybe abroad, each year when the children were young to teenage. On the whole, I don't think we have come out of it too badly.

 

[Alskade]

It’s a grim future for boat ownership - the pool of potential buyers is dying.
Younger folks are not interested in owning an asset, hence the prevalence of car leasing schemes for non business customers.
For these working people chartering a yacht is more cost effective and suits those who want to sail rather than to do boat work.
There will be a small cohort of those either near or in retirement, who have an interest in buying a fibreglass shed

They might not think asset but I think they do think lifestyle....plus there seems to be more younger people living aboard than before.

 

[Graham376]

I don't know how much my HR will fetch when I finally get old and have to sell it, but it will at least make something.

Yes, of course it will still be a desirable boat but, in common with other similar types, value to a large extent will depend on deck condition as replacement costs around £40k. I think there will still be a market for old Westerly, Moody, Sadler etc. which, despite their age are still popular and relatively cheap, even taking into account cost of updating. What the market will be like for mass produced boats, I don't know. Not because they're no good but there will be thousands out there competing against each other.

 

[LadyInBed]

Is your boat an asset or a liability?

Neither, it's an amenity