Real costs of a 10 year old 65' flybridge yacht

[SunseekerStan]

Hi chaps, this is my first post. I currently have a 2011 Sealine F450 and want to upgrade to something bigger.

When I got into boats I was told the rule is 10% of the value in yearly maintenance. I've found that with my boat this is quite far from the case.
Here are the actual costs for me so far (average over 4 years of ownership):

Insurance ($2200/yr)
Engine service, maintenance, antifouling and cleaning with haul out ($6500/yr)
Various things that have broken and been replaced: $2000/yr
Fuel: $5000/yr
Berth: $10000/yr

This puts me at roughly $25K/yr. About 6% of what I paid for the boat.

With my particular berth I can go up to 65', and the price remains the same.

I talked to one guy in the marina with a 60' Predator from 2009 and he said he pays about $12000 for engines, maintenance and antifouling. $5000 for insurance and the same as me for the slip. Of course fuel is a variable but with this math it's not much more than my boat.

Of course his boat, like mine, is also quite old and I would imagine that a newer boat would cost less in maintenance. Less things break etc.

This is where I struggle with the 10% rule, though. I can buy a new 60' Predator for $2M or a 10 year old one for less than half of that. To me it makes no sense that the newer one would cost $200K to maintain and the old one only $75K going by the 10% rule. First of all I already know that the berth is only $10K regardless of the age of the boat, and if anything the new one should have warranty and less fuel consumption. Not that I'd ever buy a brand new boat.

Please make me understand this. I feel like often this 10% rule is being thrown about to deter people from buying boats. My (granted) limited experience tells me that it's far from an accurate rule.

I'm in a position where I have significant funds to spend on a boat (a very conservative $2M without financing and without taking much of a hit on my savings, and can easily afford $200K a year to run it if need be), but I am value conscious and like to understand what I am dealing with as far as true costs because so far it has been totally different than everyone said it would be when I bought the boat. I also don't intend to go beyond $1-1.5M on the next boat.

I would appreciate all honest answers from experienced boaters.

 

[Tranona]

You are correct the 10% "rule" is nonsense if related to value of the boat. As your figures show many of the annual costs are related to size and type of boat. Berthing costs also vary hugely from place to place. Fuel to burn rate multiplied by hours run multiplied by cost of fuel per gallon/litre. Maintenance/replacements generally rise with age and level of usage with a caveat that many newer modern boats have become very complex and require high cost technical support.

 

[SunseekerStan]

Thanks for confirming this. I have now heard from multiple people at various marinas including mechanics and owners that the slightly older boats seem to be built better than the newer ones, although it could be due to the added complexities of new technology.

That's why I am trying to find the sweet spot where you get the best value for your money and less headaches.

It seems to me this sweet spot is around 2008-2012, but I simply don't know enough about this , and being that it's a sizable purchase at $1-1.5M I don't want to make a bad move.

 

[scottie]

You might even find your perfect purchase and I hope you will however sods law says that there may well be a newer,cheaper,nicer option somewhere waiting for you to discover.
Best way to avoid making that bad move is not doing anything and that’s probably the worst move of all
Boat buying is a heart thing not working out a theorem and yes you can buy a lemon but don’t need to miss the boat either

 

[lusitano]

Should depreciation values be a part of the equation ?

 

[petem]

As others have said, the 10% rule is garbage.

 

[SunseekerStan]

I've been reading quite a few posts about depreciation and they seem to almost inevitably go sour here with judgmental individuals getting political about wealth distribution and so on.

I worked really hard for my money for decades and was diligent in saving and investing. That diligence has paid off and I am now in the position I am to be able to make this purchase.

Because I know where pretty much every single penny came from, I also don't want to throw away $1M on depreciation just to have the latest greatest tech and bigger windows. Most of my time is spent on deck and when I'm sleeping I don't need big windows. They look enticing but when you really think about the practicality it's not all that great.

Boats with a lot of moving parts like the new Galeons scare me. Not only do I get a feeling they will break more often, but also rattle underway.

As with cars there has to be a sweet spot where the age of the boat meets reasonable operating costs, with plenty of usable life left.

Currently what I'm looking at are the following boats:
2008-2014 Princess 60/64
2006-2015 Sunseeker Manhattan 60/63/66
2010-2015 Fairline Squadron 65
2010-2014 Pearl 65
2018 Prestige 630 (this one will probably drop like a rock and that scares me)
2014-2016 Sunseeker Sport 68

These seem to be in the reasonable sweet spot as far as I can tell, but again I don't know enough about this to be able to really make an informed decision.

 

[benjenbav]

Should depreciation values be a part of the equation ?

Also, perhaps, cost of finance. Irrespective of whether someone actually borrows to buy the boat, there’s still a notional cost for what could otherwise be done with the money.

 

[PlanB]

Someone earlier mentioned sod's law. My own experience of this is that something completely unexpected breaks in the engine department, and $2000 goes nowhere near it - think engine rebuild!

 

[Chiara’s slave]

Also, perhaps, cost of finance. Irrespective of whether someone actually borrows to buy the boat, there’s still a notional cost for what could otherwise be done with the money.

I’m wondering if anyone here knows what interest rate you can get on 1.5 mil. Not me, for sure.

 

[Portofino]

Also, perhaps, cost of finance. Irrespective of whether someone actually borrows to buy the boat, there’s still a notional cost for what could otherwise be done with the money.

That’s a bit Mr Scouge because if you looked at a hobby / entertainment/ pastime that way you wouldn’t do anything.
I think the mind set is with boating using disposable income not looking at it as a investment.

Having said that there are few niche boats that appreciate and certainly cars and classic bikes if you study the market .
But “ study the market “ applies to anything not just boats .
I have been fortunate with all of the above hobby purchases ended up coming out well above water ( scuse the pun ) on the .
The OP s right to jump in at the sweet spot ( study the boat mkt in his area ) and his rationale thus far seems reasonable to me .eg Why buy new with extra potential hassle , his big hull window analogy when for less than 1/2 you get almost the same boat .He’s right who cares about owners mid cabin windows, that could crack , graze over , blow the gas seal .

Also the more electrotwackery builders throw into the helm the more $$$ it’s gonna cost to maintain and have a short 1/2 life adding further depreciation pressure .

Having said all this we ( the boat hobby guys amongst us ) need peeps to continually buy new to bouy up the trickle down used mkt when the thing s 10-15 yr old and lost a shed load of value .
With €2 M I would split it , put 1/2 in property after studying the real estate mkts and 1/2 in a plastic fantastic floating apartment ( those listed by the OP in post # 07 ) AKA these days commonly called a boat .

Man mathing it by evey $ the boat looses the real estate appreciation adds a $ back .

 

[DavidJ]

Also, perhaps, cost of finance. Irrespective of whether someone actually borrows to buy the boat, there’s still a notional cost for what could otherwise be done with the money.

Ah yes! If you added opportunity cost to depreciation and finance costs you would never buy a boat.
Enter manmaths

 

[Chiara’s slave]

Ah yes! If you added opportunity cost to depreciation and finance costs you would never buy a boat.
Enter manmaths

Why bother. Just say ‘to hell with it all, you only live once’.

 

[Tranona]

There is another 10% rule that is worthy of consideration - the one that states no "toys" (boats, cars, planes etc) should represent more than 10% of your net worth, nor should it be worth more than you can afford to lose. Realistically think of it as a sunk cost and anything you get back is a bonus. You only know what the loss in value is when you sell it, and apart from ensuring it is kept in tip top condition there is little you can do to determine that loss (or gain) in advance.

If you have the capital to spare the main consideration is annual running costs which will almost certainly dwarf loss in value over the period of ownership. However there are makes and models that historically have held their value better than others, but that is market forces as much as their intrinsic superiority as boats.

The boats you have identified are sensible boats to own in the UK, but if you plan to buy in the Med a whole new world opens up. The key things to look for when buying are the obvious ones of spec, condition, service record plus the indefinable This is the boat for us.

 

[SunseekerStan]

I would be buying in the med, which is where I am presently located and have been for some time. Using dollars because that's what my money is in.

I am aware of the 10% toys rule, although it doesn't scale that well once you go past a certain level of wealth, as someone with $5M would be wise to keep their toys below a value of $500K, while someone with €50M can realistically afford more than €5M in toys.

Some places 15-20% are quoted as well. I know people who sold their home and bought a boat to live on. Granted, they didn't last long but people overextend themselves all the time to get their dream, and rightfully so I think. Once you're 6 feet under what's the point of all that money. The key is in finding a good balance of course.

Personally I am on the very conservative side of things because I am just more frugal by nature. I have been since I was a kid and watched my parents look at the prices of every little item in the grocery store. That mentality remains with me. Whatever I don't spend on a boat I will most certainly put into the market. $1M in the boat, $1M in the market. That $1M should help offset the operating costs of the boat (realistically earning about 6-7% in relatively safe and conservative investments).

Anyway, I digress. I hope to be able to get around $350K for my current boat, put another $750K into it and get any one of those listed above. Another benefit is that I can get away with not paying VAT because I'm close to Gibraltar and just need to make a trip every 18 months, get a stamp and come back.

In investigating the market I have noticed that the Princess boats, and especially the flybridge variants tend to hold their value quite a lot better than the competition. Their 56 and 60 seem particularly popular. I don't know why this is by I assume it's build quality? Or is it just the brand recognition? Obviously the Sunseekers are built by British shipyards too, and have a good reputation as well but don't seem to quite hold up to Princess in value retention.

Would love to hear more opinions.

 

[benjenbav]

That’s a bit Mr Scouge because if you looked at a hobby / entertainment/ pastime that way you wouldn’t do anything.
I think the mind set is with boating using disposable income not looking at it as a investment.

Having said that there are few niche boats that appreciate and certainly cars and classic bikes if you study the market .
But “ study the market “ applies to anything not just boats .
I have been fortunate with all of the above hobby purchases ended up coming out well above water ( scuse the pun ) on the .
The OP s right to jump in at the sweet spot ( study the boat mkt in his area ) and his rationale thus far seems reasonable to me .eg Why buy new with extra potential hassle , his big hull window analogy when for less than 1/2 you get almost the same boat .He’s right who cares about owners mid cabin windows, that could crack , graze over , blow the gas seal .

Also the more electrotwackery builders throw into the helm the more $$$ it’s gonna cost to maintain and have a short 1/2 life adding further depreciation pressure .

Having said all this we ( the boat hobby guys amongst us ) need peeps to continually buy new to bouy up the trickle down used mkt when the thing s 10-15 yr old and lost a shed load of value .
With €2 M I would split it , put 1/2 in property after studying the real estate mkts and 1/2 in a plastic fantastic floating apartment ( those listed by the OP in post # 07 ) AKA these days commonly called a boat .

Man mathing it by evey $ the boat looses the real estate appreciation adds a $ back .

Not suggesting including cost of finance in order to be Scrooge-like. I just like to understand what the things I choose to do cost me. If the answer is it’s money I can afford to lose and it’s something I want to do: happy days.

 

[Baggywrinkle]

If it flies, floats, or fornicates, it's cheaper to rent it .... but most on this forum ignore that rule.

 

[Tranona]

I would be buying in the med, which is where I am presently located and have been for some time. Using dollars because that's what my money is in.

I am aware of the 10% toys rule, although it doesn't scale that well once you go past a certain level of wealth, as someone with $5M would be wise to keep their toys below a value of $500K, while someone with €50M can realistically afford more than €5M in toys.

Some places 15-20% are quoted as well. I know people who sold their home and bought a boat to live on. Granted, they didn't last long but people overextend themselves all the time to get their dream, and rightfully so I think. Once you're 6 feet under what's the point of all that money. The key is in finding a good balance of course.

Personally I am on the very conservative side of things because I am just more frugal by nature. I have been since I was a kid and watched my parents look at the prices of every little item in the grocery store. That mentality remains with me. Whatever I don't spend on a boat I will most certainly put into the market. $1M in the boat, $1M in the market. That $1M should help offset the operating costs of the boat (realistically earning about 6-7% in relatively safe and conservative investments).

Anyway, I digress. I hope to be able to get around $350K for my current boat, put another $750K into it and get any one of those listed above. Another benefit is that I can get away with not paying VAT because I'm close to Gibraltar and just need to make a trip every 18 months, get a stamp and come back.

In investigating the market I have noticed that the Princess boats, and especially the flybridge variants tend to hold their value quite a lot better than the competition. Their 56 and 60 seem particularly popular. I don't know why this is by I assume it's build quality? Or is it just the brand recognition? Obviously the Sunseekers are built by British shipyards too, and have a good reputation as well but don't seem to quite hold up to Princess in value retention.

Would love to hear more opinions.

Why are you restricting yourself to essentially UK brands where there is a far greater choice available in the Med? VAT will be a non issue as almost all boats of that age in Europe will already be VAT paid and free to circulate. Of course you can use a UK VAT paid boat in the EU IF you are non resident, but if you are EU resident VAT will be payable the day you enter the EU. Non residents are limited personally by Schengen rules and boats by EU VAT rules. The latter are more generous but need to be carefully managed.

Certain boats hold their value primarily because they hit a sweet spot in the market often enhanced because of short supply and few alternatives.

 

[SunseekerStan]

Honestly I don't see any brands that I like better. I don't trust Italian engineering, although to be fair British cars don't exactly have the best reputation either.

Of the other brands I'm aware of I have considered the following:
Azimut, Ferretti, Astondoa, Sanlorenzo, Lazzara.

None of these are as appealing as the brands I've mentioned, for a myriad of reasons. The azimuts look dated, the ferrettis have a weird profile (too low), the astondoas seem like a lower price/budget yacht. Sanlorenzo's look like they are 20 years older than they are.

 

[SunseekerStan]

And the Galeon's scare me with all the tech and hydraulic stuff.