Role of asset depreciation in larger (60f) boats

[prinex]

There is a local Azimut agent here in my marina, they know I want to sell my boat and suggested upgrading to a new Azimut 50. I had a look at this shiny thing, all beautiful etc - except the price tag - some cool 1.2 Mio Euro.

When I now look in the various sites how much a similar Az50 costs , around 2005 or so (ok it had a worse mid cabin etc but the 2035 Azimut 50 will also be better) - we are down to 300K. 900K depreciation in 15 years. If we know shift this to a 60 foot (like a squadron 68) - things are even more crazy with 1.8 Mio depreciation alone in 12 years.

Now even if I buy a 300K 2005 AZ50, use it 10 years, and then throw it away or gift the boat to someone - Im still ahead with 600K to spend (ok some of it will be engine / systems related if things go wrong). Ok the mid cabin will be smaller and I need to do the due diligence work (engine / systems etc and spend maybe another 50/80K) but is there such a large benefit that justify spending 1.2 Mio Euro ?

So my question: is there a "sweet spot" in the depreciation curve - for boats around 60 foot - where things starts to "settle" down and depreciation does not hit like a truck ? Because my plan was to buy a Sanlorenzo 57 (the nice one by Buggemi is gone sadly, they go around 150K euro, there is one abandoned at my local marina with some storm damage on the port side which I discovered yesterday) or a Sanlorenzo 62 mid-1990s (around 240K Euro atm), knowing that yes engine / systems will need more care and money, but this will still be a fraction of the hit on the depreciation alone. And btw I feel the Sanlorenzo are at another level for quality in respect to Azimut - the new one was "the festival of plastic furniture and carpets" I felt like in a holiday inn hotel room.

Is not even the usual question "I have no money and want a large boat". I do have a decent budget, I live 5min from the marina so I even have the time of take care of the boat. I just dont want to throw away half of it just to get a nicer gps plotter and a pop-in tv or the small sofa in the main cabin which I will never use.

 

[GravyStain]

I actually think that the sightly older boats are better looking and are certainly better trimmed internally, with no sharp edges.
A lot of modern boats look far too Ikea for my liking.

 

[BruceK]

OK, no where near 50 foot I am only 37 foot but I bought a cheap boat that was a fully functioning boat and sold as a project boat by the brokers. i.e. everything worked but everything was also a bit aged and tatty. By the time I had finished the refit I may as well have bought top end and saved myself the effort. It is my conclusion from the experience that there is no such thing as a cheap boat. In the end they all cost the same within reason given the model and year by the time you have finished with it. Now that bit doesnt answer your question about depreciation, but I'd guess if you were wanting to refit a 10 year old boat to be as new you'd find a similar price curve. Or of course you can just accept it's 10 odd years old and live with it. Which leads to another thing. Old boats are more expensive to keep. Oh yes. Without doubt. Everytime I think I'm done spending something else crops up that needs attention.

 

[prinex]

but I'd guess if you were wanting to refit a 10 year old boat to be as new you'd find a similar price curve

I have no intention of trying to do a restore job or similar, that is I would never buy a project boat (something where radical things needs to be done like new interior etc). Im pretty happy how a Mochi 56 from 1992 looks for example like this one here - in fact I like it way more than a new AZ50 Ikea-Style - I would do the basic things like upholstery where needed, new appliance etc, and of course a very in-deep review and inspection of engines etc (this one has MTU no idea how good/bad they are).

But if spending 30/40K on engine / transmission / ac / some cosmetics would buy 10 years of "normal life" (that is ordinary mainteinance etc) on this one - this looks to me a much better price / value relation than a new boat.

 

[benjenbav]

Boats are such a good way of burning large amounts of money that the sensible financial decision is to run, not walk away.

Unless you factor in the immense amount of pleasure you can get; in which case, the question moves from where the sweet spot on the depreciation curve might lie to how important is it to you to have something shiny that no-one else has owned; how much joy will you get from an up to date layout, the latest design - mahoosive glass panels in the topsides, china that's never been used etc, etc.

Good luck with the quest!

 

[BruceK]

@benjenbav Ah, pride of ownership, never to be under estimated and where Man Maths can be refined to it's best. I have known that feeling a few times but it's always short lived and expensive to maintain.
@prinex I fully sympathise with your position and would (if I could afford it) never buy new. However in so saying I would never buy a larger boat second hand because it was cheaper to do so than buy it new as the running costs have a way of catching up on you too. I think a 6 to 10 year old boat is the sweet spot. At 20 plus years the gremlins start coming out in droves. Trust me. Mine is a very simple boat but keeps me well occupied. and 30 to 40k spend will see you get squat. Hell for the first 4 years my maintenance budget was 15k a year to refit and as I said. I was a small boat. This season alone 2x turbo, 1 x coolant pump, 3 x sensors and one hydraulic cooler and 2 x duoprop set over and above scheduled maintenance. You could eat your 40k and not pass the marina gate.

 

[PowerYachtBlog]

An Azimut 50 in 2005 was 650k euro plus Vat. Also this new model is completely different for better or worse of things.
The older 50 had really a nice ride and everyone speaks good about them.
When the new 50 was released in 2015 it started with a price tag of just over 900k if I remember well. They have tweaked the boat over the years, and materials have literally exploded in the last years,

I think if you a new boater or coming from a smaller size I would say that new ownership helps.

 

[Momac]

Everytime I think I'm done spending something else crops up that needs attention.

Not just me then.
It sometomes feels like the boat is just a collection of faults waiting to reveal themselves.
Battery charger , macerator pump, bow thruster battery all unplanned replacements this year.
On the plus side an electrical fault fixed itself.

 

[julians]

Not just me then.
It sometomes feels like the boat is just a collection of faults waiting to reveal themselves.
Battery charger , macerator pump, bow thruster battery all unplanned replacements this year.
On the plus side an electrical fault fixed itself.

It when everything is working perfectly that I get most worried.....

 

[Momac]

It when everything is working perfectly that I get most worried.....

Me too.
It is tempting to live with minor faults.

I guess it's the same with a 60ft boat but more stuff to go wrong.

 

[Portofino]

It’s a sound plan for this size .
Bruces size is too small and £40:k soon disappears or ends up exceeding what he paid .Aside VP aged out drives , lack of ER space etc = Apples and pears .

Ideally find one SL 57/62 or similar with looked after MAN s , that someone has cherished and due to age is packing up

That €900Difference could easily make 16 / 18:% in a medium risk equities portfolio, 16 % is €144 K per year .

With that war chest you will fitting sold gold taps , never mind plated or painted .

No keep the cash , invest it and use the proceeds for free boating .
When you come out ( with a few enhancements) you will get your money back + the remains of the €900 + less any €144 K you could not spend over 10 yrs , ie a massive amount .You aren’t gonna be tipping €144 K each year for 10 into it .

Also enjoy @ € 150-300 K , as you say walking down and getting it right , the way you want it .
Gold taps was a joke btw , but easily affordable if you like .

This maths / logic works with Itama , much like SL s because they haven’t basically changed the shape .
A a show in Monaco I tested on the water a new 62 @ something like £1.6 M + taxes , yet you can pick up a very nice early arguably better Amarti 56/60 for €300 , same performance .Then spend what ever on a cosmetic refit to update the cushions , seats etc to match the new one , even repaint the hull identical etc and so on .
There are Itama re fitters around Rome , Naples .
There are many SL refitters and just normal generic carpet , upholstery, hull painters etc .

Remember even a new boat in a 10 yr cycle is gonna need the “ normal “ semi consumables like Bimini , sun pad cushions and if it’s got carpets ( urgh ! ) new ones , toilet pumps , might need cut less bearings , engine exhausts , etc etc .
Its only the first 3/5 yrs that new means no big bills , from 5-10 they start to creep in .

But as you say the hidden taboo subject at boat shows …….DEPRECIATION .
How to make yourself very unpopular mention the” D “ word .

 

[markc]

I'm an advocate of buying an older boat that's been well looked after and there is no way I'm going to spend the depreciation on maintenance. Buy quality, and pre-financial crisis and you can get a great boat for not much money. I would probably caveat this with the proviso that you are willing and able to get stuck in and repair some things rather than relying on contractors. Also, I think once you are on top of things the maintenance is similar to a newer boat that's been built to a price.

 

[BruceK]

Bruces size is too small and £40:k soon disappears or ends up exceeding what he paid .Aside VP aged out drives , lack of ER space etc = Apples and pears .

Disagree. Little apples vs big apples. By comparison mine's penny parts. Scale it up and we're talking a lot of money rather than blowing hot air and dodgy investment advice

 

[Martxer]

Jim Davidson bought an older princess and spent some cash to get it how he wanted it. I think divorce settlement played a hand in that but he did say it made sense.
Saw a similar vid on YouTube from boats.uk bought an older boat for 250k spent 80k on a refurb seemed to make sense.

 

[ari]

There is a local Azimut agent here in my marina, they know I want to sell my boat and suggested upgrading to a new Azimut 50. I had a look at this shiny thing, all beautiful etc - except the price tag - some cool 1.2 Mio Euro.

When I now look in the various sites how much a similar Az50 costs , around 2005 or so (ok it had a worse mid cabin etc but the 2035 Azimut 50 will also be better) - we are down to 300K. 900K depreciation in 15 years. If we know shift this to a 60 foot (like a squadron 68) - things are even more crazy with 1.8 Mio depreciation alone in 12 years.

For your 2005 example to have depreciated 900K in 15 years and be worth 300K, it must have cost 1.2m new, which you say is what they cost now.

Why did the owner pay a 2021 price in 2005..?

 

[Bigplumbs]

I actually think that the sightly older boats are better looking and are certainly better trimmed internally, with no sharp edges.
A lot of modern boats look far too Ikea for my liking.

Very well put my thoughts exactly..... The newer ones don't look like a boat should look

 

[Bouba]

A refit, no matter the cost, may not get reimbursed when you sell it

 

[Bouba]

I think that sharp furniture that’s ready to split your head open when you lose your footing during a rough passage, maybe going out of fashion

 

[Bigplumbs]

Well I will say it if no one else will.............................. If anyone would even contemplate loosening 900k in depreciation on a boat then they have far too much money in the first place.... The world needs a reallocation of wealth .

 

[Bouba]

Well I will say it if no one else will.............................. If anyone would even contemplate loosening 900k in depreciation on a boat then they have far too much money in the first place.... The world needs a reallocation of wealth .

I don’t think that wealth redistribution means yachts for everyone ??