Sailing yacht depreciation

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Tamer11

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I am looking at buying a semi live aboard 40ft + yacht. My question is from 2005 onwards which year build is the best value for money, taking into account predicted further depreciation? Also if you buy a new one how much does it depreciate on you drive it off the forecourt as it were?
 
Buying any yacht that is 10 to 15 years old will have already taken a substantial knock in value compared to new. As Sandy said it all comes down to what someone is prepared to pay. It also depends on the condition of the yacht, how desirable it will be in the future market, and the time of the year of a sale. You mention semi liveaboard, well that usually means extra wear and tear to the boat which will depress the value further. Owning a boat is not a financial calculation, if we did it that way most of us would never buy one, especially if you worked out the cost per mile sailed.
 
"Unless you are a business and have an accounting policy for depreciation of an asset depreciation is not a law of physics. The selling/buying price of your vessel is what somebody is prepared to pay on the day "

Yes I think you are right.

" Owning a boat is not a financial calculation, if we did it that way most of us would never buy one, especially if you worked out the cost per mile sailed. "

Totally agree

"If worried a about depreciation don't buy a boat ! Possibly not an answer you want to hear though. "

I am not worried, I just sold my existing 1980's yacht that I bought 4 years ago for £30,000 for a small profit , so it did not depreciate at all. I am now entering new territory and have a budget of £50,000 to £100,000. Should I go for an older boat in the £50,000 range and spend a bit of money on it. This age range will most likely have finished depreciating. Or do I go to the top of my price range and get a newer boat that will depreciate more, but like Sandy says depreciation of boats is not an exact science and at the end of the day it will probably boil down to buying a boat you fall in love with!
 
I think when boats have 'finished depreciating' it's because they are costing more every year in necessary upgrades ?
If you buy a 2005 boat and keep it 10 years, you may need a new engine.
If you keep anything 10 years you will want new sails.

I think if you are really worried about saving a bit of depreciation, you should be looking at spending a lot less.

The man thing is to look at the cost of putting a boat in the state you want it and keeping it that way for the time you want to keep it.
 
"The man thing is to look at the cost of putting a boat in the state you want it and keeping it that way for the time you want to keep it. "

Good point thanks
 
11 years later and my boat is worth not far off from what I paid for it.
Although I have spent a small fortune in maintenance/upgrades. If I hadn't spent the money looking after her she'd be worthless by now.
 
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You can vaguely tell on the market that a 2005 ish boat has probably lost around 2/3 of its new ticket value. That's what we figured last year anyway, give or take maintenance, upgrades and other investment. So on a 300k new boat, you might pay 100k. She probably lost 100k in her first six months, then 100k over fourteen years, and now you can't possibly lose more in pure depreciation, which is somewhat reassuring.

Over the next ten years of ownership, your (opex) mooring, servicing and insurance costs alone could well get towards half of what you pay to buy the boat, especially on the UK south coast. That's before any (capex) for new sails, major engine parts, saildrive gaiter, exhaust elbow, seacocks, standing and running rigging, blocks and clutches that wear out, anchor chain that rusts through, warps that chafe, and we still haven't even upgraded anything like electronics. If you don't do any capex, you may not be able to sell her at all.

Assuming you do some reasonable capex and keep her in trim, how you may sell her in ten years' time, I would say that's more of a punt on the economy and demand for recreational boating, than a view on depreciation of any specific boat.

So: if you want to go sailing, buy a boat, expect both to spend and invest to keep her going. Buying wisely is a case of identifying what maintenance has/hasn't been done and pricing it in. Depreciation per se is rather small beans on a fifteen-year-old boat.
 
I break even on boat purchases..

I buy a boat I like, fix it up the way I like it, sail it then at some point-sell it.

A good part of the fun is the fixing up - but it’s the most expensive part of the process and you could argue that this portion of money spent is ‘lost’ But then there is the satisfaction of farkling and using the shiny new bits.

I have no idea how the cash side of the deal works out but it seems about equal. Maybe I ‘lost’’ what I’d pay for a couple of weeks on a decent charter boat on selling the last one after 4 years.

Im sure there is very little logic in boat ownership.
 
Tamer11 said:
I am looking at buying a semi live aboard 40ft + yacht. My question is from 2005 onwards which year build is the best value for money, taking into account predicted further depreciation? Also if you buy a new one how much does it depreciate on you drive it off the forecourt as it were?
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What kind of sailing you want to do and with whom? That will inform your decision as much as anything. My 2002 boat I purchased for a shade under £50k, she will remain broadly that value if I look after... if I do not she will depreciate to £50 in very little time indeed :D. My old Albin Ballad I purchased for £9.5k and sold for circa £10k (yup, spent loads on her to keep her in good shape...).
 
Have a look at ‘sitting there rotting in a boatyard’ on Facebook, lots to choose from, no depreciation to worry about.
 
Tamer11 said:
I am not worried, I just sold my existing 1980's yacht that I bought 4 years ago for £30,000 for a small profit , so it did not depreciate at all. I am now entering new territory and have a budget of £50,000 to £100,000. Should I go for an older boat in the £50,000 range and spend a bit of money on it. This age range will most likely have finished depreciating. Or do I go to the top of my price range and get a newer boat that will depreciate more, but like Sandy says depreciation of boats is not an exact science and at the end of the day it will probably boil down to buying a boat you fall in love with!
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I'm not sure if you understand depreciation.

I'm married to Mrs S who holds two professional accounting qualifications and will be more than happy to explain, for a modest fee.

This might assist in your understanding https://www.accaglobal.com/my/en/student/exam-support-resources/fundamentals-exams-study-resources/f7/technical-articles/measure-depreciation1.html
 
I would aver depreciation of boats has a lot to do with initial quality, how well you look after them, and trends, more than age, albeit in the early years they will all depreciate horrendously.

Buy the best quality you can, look after it wonderfully well, and dont buy anything too quirky and if it is at the bottom end of your age range when you buy it may well even hold its value.
 
A lot of people forgetting depreciation of the pound notes which bought their boats.
My previous boat cost its original owner the asking price of two terraced houses in Pompey. I eventually sold it for about two Mondeos.

As an investment, the only consolation is that when I was saving up for my most expensive boat, all my mates were buying dot com shares.
A boat is dead money, but you can go sailing in it.
 
Tamer11 said:
I am looking at buying a semi live aboard 40ft + yacht. My question is from 2005 onwards which year build is the best value for money, taking into account predicted further depreciation? Also if you buy a new one how much does it depreciate on you drive it off the forecourt as it were?
Click to expand...
What you need to do is
Gixer said:
11 years later and my boat is worth not far off from what I paid for it.
Although I have spent a small fortune in maintenance/upgrades. If I hadn't spent the money looking after her she'd be worthless by now.
Click to expand...
Yes you have to keep spending to maintain a price..eg if you look at things Like Westerly Centaur’s £3.5K 30 years ago today £8-10K for a good one..
 
Depreciation is an accounting device which spreads the cost of a fixed asset over the period it is earning revenue for a business, used in the calculation of profit.

How depreciation is calculated will depend on the company's accounting policies, which may also be driven by what is allowed under taxation rules.

Any assumptions on residual value will be just that, assumptions which cannot be ascertained until final disposal.

As regards forecasting realistic depreciation in the yacht market.... who knows!
 
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