Mastercard tell us certain things are priceless and some things may well be. Uplifting experiences from the benefits of privilege seems to be the thrust of that campaign, but we are talking about boats and there is nothing priceless about them.
In fact, many people are concerned about boat prices: buyers, sellers and owners who are looking at the next refit or annual cost of ownership. Throw in brokers, insurance companies, finance types and marine service providers and we have a small army of price-concerned people.
So the big question is, how much is it worth? The short answer is probably too much or not enough, which will depend entirely on your position in a boating transaction. A tricky question to be picked apart.
Buyers (tycoons excluded, regular folks only apply here)
From a buyers perspective most boats will cost too much. What most people want from a cruising boat is a well-found vessel, adequately equipped and reasonably ready to sail away. Project boats will always be much cheaper, until they are completed to the same standard as the one we turned down.
This ready to go product is what most brokers advertise so there must be many, many thousands of such vessels available each and every day. Hence, selecting a vessel will be a simple matter of negotiating for the best boat at the lowest price amongst the plethora of contenders.
Market forces are our friend when supply exceeds demand, right? Wrong. If one in 50 of the advertised boats is truly sail-away or nearly so, there would be a whole lot less boats on the market to choose from because people would have bought them.
Reality is, the overwhelming majority of boats for sale need something (i.e. many things) done to them; if not now, then in the near future. This, of course, is perfectly reasonable if the price reflects that and the potential buyer is aware of the matter and happy to undertake the project.
Rare is the boat price that reflects the need to renew standing rigging for example, a big ticket item pretty much required every ten years.
What about other items: replace the 20 year old electronics such as a Loran and weatherfax, which are not much use these days; then the need to replace it with an AIS; allow for a compliant holding tank system; probably an annual slip and antifoul? Now that bargain price starts to lose a little shine. Speaking of which, how about that topsides respray?
But the boats value will be increased once these items are fixed, correct? Sorry, no; the boat is worth what someone is prepared to pay for it and most buyers will be reasonably researched as to the price of, for example, a 20 year old, 15 metre fibreglass sloop.
Improvements, as mentioned earlier, will make the boat a lot easier to sell and so will sell a lot quicker possibly saving you money. But the cost of upgrades will not be equally reflected in the selling price. A 40 footer is still a 40 footer.
An excellent condition may be worth ten to fifteen per cent more than a standard example of the same boat; but 10% of $80K ain’t gonna cover what you paid for that new rig, electronics and paint.
Buying unseen
Some deals are just so good people buy a boat sight unseen; no big deal these days when the internet and e-mail make so many pictures and so much information available to the buyer, saving money on airfares.
If you believe that then the time has come to place your affairs into the charge of a reliable and trusted relative because you are clearly not capable of managing alone. Only exception of course is if you are a broker and then the concept will make perfect sense.
Big question remains; if you have never seen it how can you put a price on it? Small answer is: you are forced to trust the seller. What is that famous Latin phrase: caveat emptor, let the buyer beware? Being Latin then I guess it is not a new concept highlighting maybe a few shonky deals went down at the docks in Rome circa 50BC.
Buying a boat without a survey happens quite a bit, which is fine if you happen to be a boatbuilder or other suitably experienced type and can do it yourself. However, if the seller says you cannot perform a survey and/or lift the boat that is another matter. Chances are there is something to hide otherwise why exclude a standard practice?
When you are putting a price on things consider the matter of records, you might have a conversation that goes a little bit like this:
Seller: “yeah mate both of the engines were fully rebuilt to zero hour standard just 300 hours ago, same as brand new now.”
Buyer: “you beaut, show us the invoice please cobber.”
Seller, with a straight face: “never got a receipt, was a cash job, rates for mates you know but they’re brand new.”
Yeah right.
Same applies for rig replacement, bottom jobs, chain plates and a million other items that are not immediately obvious; if it is not verified it does not exist.
Sellers
This is a tricky one, sellers can be looking at their boat with rose-coloured glasses, but be in a bad place for any number of reasons and just want shot of the boat.
If a seller is proud of the boat and has maintained and improved diligently, then it will likely take a while for them to realise that the following equation does not often apply: buy price + money spent + X amount for owner labour + brokers commission + expected negotiated discount = selling price.
Of course tight-arse sellers use this formula adding 10% in each category; they are likely to remain boat owners for the foreseeable future.
One good idea if you are selling a boat, even if you are a tight arse, is this: if it is broken, undocumented, works intermittently or looks like crap, do not list it as a feature of the boat. A buyer comes to inspect at X price to discover the advertised pilot, radar and wind instruments do not work then you will see the price of new items immediately deducted from any increasingly unlikely offer.
Sadly boats are depreciating assets and seem to be getting cheaper each year on the used market, despite new ones increasing in price. Supply and demand at work again: new boat production keeps on pumping, while the old ones are still floating around just as nicely. What is that use by date on GRP?
Good buys can often be a result of bad luck, in this instance someone else’s bad luck. Sometimes, for a variety of reasons, people just want to move on; then paying berthing fees on an unwanted, unused boat will be an undesired continuing burden. Add to the fact that the ‘unused’ status may mean unwashed etc. and the price is going downhill at quite a rate.
Probably a smarter move to take the loss up front and sell for a lower price now than wait for a year and realise even less. Brokers will be all for this option and I expect if they read no further then I may get a few Christmas cards for mentioning it.
Some sellers will resent paying a broker’s commission and refuse to use them. This allows the committed seller to potentially offer at a lesser price but usually the objective is to get a higher take home price.
Owners
Have a boat, happy with it and keeping it? Well good for you, but you still need to put a price on it: how else do you know much to insure for?
This naturally will depend on what the insurance company will accept, the premium you want to pay and any number of slippery issues: areas of use, total loss only, larger excess, numerous exclusions, fire and theft and lightning strike etc. that you may negotiate.
Agreed value or market value are the usual means of establishing worth and to back this up you may be required to have an out of water survey in order to establish satisfactory condition and ease the blood pressure of the underwriting executives.
That inspection may involve a valuation, so somebody else will be putting a price on it and if you thought to insure the family’s traditional heritage yacht, which is actually a 1978 Eastcoast 31, for $450K then it might be time for you to seek a responsible person for power of attorney again.
Then you have the question of investment; how much am I willing to spend to have the boat I want? If the little darlin’ is 30 feet and worth $30K, not much point spending $50K on Kevlar sails, gensets and air conditioning; not if you want the money back later anyway.
Modifications, aka: ‘improvements’
Boat improvements can be very satisfying and rewarding when accomplished, it is a nice feeling when you make your boat better; so long as your idea of an improvement matches the rest of the world or at least the logical portion of it.
Some people have funny notions of ‘better’. Take, for example, a previous owner of my boat who drilled 19 holes in the ceiling liner to install a shower curtain in the head; they must of thought keeping the sink dry was an important improvement. Not so logical in my book and I have had 13 years to fix them.
Fact is, most people who own a boat think they are smarter than the builders and in some case the designers. I reckon that depends on who the builder was and in the case of 98% of production boats they will be better at it than you, so leave it alone. If something does break, restore it to original in most cases.
Owner modifications can run to anything: from the bloke who cut his mast shorter to get under more bridges, to the other lunatic that demolished a queen size master berth to house a generator so he could air condition the remaining pokey V-berth.
Electrical modifications are my favourite: AC power fitted after market with the finest products K Mart has to offer; a couple of extension leads, couple of 20 plug power boards strategically placed and shazaam! We have shore power. DC modifications are nearly as much fun, but only nearly as they are nowhere near as life threatening.
Over the years the average cruising boat may well go through a number of hands, most likely idle ones that did the devil’s work. All sorts of additions will probably have been made: some extra lights, LED replacements, all sorts of navigation gear, battery chargers, inverters and who knows what else; never mind mentioning repairs.
So, to many people, the crucial fact is ease of installation; the easiest way to install anything is probably to take the power from the most convenient, closest point and connect it with a crimp or one of those little terminal blocks with screws. Leave the old gear and cable in place and Bob’s your uncle, job done! So if you see a spaghetti pile of wire behind your switch panel it is most probable you are looking at an owners modification.
Sailing and cruising in your own boat will doubtless leave you with poignant experiences, but priceless? They should be more good than otherwise, if you have chosen wisely. ≈
