Sailing & Boating Advice

Owning a sailboat may cost a lot more than you think.

DON’T FORGET DEPRECIATION

Assign 20-30% depreciation for the first year on a new boat,  10-20% for the second year (Or the first year on a used boat ) and 5-10%  (of the original price) for each year thereafter.  At some point the depreciation will taper off, but the maintenance will escalate to make up for it.  For the sake of argument, I will remain conservative and use the maximum depreciation scale.

FIGURING THE COSTS

I am going to show you a BASIC way to determine the costs of owning a boat, taking the typical factors into account.  Obviously, the price to own an maintain a 60 foot racing sloop is going to be substantially more than a 24 foot trailered family sailboat.  Similarly, owning a Catalina 30 is going to be different than owning a Newport 30.  There is no formula that will work for every boat, in every location, you’ll have to use this as a guideline only.

Lets clarify what’s going on here.  If you don’t spend the money on mainenance, you will see it in depreciation.

First, some facts.

$20,000 PURCHASE PRICE – a 30 foot, used sailboat from 1984, in functionally good condition with only minor wear and tear expected of a boat of her age.

5 YEARS is the term that we will own the boat.  After that, we will figure out what we are going to do with it.  Hopefully we get between 30-60 sailing days on her a year, getting some good use out of her.

EXPENSES below are simple, mandatory expenses – slip fee and insurance.  Obviously, these two factors depend on where you are.  In Southern California, these numbers are accurate for 2009, if not on the cheaper side.  They do not factor in live aboard fees, dockside electricity, extra storage lockers, and most importantly, fuel.

MAINTENANCE costs are things like bottom scrapings, bottom paint, haul outs, varnish/stain, replacing sail covers, replacing or having a sail repaired if damaged, replacing the occasional rigging item, basic engine maintenance and expenses, etc. Despite what some have said, this is a VERY realistic figure.  Some years will be more, some will be less.

Now, based on my experience with owning sailboats, lets figure out how much it will cost to own her based on 3 scenarios.

SCENARIO 1 – Used and Abused

We do no maintenance, and sell her at the end of the 5 years.

EXPENSES & DEPRECIATION__________________________

FIRST YEAR

- $0 maintenence (10%)

- $4,000 depreciation (20%)

- $3,200 expenses = $300 per mo.slip rent + $200/yr liability insurance

NEXT 4 YEARS

- $0 maintenence (10%)

- $8,000 = $2,000 x 4 (10%/year) next 4 yrs depreciation

- $12,800 expenses next 4 yrs slip fees and insurance

__________________________________

$16,000 TOTAL SLIP FEE AND INSURANCE EXPENSE

+ $20,000 ORIGINAL PURCHASE PRICE

__________________________________

$36,000 TOTAL to own this boat for 5 yrs.

That’s approx. $7200/year if you don’t sell it.

If you do resell it after 5 years for $8,000 resale value (using the depreciation schedule above) – lets face it, after 5 years of hard use, she’s going to be hard to sell because she’s in really poor shape (private sale/no commission)

then $28,000 non-recovered expenses/depreciation divided by 5 yrs =  $5600/year

If we got the maximum of 60 days onboard our boat each year, this factors out to $93.33/day of use to own this boat.  That’s $15.34/day whether you use it or not.

SCENARIO 2 – The Properly Maintained Boat

We do regular maintenance, she’s in as good of shape as the day we bought her, and sell her at the end of the 5 years for the exact same price as when we bought her.

EXPENSES & DEPRECIATION__________________________

FIRST YEAR

- $2,000 maintenance (10%)

- $3,200 expenses = $300 per mo.slip rent + $200/yr liability insurance

- $0 depreciation

NEXT 4 YEARS

- $8,000 = $2,000 x 4 (10%/year) next 4 yrs maintenance

- $12,800 expenses next 4 yrs slip fees and insurance

- $0 depreciation (10%)

__________________________________

$16,000 TOTAL SLIP FEE AND INSURANCE EXPENSE

+ $10,000 MAINTENANCE

+ $20,000 ORIGINAL PURCHASE PRICE

__________________________________

$46,000 TOTAL to own this boat for 5 yrs.

That’s approx. $9200/year if you don’t sell it.

If you do resell it after 5 years for $20,000 resale value (the exact amount you paid for it) (private sale/no commission)

then $26,000 non-recovered expenses/depreciation divided by 5 yrs =  $5200/year

If we got the maximum of 60 days onboard our boat each year, this factors out to $86.66/day of use to own this boat.  That’s $14.25/day whether you use it or not.

SCENARIO 3 – The Real World Bargain

Buying the bargain – lets forget throreticals, and use a typical scenario you might encounter buying a bargain (through distress sale, lost job, etc).  This is the actual scenario it would take for an inexperienced boat owner to fix up my newly aquired hardship-sold 1970 Coronado 30.  She came with several sails, an outboard, and several anchors.  When I bought her for $2,000, here’s what was wrong:

Palmer 60 inoperable, needs to be rebuilt or replaced.
Several leaking windows.
No cushions salvagable for re-covering, will need all new cusions.
No toilet in head, only porta-potty.
Hatch slider boards cracked/broken
Companionway hatchboards must be replaced.
Hatches need new rubber seals,
Boat needs total repaint – bottom and topsides.
No electronics.
Pig dirty.  Needed to be cleaned completely.
Batteries are probably dead.
Bulkheads have dated faux wood paneling that has faded.  They need to be recovered or painted.
No electronic bilge pumps.
Alcohol stove is not very practical, and can be dangerous.
Sail Cover and outboard covers need to be replaced.
At least one loose stansion port side.

EXPENSES & DEPRECIATION__________________________

BEFORE BUYING

$120 – ID state sales tax (6%)
$30 – Year License
? – Property Tax
_________________________
$150 TOTAL THIS SECTION

RETROFIT EXPENSES

HAUL OUT EXPENSES

$1000 Haul out, clean bottom, paint bottom
$2500 Topsides paintjob
$100 Zincs
$10000 Diesel Engine Replacement – prop, shaft, install, etc.
$300 New throughhulls
___________________
$13800 TOTAL THIS SECTION

AT THE SLIP EXPENSES

$1400 Complete new set cushions
$50 Sealant and misc to fix leaking windows
$100 Hatch slider boards
$100 Hatch boards
$30 Rubber seals for hatches
$50 cleaning materials
$150 VHF Radio
$250 GPS Handheld
$300 Batteries
$200 Marine Battery Charger
$230 Mainsail cover
$30 Outboard cover
$50 Bulkhead paint/brushes
$200 Head and misc parts
$100 2x bilge pumps
$500 Used electric replacement stove for alcohol stove.
$200 Anchor Chain and Line
$400 Used manual windlass
______________________
$4340 TOTAL THIS SECTION

$18140 TOTAL RETROFIT EXPENSES

That’s bargain hunting for mostly new stuff.

If I bargain hunt for used stuff, and do as much of the labor I can do myself, lets say I can do so well I can save 50% on these costs.

$9070 CAPTAIN FRED BARGAIN HUNTER RETROFIT EXPENSES

Now we can start to maintain and own her.

FIRST YEAR

- $0 maintenance (the maintenance is covered by the retrofit)

- $3,200 expenses = $300 per mo.slip rent + $200/yr liability insurance

- $0 depreciation (its actually starting to appreciate now)

NEXT 4 YEARS

- $8,000 = $2,000 x 4 (10%/year) next 4 yrs maintenance

- $12,800 expenses next 4 yrs slip fees and insurance

- $0 depreciation (10%)

__________________________________

$16,000 TOTAL SLIP FEE AND INSURANCE EXPENSE

+ $150 TAXES AND FEES

+ $8,000 MAINTENANCE

+ $9,070 CAPTAIN FRED BARGAIN RETROFIT

+ $2,000 ORIGINAL PURCHASE PRICE

__________________________________

$35,220 TOTAL to own this boat for 5 yrs.

That’s approx. $7044/year if you don’t sell it.

If you do resell it after 5 years for $12,000 resale value (this is about market value, give or take 20%) (private sale/no commission)

then $23,220 non-recovered expenses/depreciation divided by 5 yrs =  $4644/year

If we got the maximum of 60 days onboard our boat each year, this factors out to $77.40/day of use to own this boat.  That’s $12.72/day whether you use it or not.

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To recap, its obvious that to own a boat is expensive.  The dream that once you buy a boat, the wind is free and theres a few costs on the side to keep her floating is mostly true, but sadly there is no way to escape the costs, which, for some, and depending on the situation, can be substantial.

The reason I wrote this article is for dreamers to realize this, and that no matter what the cost of boating, the end result is priceless.  The places you can explore, the feeling of joy charging downwind at 10 knots, the fact that you could take off tomorrow for any port you desire is all worth every penny.  Just make sure you don’t go broke waiting to make your sailing dreams come true.  Expect to spend this much, and if through your thriftiness and my innacuracy you manage to save 50% over my costs, you’re a true sailor who’s beating the system.  But it ain’t free, make sure you can afford it… its worth it.

SOME ANALYSIS

I CAN FLY ALMOST ANYWHERE AND STEER A SAME SIZE OR BIGGER (BARE BOAT) CHARTER BOAT IN SOME PRETTY NICE PLACES (FOR A WEEK AT A TIME YEAR-ROUND) AT LEAST  TWO, MAYBE THREE TIMES A YEAR.  FOR THAT  YEARLY AMOUNT. If I talk another person or couple into splitting the charter fee……maybe I can go more often or we can hire a bigger boat.  Imagine the simplicity and convenience of it all.  Chartering offers you the opportunity for year round fair weather adventure.  You can pick your cruising ground, pick your season, enjoy, take some pictures, return home and plan your next nautical safari.

So remember next time you are having that dream… unless you can get some serious usage out of your sailboat, and can stomach the thousands of dollars it will take to own a sailboat yearly, maybe you don’t need to own a sailboat after all!

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