Boat Depreciation

[Eastporter]

Has anyone here figured out the depreciation per year on a DE boat? For example if you have a custom DE (Beal, Wesmac, Lowell, Flowers etc.) and spend X amount on it, what is it worth in ten or twenty years?
I saw a boat transom with the name "Depreciating Asset" once and had to chuckle. If anyone here has a real world scenario, with a build cost and a survey ten years later that would be much appreciated. Thanks.

 

[Muscie]

Has anyone here figured out the depreciation per year on a DE boat? For example if you have a custom DE (Beal, Wesmac, Lowell, Flowers etc.) and spend X amount on it, what is it worth in ten or twenty years?
I saw a boat transom with the name "Depreciating Asset" once and had to chuckle. If anyone here has a real world scenario, with a build cost and a survey ten years later that would be much appreciated. Thanks.

I built a 28 seaworthy in 2002 & paid all in (w/ electronics) almost exactly 125k; I sold it after 11 seasons in 2012 for 75k. It was in very good shape & yard maintaiined w/ app. 1000hrs.

 

[Eastporter]

I built a 28 seaworthy in 2002 & paid all in (w/ electronics) almost exactly 125k; I sold it after 11 seasons in 2012 for 75k. It was in very good shape & yard maintaiined w/ app. 1000hrs.

Doing some quick and dirty math. It appears to be 40% depreciation ($50k) over 11 years. This works out to be 3.636% depreciation per year, or $4,545.
Pretty good, but I wonder if this is normal or a very well taken care of DE.

 

[Powderpro]

Eastporter- interesting question about depreciation. Depreciation is a hard thing to nail down, because of so many variables. The markets change too, from year to year. The continuous increase in the cost to build a new boat, will tend to slow down the depreciation of used boats, especially popular boats that are well kept/maintained with desirable features and popular engines. In July 2008 I paid approx. $38.5k for a new QSC 8.3 500hp with ZF286 transmission. That same exact package today in Tier III would probably be about $55k. That's some serious inflation!

This particular boat I know of was not a DE, but a 32' commercial fishing boat in Alaska. Built new in '95, my friend had about $200,000 into it, and that was him hiring most everything done. I don't think he had hardly any sweat equity in the boat. The boat was from a very popular builder, popular model, popular engine, popular equipment- my friend put all the good stuff into his boat. He made nothing but money with it for 16 years, he pampered the boat, maintained it perfectly, stored it inside during the fall and winter, and he sold it in 2011 for what he paid for it new. So there was no depreciation in his case, because to duplicate that boat would have cost $350,000 in today's dollars. So he didn't lose a penny on his boat, and the guy who bought it was saving a ton of money versus building a new one. Both the buyer and seller came out feeling good.

 

[Leprechaun]

I bought a 1981 26' Fortier in 1995 and even if I priced it at the low end of the market for a similar year boat It looks like I could probably get my money back.

 

[BOSBoatMan]

I don't think depreciation can be considered here in a conventional sense. Build costs have gone up as well all know a $100k boat could be worth double that now provided the lineage is superb. Likewise, the same for mechanicals thanks due to EPA (as always) the price to conform now is higher than ever.

I think its safe to say that the downeast boat would depreciate, everything else being equal at a substantially slower rate than a mass produced Sea Ray or Tiara etc. Maybe as much by half...?

Again, we're talking generalities here. But I am still perplexed looking at some of the honies that have come through here whose build costs would exceed north of a cool million appear to be highly maintained and selling at a fraction on the cost!

 

[lobstercatcher]

Old school stick built framing and glass over plywood depreciates. That is probably why you see some low pricing on some of the boats for sale. Composite construction not as fast. The problem comes when the stick framing boats don't realize they are asking composite pricing . They probably don't know what they are doing or hope they find someone who doesn't know the difference. Just ask this price because... other boats are priced like that

 

[Powderpro]

From my experience, the boats that retain their value the best (depreciate the least) are the more popular designs built by the well known, more popular builders. The boat that is built right, with a popular engine, good looks, and well maintained is going to depreciate the least. The initial cost is sometimes greater to get the better designed hull, better engine, and better builder (not always though), but paying more initially, usually ends up saving an owner money in the long run, because the boat will be much easier to sell and have a higher demand. It's like guys thinking they will save money going with a gas engine versus a diesel in a DE, or like lobster said, going with cheaper building materials. In almost every case, the guy that tries to go cheap now, will more than pay for it later.

 

[cb34]

boat

Very simple, the more you have into it the more you will loose. Look at all these work that go up for sale at the end of their working life. They sell for a very strong price when compared to what they cost to build. The higher the finish and more stuff into it the more you will loose at the end. Lets face it, from a financial stand point all pleasure boats are waste of money. Just make sure it is your money your wasting.

 

[BillD]

I strongly agree with Will. If ya ain't earning a living with a boat you'll always lose !

Big bath or little bath.
Big fancy boat big bath.
Smaller simpler boat less of a bath.

This has nothing to do with DEs but I bought a 28 Bertram FBC with new power back in 91 for 29K. Was decent deal back then compared to other 28s available.

Sold it in 08 for 18K with new motors...couldn't give it away.

 

[Toolate]

THe outboard obsession and fuel costs have killed the twin screw gas boat. Not sure why though because I would take two chevy v8's over yamaha outboards. At least you can work on them yourself. Those Bertrams are great boats.

 

[Muscie]

I strongly agree with Will. If ya ain't earning a living with a boat you'll always lose !

Big bath or little bath.
Big fancy boat big bath.
Smaller simpler boat less of a bath.

This has nothing to do with DEs but I bought a 28 Bertram FBC with new power back in 91 for 29K. Was decent deal back then compared to other 28s available.

Sold it in 08 for 18K with new motors...couldn't give it away.

the reality we all know is that owning a pleasure boat is not an investment & it will depreciate over time just like any other "wasting" asset. the rate will depend on the quality demand, inflation, the economy, fuel costs, changing technology, inventory & other factors at the time of sale. you need to know that going in. Most spend the money & effort because they love it, other wise don't do it.

 

[Dr Dude]

I had a 35 Bruno sportfish flybridge w/ 3208 Cat built in 1977 and sold it in 1982 for almost double what I had paid to build it. Every thing went up (materials, resin, petroleum products) after I took delivery including the price for the boat.
In 1982 I had a 26 Fortier built. I had the boat for over 30 years. I sold it last July for about what I paid Roger for it. Today a new Fortier 26 would be over 3 times what I had paid....but what a great boat.
In 1987 I purchased a 31 Blue Seas (the last boat Royal Lowell designed) and took a small hit when I sold it in 1996 or around there.
Moral of this story: I should have had a few Brunos built back then for resale...........who knew.....!

 

[eyschulman]

With a custom boat the big hit comes when you pull away from the builders dock or launch site. Depending on the boat the market and what you have in it, it can be very steep. My boat one year old and very custom and off beat would take as much as 50% hit if I could even find a market. While that is an extreme example 20 to 30% for a custom one year old not impossible. Look how much has to go into builders profit and how inefficient small shops are.

 

[Keelboater]

Since when do REAL boaters care about depreciation? :lol: We are all crazy. That's why Break Out Another Thousand is our motto. The sooner you accept that fact, the more you will enjoy your boat. Take Bill D for instance. (I'm not picking on you Bill 'cause I'm in the same boat, literally) Bought a nice Bertram and gave it away. Did that stop him from buying another boat? Hell no. I can't wait for the day when I give my Bertram away after my Coastal project is completed...........and I'm still in the process of repowering the Bertram! :shock: :lol: He who dies with the most quality time on the water wins the game!

 

[lobstercatcher]

I had a 35 Bruno sportfish flybridge w/ 3208 Cat built in 1977 and sold it in 1982 for almost double what I had paid to build it. Every thing went up (materials, resin, petroleum products) after I took delivery including the price for the boat.
In 1982 I had a 26 Fortier built. I had the boat for over 30 years. I sold it last July for about what I paid Roger for it. Today a new Fortier 26 would be over 3 times what I had paid....but what a great boat.
In 1987 I purchased a 31 Blue Seas (the last boat Royal Lowell designed) and took a small hit when I sold it in 1996 or around there.
Moral of this story: I should have had a few Brunos built back then for resale...........who knew.....!

A nice Bruno was probably 25k new before inflation hit. Sorta like whats going on now. You can't build a boat for the same money a few years ago.

 

[Frank Grimes]

If you want an objective answer, ask a few CPA's. Accounting depreciation is a financial reporting tool for determining taxable status and replacement value; market depreciation is a separate concept. One applies to commercial usage, the other to recreational. Sometimes the lines get burry.