Design oddities -- a cautionary note

R
rodgibbons@mindspring.com
Wed, Sep 20, 2006 12:32 AM

(Disclaimer:  this e-mail is from a boat broker/dealer)

Of all the "how-to-save-money" boating topics, can you name one of (a) the least addressed subjects on this site  (not to mention at boat shows, in boating magazines, etc.), that, nonetheless, can be (b) one of -- it not THE -- most hidden-but-expensive elements when it comes to acquring a boat?

ANSWER:  Resale price loss.

I mention this because while there are unending discussions here and elsewhere about how to save a watt or two of electricity here, or a gallon or two of fuel-per-hour saved there, those considerations -- and frankly, many (most?) other price considerations -- can be downright insignificant when compared to a lack of forethought about resale value.

Nor should I limit this cautionary note to mere financial loss. I doubt there's one of us on this site for whom "time" doesn't also have value. And, as we get older, time gains increasing value over just about ANY financial sum. (If you  suddenly learned you had 3 months to live, what WOULDN'T you pay for an extra year of life? You'd likely trade every dollar you had if it could give you that 12-month/400% extension.)

The point I'm getting at is this. A 50' or 60' or 70' boat (cat or monohull) with one sleeping cabin could be one of those white-elephants for which an owner must accept a $100K....or $200K....(or larger?!?!) "bite" in the seat of his pants (specifically, that portion containing his wallet). Alternatively, it could be one of those boats that remains on a broker's "for-sale" list for not just months, but for years....or until the seller agrees to undergo the aforementioned (no-anaesthesia-provided), "wallet-ectomies."

And if you suddenly succumb to the grim-reaper, what's the burden on your mate if he/she is left with a boat that's resale appeal is limited, or its value hugely less than the amount you invested in it?

This isn't a slam specifically against any one design....rather, I would simply caution all readers to at least keep in mind that the greater the "uniqueness" of your boat compared to the boats that appeal to the broadest spectrum of used-boat buyers (whether as regards exterior configuration, interior layout, exotic building materials, propulsion oddities, etc.), the more likely you'll NOT be able to resell that boat, either as quickly as you'd like and/or for the price you'd prefer.

Most obvious example:  The price differential between THIS year's hottest one-off race model (sail or power), compared to its resale just a year or two down the road.  OUCH!!  Or, in line with a recent thread on this site, a 50' or 60' or 70' boat (cat or monohull) with but one cabin/bedroom. Potential Double-Ouch!

Further, any dealer/broker with just a few years in this business could name several brands/designs for which we KNOW that the probable resale time period may be a YEAR OR TWO (maybe even more)....or, conversely, for which the seller is going to have to accept a HUGE financial loss (compared to the new-boat price), in order to sell it (maybe) quickly.

And yet, resale value -- as noted above -- is a much-neglected topic, while nonetheless existing as one of the (potentially) most COSTLY elements of all boating expenses. All of my fellow brokers/dealers have seen this overlooked facet of yacht sales time and again. The difference is, it affects us 90% LESS than it does you -- we get our 10% brokerage fee no matter how much of a loss you suffer.

Conclusion:  Just because a "unique" element of design/construction/propulsion (whatever) can save you  hundreds, or even thousands of dollars per year (in fuel, moorage, maintenance, speed... whatever), do NOT disregard the affect that that "uniqueness" can have on the resale value of the boat -- a potential cost to you of TENS-or-HUNDREDS-of-thousands of dollars....and/or YEARS of lost time. When you initially bought that vessel you may have blithely disregarded the following caveat....but it can take a long time or a big price reduction to find a second soul willing to similarly disregard that old caveat:  "penny wise...but pound foolish."

Smooth cruising,

Rod Gibbons
Cruising Cats USA

(Disclaimer: this e-mail is from a boat broker/dealer) Of all the "how-to-save-money" boating topics, can you name one of (a) the least addressed subjects on this site (not to mention at boat shows, in boating magazines, etc.), that, nonetheless, can be (b) one of -- it not THE -- most hidden-but-expensive elements when it comes to acquring a boat? ANSWER: Resale price loss. I mention this because while there are unending discussions here and elsewhere about how to save a watt or two of electricity here, or a gallon or two of fuel-per-hour saved there, those considerations -- and frankly, many (most?) other price considerations -- can be downright insignificant when compared to a lack of forethought about resale value. Nor should I limit this cautionary note to mere financial loss. I doubt there's one of us on this site for whom "time" doesn't also have value. And, as we get older, time gains increasing value over just about ANY financial sum. (If you suddenly learned you had 3 months to live, what WOULDN'T you pay for an extra year of life? You'd likely trade every dollar you had if it could give you that 12-month/400% extension.) The point I'm getting at is this. A 50' or 60' or 70' boat (cat or monohull) with one sleeping cabin could be one of those white-elephants for which an owner must accept a $100K....or $200K....(or larger?!?!) "bite" in the seat of his pants (specifically, that portion containing his wallet). Alternatively, it could be one of those boats that remains on a broker's "for-sale" list for not just months, but for years....or until the seller agrees to undergo the aforementioned (no-anaesthesia-provided), "wallet-ectomies." And if you suddenly succumb to the grim-reaper, what's the burden on your mate if he/she is left with a boat that's resale appeal is limited, or its value hugely less than the amount you invested in it? This isn't a slam specifically against any one design....rather, I would simply caution all readers to at least keep in mind that the greater the "uniqueness" of your boat compared to the boats that appeal to the broadest spectrum of used-boat buyers (whether as regards exterior configuration, interior layout, exotic building materials, propulsion oddities, etc.), the more likely you'll NOT be able to resell that boat, either as quickly as you'd like and/or for the price you'd prefer. Most obvious example: The price differential between THIS year's hottest one-off race model (sail or power), compared to its resale just a year or two down the road. OUCH!! Or, in line with a recent thread on this site, a 50' or 60' or 70' boat (cat or monohull) with but one cabin/bedroom. Potential Double-Ouch! Further, any dealer/broker with just a few years in this business could name several brands/designs for which we KNOW that the probable resale time period may be a YEAR OR TWO (maybe even more)....or, conversely, for which the seller is going to have to accept a HUGE financial loss (compared to the new-boat price), in order to sell it (maybe) quickly. And yet, resale value -- as noted above -- is a much-neglected topic, while nonetheless existing as one of the (potentially) most COSTLY elements of all boating expenses. All of my fellow brokers/dealers have seen this overlooked facet of yacht sales time and again. The difference is, it affects us 90% LESS than it does you -- we get our 10% brokerage fee no matter how much of a loss you suffer. Conclusion: Just because a "unique" element of design/construction/propulsion (whatever) can save you hundreds, or even thousands of dollars per year (in fuel, moorage, maintenance, speed... whatever), do NOT disregard the affect that that "uniqueness" can have on the resale value of the boat -- a potential cost to you of TENS-or-HUNDREDS-of-thousands of dollars....and/or YEARS of lost time. When you initially bought that vessel you may have blithely disregarded the following caveat....but it can take a long time or a big price reduction to find a second soul willing to similarly disregard that old caveat: "penny wise...but pound foolish." Smooth cruising, Rod Gibbons Cruising Cats USA