Should You Buy A Boat?

A surprising result of the pandemic is a jump in boat sales. Adviser Brad Wright reviews the pros and cons of boat ownership for these COVID-Captains.
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By Brad Wright, CFP

One industry that has prospered, somewhat surprisingly during the pandemic, is boating. I spoke with a few boat brokers last June who said that they anticipated running out of inventory for the first time ever. They also told me that half the boats they were selling were going to first-time boat owners who really didn’t know what they were getting into. For example, instead of asking about engine hours or the condition of the hull, prospective owners wanted to make sure the slip (dock space) came with the boat...These same brokers anticipate a fire sale once the pandemic is over, as these new COVID-Captains realize the carrying costs (annual expenses) of boat ownership. Boating is nearly always a pricey endeavor.

Brad Wright

Brad Wrio

Is it worth it?

I’m a life-long boater. I spent my childhood summers on Lake Winnipesaukee in New Hampshire and have enjoyed graduating to a bigger boat and the Atlantic Ocean. Boating brings family together, cultivates friendships (because who doesn’t love a buddy with a boat), and once you cast off from the dock, you can remain as isolated as you want. With all of these pleasures, boating can be quite tempting, but before you dive in, take stock of the costs – the full picture.

First you need to find and purchase your boat. You can identify a boat for pretty much any amount, so let’s say your purchase price is $25,000. If your boat is used, you’ll want to hire a professional to survey your potential floating summer home. This cost will vary depending on the boat, so I’ll estimate $500 for illustrative purposes. We’ll also include closing fees of $200.

Let’s assume that now the boat is yours. Time to head out on the water? Sure, but where will you keep it and who will care for it when you return? Here is a list of other fees you should anticipate.

Registration: This varies by state. If you’re on the ocean, you have the option to document your vessel with the Coast Guard. My fee was $495 for the initial documentation and then $26 per year thereafter. You may also be subject to state excise tax or a waterway permit, depending on your boating location.

Insurance: You want to protect yourself and others while boating, and most marinas will require proof of insurance before they lease you a slip. Add in about $300.

Marina Slip: If you tow your boat around on a trailer all summer you can skip this one, but otherwise marinas tend to charge you by the foot for dock space. We’ll remain on the low end here and say $1,000 for the summer.

Fuel: The current price for marine-grade gasoline (which contains less ethanol) is approximately $3/gallon. Diesel may be a bit less expensive. Depending on your boat, this line item may be considerable. My boat burned 16 gallons per hour at a cruising speed of 27 mph. Depending on the season, your bill could be $1,500, or more.

Winterizing: If you live in a climate where your boat must live on dry land for part of the year, you’ll want to winterize your boat’s engine(s) and any water lines. This usually includes an oil change. If you’re storing your boat outdoors, you will also want to shrink wrap it. The total for both will be $500-$1,000 for an average size boat. Please note that if you live in a year-round boating environment, you should plan to have your boat hauled out of the water annually, so that you can inspect, and if it’s an ocean boat, you would want to paint your hull’s bottom.

Winter Storage: If you’re lucky, you’ll be able to store your boat at the same marina you lease from in the summer. That way you won’t need to pay someone to ferry your boat to its winter location. Again, if you own a boat trailer, you can forget this part. Winter storage can cost $500 to $1,000 per year.

Spring Commissioning: You’ll want to have a mechanic start the engines (out of the water) and make sure everything runs properly. If you have an ocean vessel, you should plan to paint your boat’s bottom annually. It’s a good idea to either detail (wash and wax) your boat or have it professionally detailed yearly. If you skip this step, the sun and salt water will wear down your finish rather quickly. A tune up without a professional detail shouldn’t be too bad, about $150.

Miscellaneous: You never know what else can come up with a boat. I’ve had to repair fiberglass and replace engines, unexpectedly. You will also experience normal wear and tear on hoses, pumps, and even dock lines to keep your boat safe and sound on the dock.

This is a general overview, and I haven’t captured everything. It’s easy to run up annual expenses of $5,000-$10,000 to keep your boat humming. Of course, the bigger your boat and the more engines you have, the higher your expenses will be.

I kept a detailed cost sheet for a boat that I owned from 2016-2020. I sold the boat for more than I bought it for, which is unheard of since boats usually depreciate in value, but there was a COVID-demand. COVID aside, if you simply compared the purchase price to the selling price, you would think I made money on the boat, but when you add in my carrying costs, the actual return on investment was about -32% per year. If I approached you with an investment idea that would lose 32% per year, but you’d have fun, would you take it? Of course, good times with family and friends on the water all summer long is priceless and didn’t figure into my calculation.

So, is boat ownership worth it?

From a purely financial standpoint, it’s definitely not, but as a financial planner who understands and supports informed personal choices, and as an avid boater who has made many new friends and business associates on the water, maybe it’s a great idea...

There’s also a good reason why people say that the best two days of boat ownership are the day you buy your boat and the day you sell it. The choice is yours. Give it a lot of thought before you jump in.

About the author: Brad Wright, CFP®

Brad Wright, CFP®, is co-founder of Launch Financial Planning, LLC, a fee-only firm located in Andover, MA. He is a frequent contributor to WCVB-TV and Mix 104-1 Radio. Brad is Chair of the Financial Planning Association of Massachusetts. Learn more about Brad at www.LaunchFP.com

The opinions penned here are for general information only and not intended to provide specific advice or recommendations for any individual.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Any opinions are those of Brad Wright.


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