Whether you buy a new boat or an older boat, you’ll likely have to deal with depreciation. But just how much will your boat depreciate over time? Here's a basic estimation of what the value of your yacht will look like over 10 years.
For a sailboat that sells for $550,000.00 new
- After 3 Years
Three years into ownership of this sailing yacht, you’ve lost $50,000.00 in value. This is a loss of $16,667.00 per year but only a loss of 9% of its value.
- After 5 Years
At five years, this boat is selling for $465,000.00. This is $85,000.00 less than its original value and the owner will have lost $17,000.00 per year. 85% of the value is still left in this sailboat.
- After 10 Years
After 10 years, this sailboat still sells for $400,000.00 but it has lost $150,000.00 in value. This puts it at a $15,000.00 loss per year. It is now worth 73% of what the original owner paid for it.
Do these numbers sound surprising? With expensive cars, you usually notice a staggering amount of depreciation within the first few years. However, certain yachts keep their value better than smaller and less expensive models.
Sailing yachts in particular tend to have a steady rate of depreciation so you could buy a new one and you won’t have any large variations in losses throughout the first ten years.
How Will Depreciation On Your yacht Affect You?
Of course, the depreciation rate will differ on a case to case basis. It can be affected by the materials being used on the boat, the price of a new boat, the state of the economy, and many other factors. There are even certain times of the year that can be better for selling
Ways to limit yacht depreciation
Depreciation is inevitable. However, the lifespan of a boat is quite high. Most boats have strong hulls that can be repaired and reconditioned and you can easily find many boats from the 1970s and 1980s in great condition. Here are some ways to help you deal with boat depreciation:
1. Maintain Your yacht
A yacht is sometimes a much bigger commitment than many people realize before they buy it. There are a lot of little things that need to be taken care of through regular maintenance, repair, or replacement, like changing the engine oil, updating electrical equipment, and even cleaning bimini tops and cushions.
Keeping up with all of these maintenance tasks will give make it much easier to sell your boat in the future. Not only this, but it will make owning your boat much easier and more enjoyable.
2. Budget for Engine repairs
If you plan on keeping your boat for a while, you should plan on having to repair or maybe even replace your engine at some point. Learn how to work on them so that you can maintain them yourself. When it comes time to sell your boat, you’ll get a lot more for it if the engine is working.
3. Weather Proofing
Weatherproofing can go a long way towards making your boat more appealing to future buyers. Leaks can cause water damage and rot which will be a much bigger problem down the road.
4. Make Upgrades
Some upgrades won’t do much for the value of your boat while others will increase the value significantly. Upgrades like bimini tops, solar panels and a water filtration system will all help to make the boat more functional and valuable.
Upgrades like stereo systems and exterior lighting are great for your own personal enjoyment but won't necessarily increase the value of your boat.
5. Clean it
Surprise! Each time you take your yacht on the water, it gets dirty. It's important to rinse your yacht after each excursion because the saltwater buildup can corrode aspects of your yachts. When you do frequent rinsing, it reduces the buildup (which means less to scrub off later). Waxing can also make it much harder for substances (like dirt) to stick to your yacht. It creates a protective layer against debris so you will need to detail less often.
Yachts are an investment and you will lose money to depreciation, insurance, maintenance, repairs, and slip fees, but that doesn't mean you shouldn't buy a yacht.
Sailing is a lot of fun and a lot of our best memories are from time spent on the water.