August 16, 2009

The two-boat blues

A FRIEND OF MINE finds himself in the unenviable position of owning two boats. He found and bought the new boat of his dreams while he still owned the old boat of his dreams, so now he has two boat mortgages, two monthly mooring payments, and two depreciating assets growing weeds and barnacles on their bottoms.

Naturally, he has been trying to sell the old boat of his dreams, an aging 30-foot coastal cruiser/racer, but he hasn’t met with much success. As he found out, this is not a good time to be selling a boat. He figures he’s going to have to accept about 60 percent of what he was asking for the boat, maybe a bit less. That’s a drop of about 40 percent from what it was worth just a couple of years ago.

I must admit I can’t find it in my heart to feel too sorry for him. He is quite well off and he can afford to lose a few thousand here and a few thousand there. But he’s not the type to grin and bear it. He frets about it. He hates losing money through no apparent fault of his own.

The interesting thing is that most of the inquiries about the boat have come from men of retirement age. Most of them are looking for a cheap boat to live aboard. It’s very likely that some of them have had their homes repossessed for failing to keep up with the mortgage payments, so it’s not surprising that they’re making low-ball offers on the boat. I don’t know how long they’ll be able to keep up with the boat mortgage and slip fees. If they’ve got any sense at all they won’t even try. They’ll set off straight away on a round-the-world voyage and sell the boat in some foreign land when the economy has improved.

Meanwhile, the message for the rest of us is quite plain: Don’t sell now unless you really, truly have to. And if that’s the sorry case, make sure your boat is painted and cleaned and scrubbed and looking as gorgeous as your girlfriend on the night you first kissed her. That way, you might be lucky enough to get 70 percent of what it’s worth, instead of only 60 percent.

Today's Thought
There is no such thing as “soft sell” and “hard sell.” There is only “smart sell” and “stupid sell.”
—Charles Brower, President, Batten, Barton, Durstine & Osborn.

“They found a hole in the wall that goes around the nudist camp.”
“Oh yeah?”
“Yeah. The police are looking into it.”


Aaron Headly said...

Maybe he should look into storing it cheaply inland. Perhaps even on property he already owns. Boat-movers charge by the mile, usually; it might be an inexpensive move.

Were he to put it on stands near his house, he'd be able to invest a little sweat-equity without having to go all the way to the marina. There'll be a different economy coming after this one, why not wait it out?

Anonymous said...

While I would agree that now is not the time to sell a boat in order to get the most dollars from the sale I think you may have overlooked an important point here.

I imagine that your friend found the boat of his dreams because it too was undervalued at this time. Therefore, selling one boat at a loss in value and buying another at a lower value sort of negates the overall loss to your friend.

Boats have never been a good investment so I discourage looking at them as such. Boats give us pleasure. Weather "Trinka" or the "Maltese Falcon" their sale never provides capital gain. So I would argue then that the cost of having two boats is just another monetary loss that we must face in order to gain pleasure.