The Depreciation of a Wooden Boat

[George.]

How fast will a well-built wooden boat depreciate? Is it a linear function, or are there discontinuities? Is there a point in its life that is the optimal time to sell it, from the point of view of capital recovery?

Is a wooden boat more like a car, in that it depreciates every year no matter how it is kept, or is it more like a house, the value of which can be maintained by proper upkeep and periodic renovations?

[Andrew Craig-Bennett]

The value is abnormally affected by cosmetic condition.

[George.]

Is it like at the boat shows, where a plush interior matters much more than being a good sea-boat? It is much easier to make a wooden boat look cosmetically perfect than to make it as robust, seaworthy, up-to-date, and long-lasting as when it was launched.

[Andrew Craig-Bennett]

Probably.

My boat cost exactly the same as a 4-1/4 litre Bentley when she was new in August 1937.

A quick perusal of the classic car ads finds me three of these for sale at around £125,000 each

Despite all my efforts, my boat is worth between a third and a quarter of that, although, unlike the cars, she is still able to do exactly what she did when new, every day, and she does it rather better.

Conclusion; wooden boats depreciate worse than cars do...

[paladin]

aw, heck, Andrew....my Essex sold new in 1931 for less than $500 and I sold it for about what my 31 footer cost me and still had enough left to cruise for 2-3 years.....


George..it only matters to those that don't know anything about boats and would probably sink it or let it die for lack of maintenance...no matter what the material.

[Bob Cleek]

Well, first you have to figure what you're paying for it new. Then, it's a question of condition and desireability. There's a cachet to certain designs and designers and a few building yards, like classic cars. A 1936 Mercedes is going to fetch more than a 1936 Ford, no matter what the condition.

I'd say boats are about the same as classic cars, though, although there isn't the same demand and hence no "auction market" or "collectors." You can buy a classic auto and store it at relatively little cost, but no so with a wooden boat.

One has to remember the restoration costs that go into the classic cars that bring the high prices!

[Chris Coose]

A fella came up to me yesterday and offered to me for sale his stunning 27' 1954 Maine built cruiser which I have looked over a couple times . Cedar on oak and a 200 HP Volvo diesel.

My wife woke this morning and had a nightmare where I purchased another house and she said,"I couldn't figure what in God's posessed you to do that.

Survey, depreciation, maintenance standards, cosmetics and survey report are all subject to that dream she had...... I'd say.

Still gonna look her over. May work out around 10,000.

[Dave Thibodeau]

I had a 16 foot sandbagger catboat custom built by Michale McEvoy of Battenkill Boatworks . This boat received the Concors de Elegance award at the 1996 Woodwen Boat Show at Mystic Seaoprt.After all was said and done I had about $13000 to $ 14000 invested in the boat.

In 1999 I sold the boat thru a wooden boat dealer located just above Camden Maine (Maine Coast Boatworks ?)

I received $ 7500 net after the sales commission


Dave Thibodeau

[TimH]

Dark Harbor 17-1/2s were selling for about 3k 30 years ago. Now they are about 20k.
I believe they were about $500 new in the early 1900s and a new one today is over 100k.

Conclusion? Wooden boats go up in value :)

[Simon R]

It's an interesting question. When I spent a year living aboard in a marina I noticed that most people spent their weekends on their boat and rarely took them out. They seemed to spend most of the time washing them. I thought it was a bit nuts, perhaps they spent their weekdays washing the car and wanted something else for the weekend. But of course, as Andrew said, value is heavily dependent on appearance.

I think it must be because a boat is 100% structure. If the structure halves in value then so does the boat. Contrast that with a house. In England at least, the rebuild value of a house - which is what insurers want to know in case it burns down - is about 30% of the total (and only about 25% in London). That's the value of the house as a structure. The rest is the value of the land etc. That means that however much you 'improve' the structure of a house you can only increase the value of about 30% of it.

The flip side to this is that renovating a boat may be more rewarding than renovating a house. But I think you have to choose the right boat, very carefully.

[Brian Palmer]

Very few wooden boats sell for their replacement value to anyone but the original owner.

Once they reach a certain value, I think they maintain that value as long as they are well maintained and don't need something major, like a refastening or a new deck.

Once they need something major, their resale value could be pretty much zero, unless you can find the right buyer.

This is my unprofessional opinion based on scanning the classifieds in the back of WBM and seeing what people have posted here and elsewhere.

Brian

[Henning 4148]

If you are talking new boats - I'd say forget about it. It may well sell in 30 years for what you payed for it if kept in very good condition - but chances are you'd still loose the inflation. There will still be a significant loss of value at the start.

If you are talking used boats - now is the time to buy. Find one that has a good reputation, from a good yard and a good designer, built from very good materials, that has been neglected just long enough to look a bit tatty but is still sound. Easier said than done. Buy, bring up to perfect condition and keep it until the next boom with lots of people not knowing where to put their money - you might even make a little money that way.

But - I'd say you buy new or used to own and enjoy and not as an investment and shouldn't think to much about resale value. Owning a boat is about owning a boat, not about owning a boat and making a fortune at the same time.

Apart from that - if you spend most of your weekends and your holidays on your boat and compare that to holiday homes / hotels / charter vessels - wooden boat ownership starts to make economic sense. It's just a question how you look at the figures.

[Simon P]

I'm interested that no-one has answered whether wooden boats depreciate faster than boats made of other materials, eg GRP.

I suspect that, if they do, it's because a wooden boat is more of an unknown quantity. Only the person who made her, or contracted to have her made, knows how well she was constructed. Perhaps this explains why only the original owner buying back a loved boat will be prepared to pay a premium price.

GRP production boats, on the other hand, are like peas in a pod, "all made of ticky-tacky and all look just the same" as the song goes, hence each one will be thought to be more consistent in build quality.
It is however what gives the wooden boat her cachet, her hand built individuality.
For a prospective owner, wood also presents the unknown threats of rot, worm infestation and glue failure. A lot can be covered up with that new coat of paint, some that even marine surveyors can miss. They also leak, even the good ones! (which those brought up in a plastic bathtub world can have trouble coming to terms with)

[NealmCarter]

The smaller the boat, the less it depreciates. Many decades ago I had several Herreshoff 12 1/2s..real ones. I never paid more than $500 for one. You can see several on the market today going for 20-28K ..!

[Willin']

Please don't say you're selling your boat already!

[Andrew Craig-Bennett]

I'm interested that no-one has answered whether wooden boats depreciate faster than boats made of other materials, eg GRP.

I suspect that, if they do, it's because a wooden boat is more of an unknown quantity. Only the person who made her, or contracted to have her made, knows how well she was constructed. Perhaps this explains why only the original owner buying back a loved boat will be prepared to pay a premium price.

GRP production boats, on the other hand, are like peas in a pod, "all made of ticky-tacky and all look just the same" as the song goes, hence each one will be thought to be more consistent in build quality.
It is however what gives the wooden boat her cachet, her hand built individuality.
For a prospective owner, wood also presents the unknown threats of rot, worm infestation and glue failure. A lot can be covered up with that new coat of paint, some that even marine surveyors can miss. They also leak, even the good ones! (which those brought up in a plastic bathtub world can have trouble coming to terms with)

Most wooden boats extant today have long ago fallen off the bottom of their depreciation curve! Those that are built new today are "bespoke" items and they probably have much the same depreciation curve as a Saville Row suit!

There is a class of GRP boats which ought to have motor car like depreciation - the boats produced in such large numbers by the likes of Beneteau, Jeanneau and such like. These are definitely built down to a price, and they are very numerous. I personally doubt if anyone is going to spend time and money replacing systems like plumbing, electrics or even engines with these boats; they are probably going to collapse all at once like a well designed production car.

[Bob Cleek]

Most wooden boats extant today have long ago fallen off the bottom of their depreciation curve! Those that are built new today are "bespoke" items and they probably have much the same depreciation curve as a Saville Row suit!

There is a class of GRP boats which ought to have motor car like depreciation - the boats produced in such large numbers by the likes of Beneteau, Jeanneau and such like. These are definitely built down to a price, and they are very numerous. I personally doubt if anyone is going to spend time and money replacing systems like plumbing, electrics or even engines with these boats; they are probably going to collapse all at once like a well designed production car.

And they do!

[ILikeRust]

Seems to me it also is, at least in part, geographically-dependant. How much a boat depreciates or is worth at any given time in Virginia, for example, might not be the same as that same boat in, say, Seattle. Or Australia.

Anyhow, I have been obsessing over getting an "interesting" boat for a while now, and have spent some time chatting about it with a very knowledgeable fellow I know here in Richmond, VA. He has spent his entire life around boats on and around the Chesapeake and has built and restored many wooden boats. His opinion is that, these days, when you buy an old wooden boat, unless it is a primo, top-class, grade-A+, fresh, new, full restoration, you're pretty much paying for whatever the motor(s) is/are worth.

I've been scouring the used boat market in this general vicinity and it seems to me that theory generally holds up around here. I've seen older wooden boats on the market for what I would consider surprisingly low prices - which makes me think either (A) there is something really wrong with that boat or (II) it really is just the case that so many people are afraid of old wooden boats that you simply can't get that much for them.

I still want one. So I guess that makes me nuts. Well, it doesn't "make" me nuts - I already am that - perhaps it's simply evidence of my condition.

- Bill T.