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Boat depreciation allowance


Mick in Bangkok

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Might anyone be able to give an indication as to the annual percentage of deprecation one would expect on the value of a canal boat as I am weighting up the pros and cons of spending anything from two to five years as an early retirement plan.

I would consider purchasing a second hand boat of around GBP30-35,000 and wondering what to allow for a reselling price in the future if it were to be well maintained.

Cheers Mick

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I have only ever lost money on one boat.

The other 17 have been sold 'at a profit' if you exclude running costs such as, fuel, licence, insurance and mooring fees'. Any capital investments (such as new canopies, painting etc) have always been re-covered in the selling price.

Just 'buy-well' and sell 'even better'.

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3 minutes ago, Mick in Bangkok said:

Wow that is encouraging, I have been around sail boats and sped boots in the past and the saying is that a boat is like a hole in the water that you through money into.

My retirement plan looks better with each posting, thanks for all the tips.

Cheers Mick

 

As others have said I have owned eight boats and only sold one for less than I paid for it and that was a small loss to achieve a quick sale that enabled me to save thousands on my next purchase anyway. The trick is to let someone else take the huge hit on buying new then buy one well maintained a few years old. New cars crash and burn to nowt whereas boats tend to bottom out and indeed can go up as some of mine have. Your budget is about right for this scenario

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1 hour ago, Mick in Bangkok said:

Wow that is encouraging, I have been around sail boats and sped boots in the past and the saying is that a boat is like a hole in the water that you through money into.

My retirement plan looks better with each posting, thanks for all the tips.

Cheers Mick

 

 

You seem to you seem to be overlooking the fact that owning a boat costs circa 20% of the boat value per year in mooring, licence and maintenance costs. Depreciation is trivial in comparison. 

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1 minute ago, Mike the Boilerman said:

 

You seem to you seem to be overlooking the fact that owning a boat costs circa 20% of the boat value per year in mooring, licence and maintenance costs. Depreciation is trivial in comparison. 

Not sure I agree with that figure.

Just done a quick calc and ours is more like 10%.

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1 hour ago, Naughty Cal said:

Boats do not depreciate in the same way that cars do. 

A new boat will depreciate a lot in it's first few years just like a car, to then bottom out, then slowly rise with inflation.

1 hour ago, mrsmelly said:

As others have said I have owned eight boats and only sold one for less than I paid for it and that was a small loss to achieve a quick sale that enabled me to save thousands on my next purchase anyway. The trick is to let someone else take the huge hit on buying new then buy one well maintained a few years old. New cars crash and burn to nowt whereas boats tend to bottom out and indeed can go up as some of mine have. Your budget is about right for this scenario

The rising in price is more due to inflation, rather than the boat tho so it's more likely still depreciating. 

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That last statement will surprise some people, but it does appear to be so. I keep an eye on the selling prices of Springers, and they do appear to be generally higher than they were when I bought mine five years ago.

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I hope I have included most thins as per below based upon 9 months on board  
  57 to 60ft   
  Initial investment   
  Purchase cost  £35,000
  Fit out works £5,000
  Survey £300
  Lift out of water per time  £100
    £40,400
     
  Deprecation = 2.5% annum £1,010
     
  Annual maintenance & upkeep  
  Lifting out of water plus pressure wash x 1  £170
  Anodes & blacking GBP500 x 2 years  £250
  Boat safety certificate GBP40/4 years  £10
  Mooring GBP200 per month  £600
  Dry storage £0
  Canal & river license 12m 870/6m522 £783
  River only license 12m 522/6m313 £0
  Water £0
  Tools £100
  Boat upper maintenance GBP8K/15 years £533
  Boat electrical maintenance  £200
  Boat engine maintenance  £200
  River canal rescue membership (optional) £150
  Diesel fuel 1L per hr. x GBP0.9 £1,215
  Cooking gas GBP26/btl., 1 per month £234
  Electricity £0
  Coal GBP11/25kg summer 3 bags month £297
  Additional clothing (wet gear etc.)  £400
  Maps, books etc.  £100
  Phone & internet GBP40/month £360
  Insurance, theft, fire & flood per year £160
  Misalliance £250
     
  Total cost per annum £6,012
     
  Months on moring 3
  months on board  9

by the way what is a springer?

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1 hour ago, Mick in Bangkok said:

Wow that is encouraging, I have been around sail boats and sped boots in the past and the saying is that a boat is like a hole in the water that you through money into.

My retirement plan looks better with each posting, thanks for all the tips.

Cheers Mick

 

Narrowboats are not at all like yachts or cruisers where you are selling to a limited market.  In the UK a narrowboat is one of the easiest things there is to sell, there is always someone looking for one, especially in the middle - low market region, and most buyers are pretty ignorant, naive, and idealistic.  

I don't think you are far out with your cost estimates, though I suspect in reality you'll spend a lot less on diesel.

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25 minutes ago, Neil2 said:

  In the UK a narrowboat is one of the easiest things there is to sell....  and most buyers are pretty ignorant, naive, and idealistic.  

 

As a good 90% of CWDF members have been amongst their number at some point (and some are now), that view may not enjoy great popularity.

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29 minutes ago, Machpoint005 said:

I thought the rule of thumb for depreciation on a new boat was: half its value after ten years, another quarter in another ten years, then after that it all depends on the standard of maintenance....

I would be inclined to say the depreciation is more linked to the price of a new boat of the same spec rather than the price actually paid when bought first, so in 20 years the old boat will be more like a 1/4 of the price of the same new one - and probably quite a bit more.

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5 minutes ago, Horace42 said:

I would be inclined to say the depreciation is more linked to the price of a new boat of the same spec rather than the price actually paid when bought first, so in 20 years the old boat will be more like a 1/4 of the price of the same new one - and probably quite a bit more.

Yes, that's fair enough.

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We learned a valuable lesson when we sold our first boat. We needed a quick sale in order to fund the purchase of another boat which I knew wouldn't be around long. We priced the boat at a loss to get a quick sale and were inundated with interest. 

Less than two years later it appeared for sale again and sold for more than we had originally paid for it. A hard and valuable lesson was learned!

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1 hour ago, Neil2 said:

Narrowboats are not at all like yachts or cruisers where you are selling to a limited market.  In the UK a narrowboat is one of the easiest things there is to sell, there is always someone looking for one, especially in the middle - low market region, and most buyers are pretty ignorant, naive, and idealistic.  

I don't think you are far out with your cost estimates, though I suspect in reality you'll spend a lot less on diesel.

Cruisers are pretty easy to sell to the uneducated as well.

We see it on a regular basis!

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