Thursday, November 7, 2013

Hey Buddy, How Much for That Boat?

In the process of shopping for our future home afloat, this is a very common question on my mind. Of course, the real question I grapple with is "What is that boat worth?" Being a novice boat buyer, I entered into this process not really knowing much about the market.  Having gone through two contracts as well as a couple other offers and a lot of market analysis, I figured it was time for a "what I've learned thus far" on the subject.

Now before you go thinking what I write below is gospel, remember that we only started looking at boats in earnest in April (that's about 6 months ago folks). Also remember that we are shopping for used live-aboard catamarans in the sub $200,000 (US) category. And some of this is rather obvious, but I've found that with all the info swirling around on one's mind, sometimes even the obvious statements are worth mention.

The first thing that I've learned is that every used boat is unique.  They may have looked the same when they rolled off the assembly line, but they were probably unique by the time they were sold and certainly are by the time they are re-sold one or more times. Comparing live-aboard boats is a lot like comparing furnished houses combined with cars.  Each one has unique furnishings and touches, included equipment, as well as different levels of wear...and then they have engines and batteries and other vehicle aspects too.  This makes attempting to determine a reasonable value for a boat a very difficult task. I think most brokers, be it house or boat, learn the standard capitalist answer to the above know...the "it's worth whatever someone is willing to pay for it" answer.  That's great in your college Capitalism 101 course, but doesn't really give you much of a place to start when looking at boats. 

A near "bristol" condition FP Tobago.

We tend to start like we do with houses, looking at comparable sales or "comps" as they are usually called in real estate.  Seems reasonable, but there are a couple problems with it.  First, there are far fewer boats of a given type than there are houses in a neighborhood, so a comp list of recent sales often must go back years instead of weeks or months as you would for a house.  Another issue is the wide variance in condition and equipment. Obviously a former charter boat with minimal 1990's electronic equipment (often not working), original sails and upholstery, etc. would be a far different value than a non-chartered boat of the same age where the owner has updated the equipment and interior as tastes and technologies have changed.  And yet another differentiator is location. If you are lucky enough to find a number of "comps" it is not likely they were sold in the same area in which you are looking. Boats in less tropical climates tend to age better than those subjected to the tropical sun, and this impacts the value.  Boats located in hard to get to remote locations or places people don't really want to spend as much time in tend to sell for less just as boats in hot boating markets or where the supply is limited relative to demand fetch a higher price.

Leopard in fair condition when we saw it.

So, you collect what data you can and try to come up with an average.  What the average boat, in average condition, with average equipment should cost...approximately. As a software engineer with a minor in mathematics, I prefer looking at hard numbers. In my many attempts to figure all of this out, here are some rough guidelines I've found seem to hold least for the catamarans in the price range I've been looking at sold in the United States (this excludes boats in "restorable/salvage" condition, see definition below).
  • Boats sell for about 12% less than they are listed on average.
  • Boats used in charter take about a 10% hit in price.
  • Location can make a 10% difference in price 
    • US non-tropical locations near the top
    • Remote (harder to get to) tropical locations near the bottom
  • The condition of a boat can make about a 30% difference in price (not including salvage).
  • 3 years seems to be a reasonable time frame when collecting "comps".
  • There is little difference in price between older and newer versions of a given model, prices are mostly based on condition.
  • Buying a boat with the equipment you want is cheaper than buying a cheaper boat and adding all the equipment yourself.

As condition has such a large impact on price, it also helps to have a common definition of the condition of a boat.  The following seems to be a pretty "standard" definition of several surveyors and surveyor organizations.
  • Excellent/Bristol Condition: A vessel that is maintained in mint condition or "Bristol fashion" – usually better that factory new, loaded with extras (very rare).
  • Above Average Condition: A vessel that has had above average care and maintenance and is equipped with extra electrical, electronic, and other gear.
  • Average Condition: A vessel that is ready for sale (or ready to sail) requiring no additional work and normally equipped for her size.
  • Fair Condition: A vessel that requires typical recurring maintenance to prepare for sale.
  • Poor Condition: A vessel that requires substantial yard work (in excess of normal maintenance items) and is devoid of extras.
  • Restorable/Salvage Condition: A vessel where enough of the hull and engine exists to restore the boat to usable condition.

So, with this information you can start to get an idea of what you might end up paying for a given catamaran when all is said and done.  Here's an example using a fictitious catamaran:
  • You are looking at a 1995 WidgetCat (I told you it was fictitious) in above average condition and started it's life as a charter boat (engines both have 5000 hours).  They are asking $190,000
  • Assuming you don't have comps available, you look at the available listings:
    • 1993 WidgetCat $220,000
    • 1994 WidgetCat $180,000
    • 1996 WidgetCat $200,000
  • The average asking price is $200,000 so the average sold price is probably around $176,000.
  • Since the specific boat is a former charter, expect 10% less than the average.
  • Since the specific boat is in above average condition, expect 7.5% more (30% range gives 7.5% per step with average being the starting point).
  • So, the final sales price for this 1995 WidgetCat should be about 2.5% below average (10-7.5) or about $171600.

Obviously this works a little better the more accurate data you have, for instance actual sold comps instead of average asking price.  But, hopefully it will give you some idea of where to start.

This isn't any sort of guarantee, and for every rule there is an exception. Also remember I'm of very limited experience in this take this for what it's worth (and for what you paid for this advice :-) ). And, as I stated earlier, every boat is unique.  All of this calculation of averages and estimates are just that, averages and estimates.  I guess the Capitalism 101 answer is ultimately correct...but I hope this helps folks figure out where to start the negotiations.

 So, what do you think?  For those that have purchased boats, does this sound like what you found?  For those just starting to look, does this help any? Anyone out there want to comment on differences with the monohull market or different price ranges? Am I just an engineer trying to apply some order and logic where there obviously isn't any?


  1. Sorry to say, trying to make sense of the current monohull/catamaran market is akin to wrangling cats... It's all over the place and the exceptions far outnumber the rules.

    With so many boats for sale it should be a buyers market but I seldom see boats worth what folks are asking for them and as a rule of thunmb most asking prices are a lot more over inflated than the 12% you mentioned, Mostly, I suspect, due to the high number of newbie buyers with rose colored glasses.

    1. I guess that is one vote for the "applying logic where there is none". ;-)

      I've definitely seen asking prices well over the 12%. In the limited comp data I've seen, the 12% was about average...of course that could mean that a lot of people are just overpaying for the boats.

      I've been trying to lighten the tint of my rose colored glasses...and your blogs have helped, btw.


    2. And...a little fun on the cat wrangler I've had previous jobs described as such...

      EDS Cat Wrangler Commercial

  2. Enjoyed the post and I'm going to keep it for reference. For a newbie (like me) it is a helpful starting point at the very least. Winter has arrived. I'm wishing for warm beaches and palm trees while counting the years till I can start my own search for a floating home.

    1. Hi Dave,

      Glad you found it has certainly been interesting trying to figure all this stuff out. I'm sure the figures will change over time, but figured some insight into how things seem to be going right now would be of interest.

      And I hear you about the palm trees...specially while sitting at my desk here in Colorado. For some reason I seem far less cold tolerant than in previous years.


  3. Great post - really useful information! We'll be heading back to the States next year to buy a new (to us) and larger boat and I've been finding that there is so much to think through and so many different choices you can make that it can be a bit overwhelming at times. Especially when it is what you will be living on and you really want to get the decision right.

    Good luck with your search - I'm sure the right boat is out there for you.

    Cheers - Ellen |

    1. Hi Ellen,

      Thanks. It can definitely be overwhelming. You are spot on with wanting to get the decision right, and we hope this latest contender is the one...we should find out soon.

      Good luck with your adventure and next boat search as well!


  4. Hi Mike,
    Great post, excellent information.
    I have only recently began searching the market for similar style cat to yourself. The models you have been looking and blogging on, are those which I have been favoring. (that's actually how I found your blog site). I must admit, I hadn't looked enough about the Leopard 38 until reading your blog, it gives me another boat on my list. I am hoping to purchase around the middle of next year, so your post is extremely helpful.

    1. Hi Alan,
      Shopping for a used boat is definitely an interesting experience. Best recommendation I have for you is to try and see as many different models that you can...even ones you are not sure you'll like. We hadn't originally considered the Leopard...until we finally go to see one "in real life". If there is one thing we've learned, it's that every boat really is a compromise.

      Glad you liked the post and good luck with your search!


  5. A well written blog. I am finding your search for the perfect boat to be interesting. Keep it up and get out here soon! Your gonna love it in the islands..


  6. Nice work. Where were you before we bought Kintala????

    S/V Kintala

    1. l think you had your boat before we even got this crazy idea.

      I just hope it is useful and not leading anyone...including me...astray.