There is a common thought that buying a boat is something of a waste of money. Many boats suffer from massive drops in depreciation, which means that as an investment tool they are unlikely to give you much return on face value.
However, not every boat will be a poor investment and a reckless use of hard earned savings. You just need to have a proper think about why you want it, what you are going to use it for, and how you are going to keep in the best shape possible.
With this in mind, here are a few questions you should ask yourself before investing a cent in a boat – answering them will tell you a lot about whether you will get a decent return on your investment.
Will you use it?
OK, so first of all,not all investments are purely about money. In simple terms, a boat can give you experiences you can’t get without one. So, if you want to enjoy the freedom of the seas or spend holidays sailing to other ports and countries around the world, your investment will be well worth it.
Can you make a business out of it?
Boats have a massive potential for business purposes. There is a constant need for barges and tugboats, for example, and as long as you buy the necessary equipment – Dyneema towing ropes, cranes, pile drivers and the like – there is nothing to stop you from earning income in many different areas of the country. Fishing is another great example of a boat-based business, or maybe you could use it to take tourists out on trips. But whatever are you choose, make sure you enjoy the lifestyle. Boating business ideas of any kind are not easy, and you need dedication of you want some success.
Can I afford it?
Boats can be expensive, of course – but that’s just the start of your financial concerns. Maintenance, mooring fees, fuel, and permits can add on a huge annual cost for boat owners, and you need to understand that expense before making your investment. Given the short-term depreciation of the average new boat, you need to be thinking long-term if you want to see a return on your investment.
Can I find what I need secondhand?
Used boats have already been through the primary stage of depreciation, so it makes sense to look at the second-hand markets. However, this can be risky for the novice boat buyer, as there are all kinds of things that you need to look for to ensure you don’t buy a dud. With this in mind, it’s worth hiring a professional boat expert who can advise you on your purchase. There will be a cost involved, of course, but as with any investment, this is all about limiting your risk.
As you can see, the old tale of boats being a poor investment vehicle isn’t quite what it seems. The key is to get use out of it – even if it gives you pleasure and the chance to escape on a regular basis, the enrichment it can give your life is just as much of a real investment as a nice cash return.