The Boatist

Sailboat Ownership, Translation Work and Tales of Minor Adventure

Retire early, be passionate, don't worry, die poor

Wednesday, February 25, 2015

How to Buy a Sailboat - Do the Math

Cheap Sailboat

If you're planning to buy your first sailboat or even a different type of boat, don't ask how much it will cost. Instead, ask how much it's going to cost you

Although you can easily answer the first question by checking price tags, you'll probably have no idea know how much it's going to cost you until it's too late.   

Two Scenarios

Scenario 1
A friend of mine bought a 39-foot sailboat in the year 2000. It was an unfinished, overbuilt go-anywhere cruiser. In 2002, after having blown his budget, it was ready for the Atlantic crossing but still unfinished, quite rudimentary and naked: no roller furling, no self-tailing winches, no fridge, no radar, no dodger...well, not much of anything. The price tag, however, had reached €100,000.

During the 13 years since the Atlantic crossing, he has spent €66,000 euros on boat operating costs and a few minor upgrades, but the boat is still naked and now even a bit scuffed.

Let's do the math:
   Initial cost                                        €100,000
   Operating costs/upgrades                   €66,000 
   Total                                                 €166,000
   Minus optimistic resale value          - €50,000 
   Total spent in 13 years                   €116,000

So, he wasted spent €116,000 in 13 years, which is equivalent to €9,000 per year, not including his labor. Ouch! I didn't know he was so rich, you'd never guess it by the car he drives, the clothes he wears or the restaurants he eats at...to think of it, he rarely goes to restaurants. What a cheapo!

Scenario 2
I have another friend who, coincidentally, 13 years ago purchased a roomy second-hand 26-foot well equipped production boat in great shape for €35,000. He spends about €2,000 per year to run it and does very little work other than keeping it shiny and clean.

Let's do the math:
   Initial cost                                          €35,000
   Operating costs/upgrades                  €26,000 
   Total                                                  €61,000
   Minus realistic resale value             - €20,000 
   Total spent in 13 years                    €41,000  

This owner spent €41,000 in 13 years, which is equivalent to €3,150 per year.

That's a staggering difference between the two scenarios. Additionally, we could also say that owner 2, besides spending 70% less money, also enjoyed his boat twice as much. Therefore 3 x 2 = 6 times better investment.

Also remember that these two owners keep their boats at the same marina and use them for nearly identical purposes: 1 month of coastal cruising to the Algarve in summer and day sailing in between. In reality, owner 1 did very little day sailing because he was too busy doing boat work and also because of the hassle of spontaneously taking out a bigger boat for an afternoon sail.

Admittedly, owner 1 crossed the Atlantic, whereas owner 2 would never dare do so in his smaller production boat.

Please, keep in mind that these are facts, based on people I know very well, and not mere theory. I'm aware that every boat is unique and every owner is also unique, which can greatly alter the equation. But I know a lot of boat owners, and I could make many other comparisons with similar results.

Also note that these observations apply to local sailing and occasional coastal cruising, not to bluewater cruising or living aboard full-time. That's a completely different gig.

With this in mind, I have come to a few conclusions about boat ownership based on real life experiences - mine and of people I know well.

Never build a sailboat unless it's small or you don't like sailing anyway.
The resale value of your work of art will be a tiny fraction of what you spent - if you actually finish it. I've seen enough boat-building tragedies to make me want to cry and one, in particular, that would make the very devil cringe.

Never borrow money to buy a sailboat
Owning a sailboat is a horrible financial investment. Borrowing money to pay for a boat is like borrowing 100-dollar bills to light cigars with. 

New vs. Used Boats
        
  New Boats
  • New is good for buyers looking for ways to spend their cash. That's what money is for, right? 
  • New is peace of mind. You can wear white pants aboard, go sailing or sip drinks in the cockpit looking sophisticated instead of sweating down below like a grease-monkey boat slave.
  • If you buy a smallish new production boat, say 30 feet, it will depreciate at least 5,000 euros per year over a 10-year period. If you buy a new 50-foot production sailboat, it will depreciate around 12,000 euros per year during the same 10-year period, not to mention the exorbitant cost of maintaining it. After 10 years, boat depreciation begins to diminish if the boat is kept in reasonable condition...but the cost to  maintain it will begin to increase slightly.
Used Boats

A 10-year-old boat may have a neglected or abused engine, it may have been run aground on a rock or had holes drilled into the deck without being properly sealed. Other than that, what you see is pretty much what you get.

An older boat may look incredibly pristine and boast a good engine while concealing, pitted chainplates, mushy deck or hull coring, unreachable rot in interior woodwork, a corroding rudder post or fatigued rudder frame, messy wiring, questionable mast fittings, etc.

Used sailboats can be classified roughly into 4 categories, mostly depending on their age, but not necessarily so:
1) All systems operational
2) Requiring some upgrades
3) In need of many upgrades
4) Derelicts

All systems operational
In the first 10 years sailboats depreciate at about 5% per year. A 10-year-old boat will give you the biggest bang for your buck. And you don't need to be a genius to do your own survey. If it "looks good" and the engine doesn't cough up black or blue smoke or overheat, you're in business. I believe that surveys are more important for older or larger boats. Nevertheless, if this is your first boat, hiring a surveyor may be a good idea.

Requiring some upgrades
You can get real boat bargains here, especially in well maintained boats reaching the 30-year mark. Within this time frame sailboats will most likely require upgrades, especially new sails, dodger and sail cover canvas, electronics, etc. Some have been partially or fully upgraded, some have all the original equipment. You have to do your math. Make a list of what it needs, calculate the extra cost and labor and then compare the final price to a similar boat in better condition.

It may have a questionable engine, a scuffed interior, a suspicious rudder, beer-belly sails, toothy anchor chain attached to an ancient plow anchor, the dreaded mushy deck core, a toilet that squirts back at you. It may also be in pristine condition, for a price of course. These boats may be cheap but not dirt cheap. Do the math.

In need of many upgrades 
If you buy a sailboat that's falling apart, remember this: an old sailboat hull is not worth very much. For example, if you buy an old hull but you need to repair/upgrade most of the basic equipment and start tearing out and rebuilding some/all of the interior, the final cost will be higher than buying a similar-size boat that's ten years old. 

"But I'll have a new engine, new sails, new winches, ...." you may argue, "It'll be like a new boat!" To which I reply, "a 10-year-old boat is almost new and you can start sailing the next day instead of spending all your free time researching and working for the next 4 years, with the added risk of not doing it properly, of ending up with an old-amateur-rebuild-looking boat. 

Derelicts
Derelict boats have many uses: if made of wood, it's great for firewood; if made of steel, you can sink it and create a fish haven; if made of fiberglass, you can paint it and place it in your backyard and make a playhouse for the kids or an interesting place to hang out and write blogs. The possibilities are endless.

What sailboat would I buy now, if I din't already have one?
Because I'm living in Europe, and because of the damn EC boat import rules, I'd have to buy an EC approved European boat. Simply put, I'd go for a 30-foot €40,000 production boat. Low maintenance, easy to handle as I get older, lots of life left in it, enough room for me and the occasional crew member/members, decent turn of speed and, most important, low operating costs.

I also did the math for another interesting scenario:
Let's imagine I traded my boat, Jakatar, for the aforementioned 30-foot €40,000 sailboat. What!!! Are you crazy? You wanna give your boat away?

Let's do the math:

The cost of keeping Jakatar for the next 15 years will be about €4,500 x 15 = €67,500.

The cost of keeping the said 30-foot boat for the next 15 years would be about €2,500 x 15 = €37,500.

That's a difference of roughly €30,000 euros. If you look at it from another perspective, this means that, in reality, by saving €30,000 I would be receiving the equivalent of €70,000 for Jakatar. It also means that I could retire 2 years earlier, have more fun, less work and, perhaps most importantly, have a boat I can handle single-handed when I get older. Scary thought, I tell you.

Notes:
  • Not applicable to small boats, say, about 20 feet and under. These smaller boats usually have an outboard engine and very little equipment or interior furniture. 
  • There are many exceptions that will prove me wrong. But that's like saying "my grandfather was a heavy smoker and lived to be 94, so smoking isn't bad for your health."
  • Not applicable to people who get a lot of satisfaction from restoring an older boat. Someone once told me he got way more pleasure from fixing than sailing. Can't argue with that, it's a perfectly legitimate pastime and probably far more prevalent than we think. I too enjoy many maintenance tasks on Jakatar, but up to a limit, after which it becomes a burden and no fun at all.

Monday, February 23, 2015

Anchoring in Alcoutim

anchoring in Alcoutim

It's been 4 years since I was anchored in Alcoutim. We just visited by car, and all I can tell you is that my body slumped as I watched an "early-retired couple" dock at the town's free pontoon looking like a million bucks.

boat dock in Alcoutim

Why? Because "watching it" is a damn poor substitute for "doing it". It's unhealthy, I tell you.

mooring in Alcoutim
No schedule, no utility bills, no hassles - 99% of people would die of boredom, I hope you're in the 1% category.
restaurants in Alcoutim
No it's not a retirement home. It's a restaurant and we ate here because that's where I ate when I was here by boat, and I had grilled cuttle fish again. Four fish dishes, wine etc. for 35 euros. The place ain't hopping this time of year (although there were some English-speaking blokes beside us) but it's got charm and an outdoor patio for summer time.
The first night we stayed at a farm bed & breakfast near Vila Real de Santo António located at the mouth of the Guadiana River. 
bed & breakfast near Monte Gordo
They had donkey rides, but apparently the donkeys had been let out as part of a live nativity scene and were returned looking like starving skeletons. 
Rooms in Villa Real de Santo António
We were told that a lawyer sold this old majestic hotel, which belonged to somebody else, and skipped town with the money. Now it's for sale again, by the real owners.
night life in Vila Real de Santo António
Getting older, getting crazier.
We spent the second night farther inland at Reguengos de Monsaraz near an old fort way up on a hill.
Rooms in the middle of an orange grove. The oranges were in season and delicious.
bread and breakfast in Monsaraz

Typical street within the castle walls.
It was a fun trip. By the time I got home I had mostly forgotten about that boat docking in Alcoutim.

Saturday, February 21, 2015

Talking to Other Sailors

The Dutch Sailor, a blog follower, visited me on the boat on a sunny afternoon during a short holiday in Peniche. Luckily, I was ahead in my work and so we sat down for a long interesting conversation. 

Funny thing, he told me he wants to upgrade from his current 29-foot boat to a 40 footer. I want to do the opposite. It's the old "the dream is always better on the other side of the pontoon" syndrome.

As I talked to this former motorcycle racer turned sailor, freelance engineer...I was reminded that the fun in talking to other sailors is that there's never a shortage of like-minded interests: from anodes to anchors, from transmissions to solar panels.

When two sailors are in the same boat the potential topics of conversation are proportional to their list of things to fix or upgrade. In other words, it's endless. And if sailors live longer than non-sailors, it's because they want more time to finish their list of never-ending tasks. Owning a sailboat is also like having a high-maintenance wife; when you sell it (the boat, not the wife) you lose about as much money as when you get a divorce. [Ana doesn't read my blog, thank God, and I'm confident my female readers will understand that I'm joking...sort of.]

fishing fleet in Portugal
Took this early morning shot shot next to the marina.
In the midst of the conversation, I received a message with a large job for the weekend, for Tuesday to be exact. Absolutely out of the question because I had already planned a road trip to the Algarve, including a stop at one of my favorite anchorages twenty miles up the Guadiana River. More about that in the next post.

Wednesday, February 11, 2015

Oil Change Artist goes Crazy

There comes a time when you may begin to question your sanity. Owning a sailboat will speed up that process with lightening speed.

I've come a long way since the days when I used to change the oil and would spill half of it on the cabin sole soaking in multiple layers of paper towels. That's when I had an electric oil suction pump from hell!! 

In those days I must have also been blind. Even a child could see that the engine sits high enough for an old-fashion oil change - as in unscrewing the drain plug and catching the oil in a container. It took me 8 years to figure that out. Luckily, I'm a bit smarter in other matters of life, or maybe not, as you will soon see.

boat oil change
A garbage bag taped to a guillotined water jug makes oil changes a pleasure.
But I'm making it sound easy, which it wasn't, not this time. Let me recreate the scenario that would have anybody question their sanity. You know, when your start repeatedly asking yourself "am I going f*** nuts or what?"

After draining the oil and removing the old filter without spilling hardly a drop, I realized I had no replacement filter. Can't be! I'm sure I saw it in here with all these fuel filters. Maybe it's at home. I bought three of them, I'm sure I did.

After rummaging through every single storage area twice, there was nothing to do but go buy a filter at the tractor parts store, actually two for €13. 

I was back the next day with the oil filters and screwed one in first thing. There! Now I'm in business. Now I'll just pour the oil...

...what's this? I have three oil jugs on the boat and ALL THREE have about 1.5 liters each. You mean I've been carrying these jugs around for a year, have actually picked them up probably 50 times to get at tools and never noticed that they were almost empty. And more importantly, why do I have 3 jugs each with 1.5 liters of oil. Oh man, I need to see a boat shrink. I'm still puzzled even now as I write this. Weird, weird, I tell you.

But I have money. I know that for sure because I opened my wallet and there it was: three twenties, a ten and a fiver. So off I go to Intermarché (a grocery supermarket) for a jug of Galp 15W40 diesel oil that cost €19.99.

Galp 15W40
Four 5-litre jugs of oil, you'd think I have a 300 hp engine.
So now I have a leftover jug with 1.5 liters to start the collection all over again. 

The transmission was next. I had some Galp Automatic transmission fluid, Type A, but I already knew that. No messing with my head there. I did, however, get the math wrong and poured too much fluid in, which I removed of course. 280 ml + 420 ml = 560 ml??. Yeah, I better see the math shrink too. I used to be brilliant in math. I also used to be normal before I had a boat. Ana doesn't call me Martelo Godzulo for nothing.

Monday, February 2, 2015

Boat Budget

Boat expenses are falling! The time has come, once again, to review my yearly boat expenses.

Rutland 913

From 2002 - when I crossed the Atlantic and sailed into Peniche - until 2012, I was averaging about €6,000 in boat expenses per year. That's way too much for an underpaid translator. I'm now shooting for €4,000 on average: €4,981 in 2013 (including haulout, new dinghy and Rocna anchor) and €3,524 in 2014.

How did I cut costs? 
- by being assigned my own marina berth, which is much cheaper than subletting a spot;
- by reducing the insured boat value, from € 100,000 to €55,000, for a savings of about €400. If the boat sinks, I can get a damn nice used 32-foot boat for €40,000;
- by upgrading only what is really necessary and doing it cheap;
- by not staying at marinas when I'm cruising;
- by using cheaper antifouling paint, for a savings of about €300 per haulout;
- by not giving a fuck about trivialities, such as scraping the flaking paint on the mast instead of painting it.

Expenses in 2014

Date
Item
Quantity
Cost in €
Jan. 25
Circulation tax

85
Jan. 29
Marina 

1,676
Feb. 26
4 m of hose to protect dock lines

12
March 3
10  l of Galp 15W40 engine oil

36
March 10
2 Barlow 20 winches from US $250 + Shipping $47 Import $105


302
April
Two bearings for Rutland 913

25
May 19
Engine battery (70 AH, maintenance free),  previous one still good after 6.5 years, so I paralleled it to the house bank battery)


94
May 19
Squeegee and handle for bottom scraping – no good.

8
June 7
Insurance

586
June 19
Barlow 28 winch on Ebay from US (cheap)

74
July 12
Two LED light bulbs for anchor light

40
July 29
Diesel and gasoline

130
Aug. 5
Diver to look for Rocna anchor/chain in Sesimbra

100
Aug. 6
Two bottles of wine to weep over my lost Rocna
                10
Aug. 7
10 m of 8 mm calibrated chain for spare anchor*

68
Aug. 7
8 mm stainless shackle (pin retention)

5
Aug. 26
Small grapnel anchor (to search for the Rocna)

15
Sept. 2
Rockfish 1.3 kg grapnel anchor to look for Rocna

20
Nov. 4
Magnet on Ebay (in hopes of finding my Rocna)

21
Nov. 14
Shore plug + connections

5
Nov. 26
15m short link 10mm chain for my plow anchor*
chain + knife + engine battery cut-off switch


192
 Nov. 30
2 liters of ATF (automatic transmission fluid, type A)

20

 TOTAL

3,524
* Spare anchors are almost useless if not attached to a least some chain.


No haulout this year. 

I lost the anchor and chain at Sesimbra, so that will put me back about €900 in 2015 for a replacement. My new escape-from-life routine these days implies leaving the boat anchored and unattended in the Algarve for brief periods. Obviously, I need a good anchor and all chain rode - I like to sleep well. On the other hand, I've been told that the insurance doesn't cover losses when a boat is left anchored with nobody aboard. So I do lose a bit of sleep after all.

To counterbalance the cost of buying a new anchor and chain, I'll skip the haulout this year, again, unless the hull is really ugly down there. I'll have to dive soon to check it out. If it doesn't look like Fidel Castro's beard, I'll scrape the worst and adjust to slower sailing/motoring speeds. I'm in no hurry. 

Having a clean prop is what really matters. When motoring, a badly fouled propeller will vibrate your transmission to an early death, make the boat go really slow, heat up the overburdened engine that, additionally, will burn twice as much diesel (at about €1.15 per liter).

I will take the wind generator to the shop once more; if Luis can't fix it, I've already researched a way to install a 100 w solar panel for about €350 euros, including the regulator and mounting on the wind generator pole.

It's no fun being on a tight budget, but it would be absolutely boring if I had millions to spend.