Boats are infamous for their high prices, and generally, they’re known to depreciate over time. Looking at it from a perspective of buying and selling boats, it may sound like boats are simply not a good investment. However, it’s not a lost cause entirely- there are alo multiple ways to increase your wealth while the boat is still in your hands.
The following is a complete guide on whether boats are a good investment, as well as how to make money from boats in ways you might not have considered.
Do Boats Hold Their Value?
Before we get to the silver linings, we’ll start with some hard truths. As a rule, every type of boat tends to depreciate in value over time. In some cases, boats can be worth 40% less than what you bought them for in as little as five years’ time.
This is most true when it comes to new boats. Putting a new boat to use for as little as a few hours is enough to trigger a plunge in value. Simply put, there is no guarantee that selling your boat will result in financial reward.
Changes In Recent Years
There have been some changes to this rule in recent years, though. While the Covid pandemic has hit the American economy hard, the boating industry has been excelling. Not only did most brands see a notable rise in boat sales, but some brands saw sales rocket; Yamaha WaterCraft saw sales spike by a staggering 154% back in April 2020.
It’s not hard to imagine what led to this change. During the initial stages of lockdown, a lot of people suddenly had more free time than they knew what to do with. So they finally pursued the hobbies they’d been dreaming of pursuing for years: writing, baking, sports… and boating.
Not only was buying a boat a great way to get out of the house, but it also meant that, in a time when the reality of vacations was rapidly shifting (the implications of cruises, even when they were eventually allowed again, was a huge turnoff for many), people could vacation on their own terms. Spending some time on a boat is also quite literally a way of escaping the pandemic. Having that freedom would’ve felt like quite the relief.
So, while it’s hard to predict how long this trend will continue, boat sales are, at the moment, far higher than they were just a few years ago. Despite this, though, you should still be considering all the factors addressed in this article when considering the purchase of a boat.
Which Are The Best Boats To Invest In?
Generally, the worst type of boat to invest in is a bow rider (also known as a dayboat or a runabout, a bow rider boat is a fiberglass hulled boat). Reports show that, historically, a bow rider usually has just 66% of its value remaining after 3 years, 57% remaining after 5% years, and a measly 34% remaining after 10 years.
But the bow rider is not the only boat known to depreciate in value. In fact, most types of boats are likely to be worth far less in just a few years time. There are some exceptions, though, the main one being fishing boats.
Unlike other boats, sailing boats tend to maintain their value quite well, at least in the first five to seven years. This applies to both fiberglass sailing boats and aluminum sailing boats. It’s vital, though, that you’re taking proper care of the boat. If you let yourself neglect it, then it’s far less likely to hold its value.
Reducing The Cost Of Owning A Boat
When owning any boat, ongoing costs are unavoidable, which is mainly due to the fact that boats require a significant amount of maintenance. But if you plan ahead, you could potentially cut the costs of owning a boat by half.
Mechanics will often charge an exorbitant fee for something as small as a fuel filter replacement. But if you make an effort to learn how to fix things for yourself, there are multiple boat problems you can solve without ever having to call up a mechanic, such as draining the engine oil, changing batteries and belts, as well as preparing your boat for the winter.
Even if something seems on the trickier side, like a broken propeller or piston, it might still be worthwhile to look up some DIY tutorials online. It might turn out that you’re more than capable of fixing something without the help of a mechanic, saving you huge maintenance costs.
Another way to reduce ongoing costs is a very simple one. By simply refusing to buy additional devices for the boat that aren’t absolutely necessary purchases, you’ll be saving money that could be spent on repairs further down the line.
While it may seem ideal to have a satellite phone, a plotter, or radars, all you really need in a lot of cases is a phone. Extra devices can often cost several thousands of dollars, and that’s before considering all their service charges. If you know for a fact you won’t be using such devices a lot, then it’s probably a cost you can avoid.
Tips For Investing In Boats
There are multiple ways to ensure you’re making the most of your investment. The most crucial one would be to buy a used boat. It might be tempting to get the flashiest new boat available, but as with any vehicle, used boats are far cheaper, and come with slower depreciation.
It’s of utmost importance that you look after your boat as best as you can. Boats that have been shown genuine care have a far longer lifespan than boats that have been neglected, as well as a higher resale value. Be sure to practice routine maintenance, and if you become aware of any issues, try to resolve them as soon as you can.
Ways To Make Money With Your Boat
Besides selling your boat, there are several ways through which you can make money with it, including vending from your boat, charter fishing, running sight-seeing tours for the public, and peer-to-peer boat rentals.
It may be a little tricky to acquire the license, but if you’re successful, vending from your vessel is a great way to make some easy money. The most common method of vending is setting up a concession stand. Depending on the location, you could make a fair amount of money at the docks if you’re willing to hook up a grill to sell burgers and hot dogs.
You can also set up a livewell, which would allow you to sell live bait from the comfort of your boat. The only real downside to vending from your vessel is that, in many places, it won’t be a viable option all year round. But if you think it’s worth the extra effort, vending is a great way to make some extra money with your boat.
Charter fishing can also be a decent money maker- if you’re already an experienced angler, of course. You’ll need a USCG Captain’s license, and there may be other licenses you’ll need to acquire depending on your location, but it’s well worth doing.
Many people offer the services of their boat as a full-time job. Obviously your success will depend on a number of factors that are out of your control, like the weather and mechanical problems, but unless you’re particularly unlucky this is a reliable way to make easy money.
You can also provide sight-seeing tours to the public. Once again, you’ll need to acquire a Captain’s license, and you’ll naturally need to live somewhere that gets a lot of tourists. But if you’re living in a vacation hot spot, this could be a way to generate lots of extra cash, especially if there’s little to no competition in the area.
The final most common way that people make money with their boats is peer-to-peer boat rentals. This might just be the easiest way to generate wealth with a boat. This works much like Airbnb (you’ll be renting your boat out to mostly boatless mariners), and there are multiple applications/websites designed for this very purpose. The most successful users of the popular app Boatsetter make hundreds of thousands of dollars every year.
While the sales of boats have certainly increased in recent years due to the pandemic, there are a multitude of safer investment opportunities. Buying a used boat and properly maintaining it could result in a profit somewhere down the line, but for the most part, you shouldn’t be buying a boat if your intention is simply to make money.
The only exception would be if you’re attempting to make this your full-time job, and your location and experience meet all the requirements. Otherwise, if you’re buying a boat… just enjoy it!