Few people can offer greater wisdom than Sailronin on this subject, but you’ve raised a question that more people are beginning to ask. With the price of waterfront property exceeding the cost of many yachts, the live-aboard concept is becoming an option that more people are beginning to consider.
Much of this decision rests on your priorities (and abilities)…
Yachting is a unique lifestyle. It may cost more than conventional housing, but there are many aspects that are beyond compare. You have the option of tossing lines and going in search of a new view! In that course, you also have the opportunity to meet some very interesting people, most of which share your passion… a love for boats and being on the water. For some of us, the latter is a form of therapy.
Whether you live on water, or live on land, both require maintenance. Personally, I would rather polish, paint & varnish… then spend my weekends cutting, clipping & weeding. I also like the option of taking my home with me while I explore new vistas… not to mention the serenity that comes with being on the water.
For a lot of people that have been tied to work, family and commitments for most of their lives, a yacht offers something of growing importance… freedom. The ability to leave it all behind, minimize the baggage and fulfill a dream. About the only thing you leave behind is the convenience of a garage.
I think owning a yacht, or more specifically, living aboard… is becoming a more viable alternative. When you do a cost comparison between home ownership and a live-aboard, the numbers are beginning to narrow.
For example, let’s compare a $1 million yacht to a home of equivalent value. If you are not in the position to pay cash, the purchase of either will require a substantial down payment. This is where one of the most noticeable differences will occur. A home mortgage can be obtained for 30 years, whereas a typical boat loan is only up to 20 years, which means a higher payment although both loans are available at similar interest rates. (Finance gurus; please correct me if I’m wrong on this). If we set aside the monthly payments, then we are left with taxes & insurance for the home… or dock rent and insurance for the boat. For the moment, let’s exclude maintenance.
In Florida, property taxes are equal to approx. 2 percent of the assessed value. On a $1 million dollar home, that works out to $20,000 a year, or $1666 a month. With a boat, you don’t have yearly taxes… you have dock rent. Around most parts of the country, with the exception of the larger, upscale marinas, this amount is sufficient to cover a slip. In essence, you could say dock rent and property taxes are about equal and both represent money that we are throwing away.
Next… insurance! In Florida, we have these waterborne tornadoes of magnanimous proportions that have been stopping by to visit more frequently. The cost to insure a home has been relatively affordable for the past, oh… 100 years. THIS… has all changed over the past 2 years. If you can even find/get insurance for a home in Florida, it will easily be equal to the policy for a yacht of the same value. Roughly speaking, I would consider the insurance equation a wash too. Boat or house… about the same.
What remains is… maintenance. This is a HUGE variable, but one thing remains constant… boats must be maintained and it’s usually more expensive than a house. Without going into a long dissertation, a newer boat will cost less to maintain than an older boat, but of course the newer boat will cost more upfront.
A standard, industry measure projects a boat will cost you 10-20% of its value to maintain on a yearly basis. This number usually includes the items listed above, in addition to a crew. If you purchase a yacht of reasonable means and size, this number can be greatly reduced by minimizing crew and performing much of the maintenance yourself. I can tell you the cost of maintaining our own boat is far less than the rule-of-thumb above. I would put the number at less than 5%. If you compare this to a house, it is probably higher. But this also has a lot to do with the condition of the house and your addiction to Home Depot.
I’m drawing simple analogies and using very rough figures, but living aboard a boat can be a reasonable alternative. Like a said earlier, it’s a matter of priorities.