Money and Building Your Team

In So You Want to Buy a Boat Part I, the emphasis was on being really honest about your expectations, where to boat, what type of boat and how to use it. You know what you think you like or don’t like. These next two subjects will further validate your findings and help you meet your objectives.

Managing your available funds is not only an imperative, but it also will allow you to enhance the enjoyment of the new-to-you boat. If you under-fund, your experience will be “underwhelming” if not unpleasant. Buying the boat can be pretty simple. Most likely the purchase will require taking out a boat loan. For boats with berthing, a galley, and a head, there are advantages to financing your boat because the interest on a boat loan could be tax deductible if the boat would qualify as a “second home.” Check with your tax guy. Even for a smaller trailerable or fishing boat, it is best to be “pre approved” for your max loan amount as you enter the final phases of your boat buying experience. Making the rounds to banks, boat finance companies, and credit unions will identify the best deal. If you have gone to a boat show, you’ve seen all the competing loan sources. Each seem to have similar packages and each represents varying degrees of service, so shop, shop, shop.

Beyond the boat loan

The boat purchase is only one segment of the money picture. The other major expenses are insurance, annual maintenance, slip or mooring fees, fuel and consumables, and possibly a cruising kitty. You will need a budget, and each category will carry a different weight based on how and how much you plan to use the boat. Inevitably you will want to upgrade particular items and gear such as electronics, canvas work, and other personal “wants.” That fancy graphic could become a big ticket item.

One of the most misunderstood expenses is that of fuel cost. Higher fuel prices could have a psychological effect to deter the decision to purchase a power boat or using your boat thus defeating the purpose of enjoying one’s boat. Taken as percentage of overall expense, fuel is often the most manageable and less than, say, insurance or maintenance on an annualized basis.

The attendant costs associated with your search are often overlooked. Visiting other areas to check out possibilities will require travel expenses. Suppose you select a boat in an area that will require transporting her to where you plan to play. Transportation, hauling, splash services, insurance in transit, and possible other expenses must also figure into your economic plan. It is imperative that you make and continually revise the money numbers. Crank in a percentage for contingencies. A cruising vacation shortened by taking out a fish pound during low visibility in the lower Bay or grounding by accident and tearing up a wheel will cost some bucks. The emergency haul out and repair will involve funds to cover your insurance deductible. And one would hope that you had also budgeted for TowBoatU.S. or Sea Tow.

Tapping into expertise

Coincident with formulating a budget is building your own search team. You can go it alone but having a team helps to avoid reaching an emotion-based decision rather than one solidly founded in facts. The objective is to have the expertise available to you as you proceed with your search. The three most important team professionals are a broker, a marine surveyor, and the boatyard or marina where you plan to keep the boat. If you plan to keep your boat at home on a trailer when not having fun, a marine service company can provide the same backup. Your goal is to build a relationship with each so they feel they are working for you.

Some used boats are offered For Sale By Owner (FSBO), but most used boats are listed with a broker. Whether a private owner or a listing broker, his or her goal is to sell as high as possible; yours is to get a better deal. The listing broker works for the seller. The maxim that a man cannot serve two masters applies here. A broker who is not the listing broker works for you. Even if the listing is with the firm for whom he or she works, the commission is the same as if the listing was with a different firm. Unless you have a preferred broker, research and interview several who specialize in the type and range of boats you are considering. Once selected, spend time with your broker and discuss those lists you made, your search criteria, and your budget.

As with the broker, a qualified marine surveyor works for you and is your insurance against ending up with a much too big hole in the water to dump bucks into or even the occasional “boat lemon.” A marine survey will establish condition, replacement cost, and insurability as best can be determined and prepare a survey report. Surveying is not an exact science in the sense that not all defects or problems will be uncovered. Unquestionably, a good surveyor is worth the investment. A small retainer to assure the availability of the surveyor before the actual survey may be in order, but it is money well spent. Most brokers have a list of surveyors who they have found competent and have done at least 35 surveys a year. You want a professional; not a hobbyist. 

There are a number of factors to consider in selecting a Marine Surveyor. Verify their credentials in the National Association of Marine Surveyors (NAMS) and Society of Accredited Marine Surveyors (SAMS), the two certifying societies. Pick one who has the most experience in the type of boat you are considering. When deciding on a surveyor, you will need to determine if his services include the engine. Perhaps an oil analysis or other test would be prudent. These will require outside expertise. If a trailer is involved, it may be advisable to consult an outside expert. Will the surveyor be aboard for the sea trial? Most importantly, select the surveyor before you begin the actual search. In that way, you can ask questions about price and boat characteristics. It is important to mention the American Boat and Yacht Council (ABYC), the “technical” core of the boating industry. It is to boats what the American Bureau of Shipping is to commercial vessels. While the overarching technical and safety responsibilities rest with the U.S. Coast Guard, boat manufacturers use ABYC specs, surveyors base inspections on ABYC standards, insurance companies rely on ABYC for determining coverage, and boatyards and repair companies certify their employees and warrant their work based on ABYC. Heavy emphasis is placed on safety, proper materials, standard installations, and procedures. Obtaining a Tech Paper (on holding tank installation for example) from ABYC is difficult and costly if you are not a member. 

A good boatyard

Brokers save you time; surveyors can save you money; and a good boat yard or service company can save you both. This is another often overlooked issue. Unless you own your own slip, you will need a berth… wet or dry. Boatyards and full service marinas have either or both and more. Your needs go beyond just a slip, and a “full service” facility will be able to cover most if not all the requisite services. You will need fuel; do they have a fuel dock or would you need to go to another location? Some folks like pools and restaurants or resident yacht clubs. Research, walk the docks, talk to slip holders beforehand and interview the yard personnel. When the storm brews, you are most likely to be far away from your pride and joy. Will you be comfortable that the yard will take the proper precautions? When something breaks, having to take your boat to another location can be inconvenient. Some yards offer “packages” such as a year round slip, haul, winter storage, commissioning, etc.

All told, picking a yard before you buy is a sensible move. A good yard or service firm, together with your broker and surveyor, have extensive experience in a wide range of boats and can steer you toward a good boat away from the one while “pretty” has a reputation for problems. With the money picture planned out and your team in place ready to assist and advise, you can begin the final steps in your search and purchase.

by David "Merf" Moerschel

If you missed Part I, click here to read So You Want to Buy a Boat?

For part III in this three part series, The Search and Doing the Deal, click here.