Ownership Costs

[Mike Vaccaro]

After reading through a recent thread on this site about transom styles, I thought it might be helpful to include some information that we published in the Mainsheet last winter (early 2008) about what it costs to buy, refit and maintain a Catalina 34.  The analysis in pretty un-scientific, but does provide some insight.  Hopefully, folks can add their own experiences and when newcomers search for "Ownership Costs" they find some helpful information.  This was originally written in December 2007, and I should point out that we continue to incur expenses as we ensure our 1988, Hull 563 is properly fit! 

The most interesting price dynamic is the relationship between book value and actual value of the boat.  Only an experienced surveyor or someone intimately familiar with this style of boat can offer a reasonably unvarnished opinon about what a vessel is worth.  Also, keep a realistic view when confronted with "estimates."  The prudent buyer/owner will anticipate more time and more costs than the original estimate.

A few basic rules of thumb:  Equipment refit is generally required at about the ten year point.  Electronics older than 5-years are obsolete, and older than three years really don't have much bearing on the cost of the vessel (even if they are in good working order).  Cosmetics do count--they may not really mean much in terms of price, but they add to curb appeal and they can be indicative of pride of ownership that's also reflected in sound basic maintenance.  Regular haul-outs count, especially in warm salt water environments (a quick dip and look at the bottom and running gear with a dive mask can tell you a lot about the regular care and feeding the boat receives).  Systems = maintenance (corrallary: convenience comes at a cost).  Major systems have about a ten-year life span.  The most important system on the C34 are the sails and rigging--aside from keeping water out of the boat, it should be the focus of attention along with steering.  The second most important system is ground tackle.  With these systems in good working order, you'll have plenty of time to deal with a recalitrant beer chilling device!           

C34 Aquisition and Maintenance Costs

Like any complex machine, there is always a maintenance tax (money, time and effort) to pay to keep our C34's afloat and operating.  Boats require constant attention to keep them in top shape.         

When we bought our 1988, Hull number 563 5 and a half years ago, she was in need of a refit.  After the experience of refitting two older Catalinas (a C25 as well as our current C34) and keeping financial records, it would be interesting (or very depressing!) to look at what it actually costs to own and operate these boats.  This type of self-reflection is not for the feint of heart and is only possible with the help of software that has better memory and math skills than I do.  Additionally, it only accounts for most of our boat expenditures—the myriad of small cash purchases aren't tracked. 

For this non-technical analysis, we looked at two sets of data.  Our own accounting software where the catch-all "Catalina 34 Expense" category has caught way too much in the last five years, and the Catalina 34 for sale listings on the yachtworld.com web site. 

We originally hoped that the refit would be about 50% of the purchase price.  Unfortunately, hope has no bearing on math, physics or boat repair.  We selected a reasonably sound 1988 boat that had sat neglected for a number of years but had been lightly used before that.  Low mileage was a plus in terms of wear and tear, but didn't do a thing to prevent corrosion in the Gulf environment
 
After paying a bit too much ($45,000), we set to work doing enough maintenance to sail her home 48 hours away.  Since we hauled after the sea trial for a survey, we kept her on the hard to put a new bottom on and replace the depth sounder and speed log transducers as well as cleaning all of the running gear and checking the cutlass and rudder bearings.  Four new 6 volt batteries and running lights and enough running rigging to ensure she could sail, we set off to bring her home.  After two days at sea, we had a pretty good "to do" list started... 

Five years and $31,613.23 later, we had a boat we were very proud of.  That works out to a total cost of $76,613.23, or the original purchase price plus 70%.  This doesn't include the cost of insurance or slip fees.       

An old adage has it that you buy boats by the pound but maintain them by the foot.  If that's the case, we paid $3.60/lb and it has cost us $185/foot per year since we've owned her.  This includes the cost of the refit, so it's more reasonable to look at the purchase price as $6.13/lb (original cost plus refit cost) and look at regular maintenance costs over time which works out to about $100/foot per year.  From this, we derived a few rules of thumb:  Used Catalina 34's run about $6/lb (assuming reasonably new sound or refit condition); in addition to slip and insurance costs, maintenance runs about $100/foot per year; and refit costs will run between 50 and 100% of original purchase price, depending on the extent of the work performed and how much you save on labor by doing it yourself—or worse, what you pay someone else to fix after you've tried to do it yourself. 

We didn't have maintenance costs for other boats, so it's tough to cross-check that theorem, but we can look at the data available on line and apply some basic rules of thumb to analyze what it costs to own a used Catalina 34.  In early December 2007, there were 88 listings for used Catalina 34's for sale on yachtworld.com.  This is typically a time of year with a lot of boats on the market, so the cross-section is more likely to be a representative cross-section of the total fleet.

Here are the assumptions we used to analyze the data:  The Catalina 34 displaces a nominal 12,500 pounds; is 34 feet overall, and a basic refit would cost 50% of the purchase price.  We also made the assumption that most boats sell for 90% of the asking price—which was fairly accurate for used C34s when we originally purchased ours based on post-sale data.  We also assumed that if a boat was new enough or in Bristol condition, she wouldn't be in need of an immediate refit—23 of 88 listed vessels met these criteria.  Since it's tough to ascertain true condition from a for sale add, we made the assumption that if a boat beat a certain price point, likely it was new enough or had been sufficiently refit to generate a  sales price commensurate with condition.  This price point was fairly arbitrary and was simply the average estimated cost of a refit boat rounded to the nearest thousand ($80,000, which coincides closely with personal experience).   The data generated by this rudimentary analysis is tabulated below.

                Asking Price      Est Sales Price      Sales Price/Lb    Refit Cost     Total Cost    Tot Cost/Lb     Sales Price/Ft   Refit Price/Ft   Tot Cost/Ft

High          $99,670           $89,703                $7.18              $28,667        $99,325        $7.95             $2638             $843               $2921
Average     $70,581           $63,522                $5.08              $24,094        $80,693        $6.46             $1868             $708               $2373
Low          $41,491           $$37,342               $2.99              $19,520        $62,061        $4.96             $1098             $574               $1825
 

The High and Low estimates are the average plus or minus one standard deviation.  No effort was made to break the boats out by year or separate Mark Is from Mark IIs. 

We offer up this cursory analysis for a couple of reasons.  First, the old adage caveat emptor (buyer beware!) certainly applies.  There are some very good deals to be had and nice used C34s available.  There are also some boats that are getting long in the tooth and would require an extensive refit.  If you are tempted by a low price, be honest with yourself and consider that unless you are exceptionally handy with access to required equipment and an inexpensive place to work, it's likely that if you find a "bargain" you'll end up investing enough that in the end, you could have simply spent more on a different boat up front and ended up in about the same place!  With as many boats on the market as there are, the best "bargain" may turn out to be someone else's refit, which you can usually buy at a discount since the market does a fairly good job of imposing realistic limits on sales prices, aided by surveyors, banks and insurance valuations. 

The second purpose is that a sailboat purchase is more emotional than practical (unless you use it to commute to work or live aboard).  As sailors, we're interested in getting other folks interested in the sport and want them to enjoy sailing and boat ownership as much as we do.  But a lot of good folks end up being surprised by the actual cost of ownership.  Combined with fairly robust maintenance requirements and a good sailing skill-set including seamanship, boat ownership can end up more onerous than fun—and that's when boats end up tied up in the slip or on the mooring and not out sailing.  A little bit of math and the experience of others (one of the great benefits of being a member of the C34 Association!) can go a long way to ensuring that we can pursue our passion and have enough left over for groceries.

Cheers,

Mike

[waterdog]

Interesting.  We bought nice clean, non-upgraded 88 last year.  My brother-in-law is a partner in the boat so I do keep a detailed log on expenditures.   Here's what it cost in Canadian $ for a first year refit - net of the cost of the boat but including moorage, survey, etc.  I'll spend half this figure this year.  Boat still has older sails and standing rigging.   $15 to $20k will bring it to outstanding condition - up from really nice.   

Engine Survey                          Stem to Stern   312
Files / Hacksaw bladeds          Home Depot    27
Pliers,screwdrivers, elec tape          Home Depot           65
Drill & Tool Set                           Costco           109
Mircrowave                           London Drugs   68
Haul Out                                   Thunderbird          186
Survey                                   De Groot          511
Insurance                                  Hub                  800
Moorage                                  Thunderbird         5,414
Zincs for shaft & strut                  Poco Marine           28
Step up Stool                          Canadian Tire   45
Log Books                                  London Drugs   23
Cleaning supplies, brush, oil          Thunderbird           59
Sail Ties                                  Union Steamship   27
Cabin Lights                          Steveston Marine   446
Fenders, VHF etc                          West Marine           591
Webasto Heat                          Nikka                  2,706
Propane Tanks                          Canadian Tire          102
Flag, life jackets, clips                  Canadian Tire           89
Electrical bits                          Thunderbird           9
Galley light install bits                  Union Steamship   12
Plumbing bits, galley drain          Home Depot           14
Galley drain / tools                  Home Depot          126
Pump icebox & hoses                  West Marine          159
Shop Vac                                  Rona                  62
Electrical connectors - heater          Thunderbird           4
Bits for heater / microwave          Thunderbird          45
Chartplotter                          West Marine       1,407
Dodger                                  Master Craft         3,500
CO Detector / Spice Rack          West Marine         130
Permanent Mooring Lines          West Marine          142
Small hole saws for heater           Home Depot          20
4" Hole saw for ducting install       Home Depot          53
Traveller fairleads, tide book          Steveston Marine   30
Speakers                                  West Marine          38
Mast boot                                  West Marine          50
Traveller line                          Gibsons Marina          37
Speaker wire                          Home Depot         10
Connectors, galleyswitch          Steveston Marin       15
Wrenches for stuffing box          Rona                 70
Windlass, Rode, Anchor                  Steveston Marine   1,249
Hardware                                  Thunderbird   28
Oil, ATF, Filters, wrench          Canadian Tire   68
Engine Zincs                          Marine Systems Inc   14
Engine Spares, impe, filter, zinc    Marine Systems Inc   50
Windlass switches                  Steveston Marine   111
Fasteners                                  Thunderbird   8
acrylic sheet for Windlass mount   West Marine   52
Electrical                                    Thunderbird           19
Fasteners                                  Thunderbird             16
Epoxy, driers, glue                  Canadian Tire     41
Fuel filters                                  West Marine             81
Boarding Ladder & caulking          West Marine             55
Stereo                                  A&B Sound           130
Cabinet Latches                          Steveston Marine   118
Topping Lift bits & bosuns chair   West Marine   167
Oil change pumdehumidifier refills   West Marine   39
Y-split duct                                   Nikka                   19
Oil absorb dehum                           West Marine   12
Drill Bits Epoxy                           Home Depot   54
Fasteners                                   Thunderbird   18
Stuff??                                   Thunderbird   35
Deck caps & port seals.                   Catalina Direct   139
Dry-z-air                                   Thunderbird   23
      
      Total                                                 20,087

[Mike and Joanne Stimmler]

Among other things, you also have to be honest with yourself as to how much of the work you can do yourself, or better yet how much do you want to do yourself. Some people love to putter and work on the boat all the time and others just like to sail. In my case I like working on the boat......to an extent. Being that I live in Arizona and the boat is in San Diego, I drive five and a half hours one way just to get there and although we usually arrange to get a long weekend (Thursday night to sunday) we wind up working on the boat at least one of those days and sailing the rest. On the other hand, if you're lucky enough to live close enough to be able to sneak over and work on or play with the boat whenever you have some spare time, then that's great. Lots of variables!!


Mike

[Joe and Carol]

The expense of our Yacht, hopefully, is appreciated more and depreciated less each sailing season.  Together, Carol and I decide what we want, what YachtaSea needs and where to best purchase.  Having a well maintained and updated Catalina 34 is not an inexpensive journey.  I think costs of sailing are justified!   We have spent well over $7,000.00 getting our 1987 up to our standards.  Comfort, safety and usability costs are a necessary part of sailing.  It is wise being ready to spend extra in making ready a sailboat, not only after purchase but continually in ownership.  I never ask anyone what they spend on their boat for I can tell just by looking.  Best of Luck!  Will be shopping the Annapolis Sailboat Show in October!

[Chris Martinson]

Mike and others:

How are you handling the insuracne for your boat?  Are you insuring it for cash value and if so - the purchase $ or upgraded $?  or replacement cost?  Any figures on comparison?

Chris

[RV61]

Chris,
On the insurance side I have it insured at what is called agreed value in other words the survey said it was worth when fixes where complete  and how much i wanted it insured for. In my case the agreed value is close to what the market value would be worth after I fixed it up to good market condition. In other words it is insured for more than the purchase price but at approx. market value back when I bought it. I will say if the boat suffered a total loss my insurance amount would cover the purchase price plus fixes to good condition but upgrades expenditures would be a loss.  I decided it was not Worth the effort or  increased insurance and new survey costs to increase the agreed value  by 5 to 6k of upgrades as a total loss is fairly unlikely.  If it does ever suffer a total loss I am out the upgrade costs.
Hope that helps.
Rick