Want to live life on the water? Today, more than ever before, it’s possible to buy a yacht and live aboard it as your primary residence. Many young people are now making their first home a boat. If you’re not a sailor but would like to become one, there are many things you need to know before buying a yacht. There are numerous costs associated with the purchase of a new or used boat—not just the initial price tag but also ongoing expenses. The cost of buying and owning can be significant, so proceed only if you have the required financial resources and time commitments. And remember: If you buy an older vessel that needs repairs or maintenance, factor those expenses into your budget. It’s also worth noting that insurance is mandatory if you own a boat.
There are several things to consider when buying a yacht:
- How to finance the purchase – If you’re buying a new vessel, you’ll probably be able to finance it with a bank loan. If you’re buying an older boat, financing may be more difficult.
- Where to buy – You can purchase a boat from a broker or directly from a seller. A broker’s commission can be as much as 10% of the purchase price. If you purchase directly from a seller, the commission is usually less.
- Accessibility to your boat – You’ll need to consider the proximity of the boat to your home/work. Is it conveniently located? How easy will it be to get on and off the boat?
- Barrier to entry when buying a boat – First, decide what type of boat you want to buy. Then, ask yourself if it’s the right boat for you. Don’t fall in love with a boat that’s not right for you.
Decide on the Type of Boat You Want to Buy
Depending on your intended use, you may have to select a certain type of boat. For example, if you want to participate in regattas, you’ll need to buy a sailboat. If you want to go deep-sea fishing, you’ll need a larger vessel with a motor. If you want to live aboard, you’ll need to find a smaller craft with a galley. Be realistic about what you need and what you can afford. Experts recommend putting 20% down on a boat, but you may need to put down as much as 50% or more if you’re buying a used vessel.
Know the Different Types of Boats
If you are new to yachting, it’s important to know the different types of boats that are available on the market. Here is a list of the most common types of boats: – Cruisers: Cruisers are usually around 40 feet in length.
They are great for weekend getaways and extended cruises but not ideal for living aboard.
- Motor yachts are larger boats ranging from 40 to 70 feet. They can be used for both cruising and fishing.
- Sailboats: Sailboats are usually around 30 feet in length but can be as large as 50 feet. They are best for cruising but can also be used for racing.
- Pilot boats: These are large, mighty boats that can be used to pilot other vessels. They are not suitable for living aboard.
- Houseboats: Houseboats are suitable for living aboard. However, they don’t move.
- Bahamian boats: Bahamian boats are small, old craft that are not suitable for living aboard.
Determine How Much You Can Spend
If you’re financing the purchase of a boat, you’ll need to consider your other financial obligations—mortgage, car, credit card debt, and children’s education. You may also need to take into consideration health insurance, life insurance, and disability coverage.
Find Out What’s Needed for Repairs and Maintenance
If you’re buying an older boat, you’ll need to factor in the cost of repairs and maintenance. New boats require repairs and maintenance, too, so don’t ignore this aspect of ownership. Repairs and maintenance can be costly, so make sure you have the funds available to cover these expenses.
Get an Independent Marine Surveyor’s Report
If you’re buying a used boat, get an independent marine surveyor’s report before you make the purchase. A marine surveyor will thoroughly examine the boat from bow to stern, checking everything from the hull, deck, and rigging to the electrical and plumbing systems.
A marine surveyor will also examine the engine, so you’ll have a clear idea of what repairs and maintenance the engine will need in the near future. The surveyor’s report will help you determine the condition of the boat and the amount you’ll need to invest in repairs and maintenance.
If you’re ready to buy a new or used boat, you’ll need to consider the following: – Your financing options – You can finance the purchase of a new or used boat with a bank loan.
If you’re financing a used boat, lenders may be reluctant to grant you a loan unless you put 50% down.
- How to obtain marine insurance – You’ll need to buy marine insurance before you can legally operate the boat in U.S. waters.
- How to register and title your boat – You’ll need to register your boat with the U.S. Coast Guard if it’s less than 26 feet long. This involves getting a cruising permit and a Certificate of Documentation. You’ll need a permit to live aboard if your boat is longer than 26 feet. You’ll also need to title the boat, which means applying for a hull identification number (HIN).
- Where to store your boat – You can either keep your boat in a marina or on your property. If you store it on your property, you’ll need to have a boat slip with adequate water depth, a seawall or breakwater, and electrical and water service.
Buying a yacht is a serious undertaking that involves much more than the initial purchase. It’s essential to factor in the cost of repairs and maintenance, as well as the insurance you’ll need to protect your investment. And don’t forget to factor in the cost of maintenance, repairs, and operational expenses. Owning a boat is like having a second home, only much more expensive.