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Whether you are buying your first houseboat or selling one you probably will want to know if your boat’s value is still the same as when you purchased it. Knowing whether a houseboat holds its value or not is an important fact to know before buying or selling.
Do Houseboats Hold Their Value?
Unfortunately the answer under normal circumstances is no, a houseboat won’t hold its value. There are a couple of things you can do to help decrease or even eliminate the loss of value of your boat. We will discuss those in further detail below.
Just like when purchasing a new car, purchasing a new houseboat will cause you to lose a lot of value immediately. There are some nice things about buying a new houseboat but you will certainly pay for those things in the value that your new boat will lose.
One of the things you can do to help decrease the loss in value for your houseboat is to buy a used one. People will often buy a houseboat thinking that they will use it regularly and after a year or two they will grow tired of paying for the upkeep, storage costs, insurance, etc. and they will sell that houseboat at a significant discount to the price of a new boat.
To be able to buy a used houseboat you have to know whether you are buying a lemon or not or pay someone who does know but the significant savings will not only help your original cost but your used houseboat will depreciate much slower than a new one.
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How Fast Do Houseboats Depreciate?
Depreciation (or the value that the item loses over time) is the highest the first few years after the item, in this case a houseboat, is originally purchased. Your houseboat will still lose value even if you buy it used but it will depreciate at a much slower rate than when buying a new one.
A new houseboat will often lose 20% of its original value in the first year, 15% in its second, and 10% in its third. After that most houseboats will only lose 5% or less of their value every year.
The second way to reduce or eliminate the value lost in a houseboat purchase is to buy a dilapidated houseboat and repair it! If you have watched much TV you have probably seen the shows about people who fix up houses and “make a profit”. Whether the shows are legit is up to debate but the same buying cheap and fixing up model can be applied to your houseboat.
If you are looking for a houseboat in the $50,000 range you should be able to find a dilapidated houseboat around the same size for $5,000 to $10,000. If you hire out all of the work you should be able to get the upgrades done for 20-30k.
That will give you a fully updated modern houseboat for 10-20k less than the current market value of houseboat. At a depreciation rate of 5% that will give you 5-10 years where your houseboat is worth more than you paid to buy and repair it!
If you have some knowledge about construction basics you can often redo much of your houseboat for far cheaper as the labor is always the most expensive part of repair work. Hiring out plumbing, electrical, and engine repair is a good idea if you aren’t an expert but walls, floors, paint, etc are all things that require a lot of time and elbow grease but not much knowledge.
If you are wanting your houseboat to lose as little value or even go multiple years without losing any value then buying a used houseboat and even a dilapidated houseboat and repairing it is certainly the way to go.