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piedaterre

Narrowboat depreciation due to diesel's future

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A long story short is, having owned a narrowboat previously for leisure, I'm looking to potentially release equity in my property to allow the outright purchase of a narrowboat to live aboard.  I've priced up releasing equity to buy a newer much smaller boat for weekend use but the cost differential between that and a larger boat means it become a very expensive weekend retreat, rather than something that won't cost expedentially more to actually live on.

 

I'm in my mid 30s, single, no kids, no debts or commitments and I'm extremely fortunate to have a net income of around £3.2K a month.  My property is worth maybe £140K and I've just over £60K worth of equity in it.  I'm looking to take around £40K out of the property to buy a boat outright, in addition to what I've saved, meaning I've got a reasonable budget.

 

The intention is to let my place out, and after expenses and associated letting costs, there'll be little financial difference between land life and being a liveaboard.  But my mortgage is covered.  Having had experience of boats in the pst I think I've budgeted realistically.

 

It's a real heart Vs head decision.  One of the major influencing factors is the worth, salability and even usability of a diesel boat in the not too distant future due to diesel.  Will a £40-50K boat have any net value if diesel's impossible to come by, or at a price point that makes it prohibitive.  From what I've read, it'll not be as simple as sticking a hybrid engine and/or battery bank in diesel engined boat, cost aside, potentially rendering it worthless in years to come.

 

Appreciate life's not all about numbers and nobody knows what the future is but doing this is a massive financial change - most would think I'm mad and talk me out of it.  Many would be envious of my situation and a part of me thinks I'm mad for potentially compromising it!

 

Words of advise for those more wordly and wise would be appreciated!

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4 minutes ago, piedaterre said:

One of the major influencing factors is the worth, salability and even usability of a diesel boat in the not too distant future due to diesel. 

I'm pretty sure that will never be an issue in my lifetime,  and I am in my forties.

 

If you want to boat buy a boat.  If you want cheap living pay off the mortgage and stay put.

 

I would also add that most of the non-retired on here would kill to be in your current position.  If I was you I would just do it! 

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Once the letting-related fees and rental income's taken into account I expect to be worse off by around £250-300 a month versus staying put.  But this doesn't account for the fact I'd have an asset worth £45K or so.  So the real net position won't be quite so much,

 

You're right, I'm sure a lot would kill to be in my position but I guess that's the sticking point.  I'm potentially giving up on something that others would kill for!  So maybe there's something wrong with it.

 

If it comes to it I guess I could sell a boat in a few years time for not too much less than I paid and pay a massive chunk off the house and it'd be like it never happened.

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Diesel is so important to the economy I seriously doubt you are going to see it your life time.  It's used way to many place that can't just be changed over easily or economically. Big ships. Trains, trucks, etc.

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Just now, Kudzucraft said:

Diesel is so important to the economy I seriously doubt you are going to see it your life time.  It's used way to many place that can't just be changed over easily or economically. Big ships. Trains, trucks, etc.

 

Thanks.  That was my initial thoughts too - then I started searching and seeing electric autonomous cargo ships and all sorts!

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9 minutes ago, piedaterre said:

You're right, I'm sure a lot would kill to be in my position but I guess that's the sticking point.  I'm potentially giving up on something that others would kill for!  So maybe there's something wrong with it.

 

If it comes to it I guess I could sell a boat in a few years time for not too much less than I paid and pay a massive chunk off the house and it'd be like it never happened.

I disagree.  Most of the non-retired who want to boat would kill to be in the position you are in because it would make it easier for them!

 

I do agree about the capital position though.  The boat will only cost you the difference between purchase and sale price, as long as you accept that licence fees, moorings and maintenance are simply a cost of living.  If the bug really bites, you won't ever want a landlubber's house ever again ...

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"Narrowboat depreciation due to diesel's future"

 

 

Honestly, if depreciation bothers you don't EVER buy a boat. Owning a NB cost £5k a year before you even consider the capital value drifting down. If you can't afford to shell out £5k-£10K a year to run it, plus say 10% a year depreciation, then forget it. You'll screw yourself in knots worrying about the never-ending drain on your finances. 

 

 

 

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Just now, Mike the Boilerman said:

"Narrowboat depreciation due to diesel's future"

 

 

Honestly, if depreciation bothers you don't EVER buy a boat. Owning a NB cost £5k a year before you even consider the capital value drifting down. If you can't afford to shell out £5k-£10K a year to run it, plus say 10% a year depreciation, then forget it. You'll screw yourself in knots worrying about the never-ending drain on your finances. 

 

 

 

I'll give you a fiver for Reginald ...

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1 minute ago, Mike the Boilerman said:

On reflection Reg is not for sale, at any price. 

 

Well almost any price....!

 

 

 

I'm a staunch capitalist.   Everything is for sale at a sufficiently inflated price!

 

£3.50 probably isn't going to cut it though ... 

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A new diesel engine properly maintained has a service life of 10000-20000 hrs. So for a continuous cruiser who actually cruises say a life of the next 10 -20  years. Diesel will go up in price in that time, but will certainly still be available. What ever replaces that diesel engine will still need a propeller and some sort of motor on the end of the prop shaft in the engine hole on your boat. My bet is the replacement will just be another diesel. Certainly in the lifetime of the existing diesel engines, it is extraordinarily unlikely that the canals will be equipped with a network of either electric charging stations or  horse stables. 

For those thinking that solar powered boats will take over we will have to relocate earth a lot closer to the sun because the limiting factor is the limited power received from the sun per square metre of panel normal to the suns rays. Panels will get more efficient but they cannot pass on more then they receive.

Don't let diesel apocalypse get in the way of enjoying boating.

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The canals and narrowboats existed long before the diesel engine. Diesel gets banned? So, how long before someone starts a specialist towing service? You know, a man and dobbin the horse. Canal boats are fortunate in that they don't need to punch against tides and waves; get one moving and you can easily drag a 57' boat yourself. Stopping it's fun! Forget the future of diesel as a deal breaker here. It isn't. Should that remote possibility ever come about then every diesel boat will have a similiar re-engining cost. A nice recent boat like the one the OP suggests would be a better one for someone to throw what £10k? at to change over to electric. You're in a lucky position and if you can maintain your work and income living afloat then imho it's a no brainer.

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I think you are too young to be eligible for equity release and you probably own insufficient equity.

In ay case equity release is a really bad deal. 

If you intend to take out a bigger mortgage and use it to buy a boat I think that may not necessarily be accepted by the lenders. 

 

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1 hour ago, DandV said:

 My bet is the replacement will just be another diesel. Certainly in the lifetime of the existing diesel engines, it is extraordinarily unlikely that the canals will be equipped with a network of either electric charging stations or  horse stables. 

For those thinking that solar powered boats will take over we will have to relocate earth a lot closer to the sun because the limiting factor is the limited power received from the sun per square metre of panel normal to the suns rays. Panels will get more efficient but they cannot pass on more then they receive.

Don't let diesel apocalypse get in the way of enjoying boating.

I agree with much  of this, my comment about dobbin was a flippant one, and certainly it would take a lot to install 10 thousand charging points but there are people on this forum with solar boats, steam boats, rowing boats, punts and sailing boats. If someone wants to cruise 12 hours a day year round then current solar tech isn't up to it., being frugal with power and either taking a winter mooring or minimum distance CCing when the sun isn't putting much at all in, is possible with current tech. As for the network of charging stations, I wouldn't expect CRT to provide the infrastructure or electric for free but marinas are in an ideal position to offer this facility as a charged service, half day mooring plus electric. 

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5 minutes ago, MartynG said:

I think you are too young to be eligible for equity release and you probably own insufficient equity.

In ay case equity release is a really bad deal. 

If you intend to take out a bigger mortgage and use it to buy a boat I think that may not necessarily be accepted by the lenders. 

 

Never heard of a remortgage?

 

You don't have to tell your mortgage lender why you want to take out more money against your property.

 

 

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it is worth bearing in mind that, apart from the obvious transport vehicles (that could be operated by electricity) there are hundreds of thousands of pieces of agricultural, construction and other types of plant and equipment that are powered by diesel engines; think - large generating sets such as emergency hospital sets, bulldozers, farm tractors, etc. 

90% of those use diesel power solely because they are remote from any source of mains electricity and the power requirements are way beyond anything that could be supplied by batteries; your narrowboat is no different. 

whatever DisMay may say (B)) they will not be replaced by an entirely different power source within our lifetimes.

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There is only life, if you want to do it make it happen. It’s the best philosophy you can have.

 

 

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4 minutes ago, Naughty Cal said:

Never heard of a remortgage?

 

You don't have to tell your mortgage lender why you want to take out more money against your property.

 

 

 

That's what I'm looking to do.  Basically it'll means taking a further loan out / charge against the property.  It's not equity release.  The aim is to continue to overpay like mad anyhow.

 

Even if I were to borrow another £40K I'd still have 15%+ equity left in the property itself which is all they'd probably be worried over.  I'm fortunate due to age, income and value of the property that it shouldn't be a problem.  Hopefully.

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8 hours ago, TheBiscuits said:

I disagree.  Most of the non-retired who want to boat would kill to be in the position you are in because it would make it easier for them!

 

I do agree about the capital position though.  The boat will only cost you the difference between purchase and sale price, as long as you accept that licence fees, moorings and maintenance are simply a cost of living.  If the bug really bites, you won't ever want a landlubber's house ever again ...

 

I suspect the OP is totally overlooking these costs, and they will dwarf the cost depreciation amortised over the lifetime of his ownership.

 

 

 

8 hours ago, piedaterre said:

One of the major influencing factors is the worth, salability and even usability of a diesel boat in the not too distant future due to diesel.

 

This bit warrants closer examination. When roughly, are you imagining "usability of a diesel boat" coming to an end? The date you expect this to happen has a very big impact on the viability of your plans.   

 

 

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7 hours ago, Mike the Boilerman said:

On reflection Reg is not for sale, at any price. 

 

Well almost any price....!

 

 

 

 

Is Reg a shiny boat? 😁

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Diesel engines will run on a variety of vegetable and mineral oils.

 

Indeed Rudolph Diesel's first engines ran on peanut oil, and many people today brew their own based on recycled cooking oils.

 

Hence diesel engines will be around for a while yet, but not necessarily running on DERV or gas oil as they do today.

Edited by cuthound
Missing apostrophe
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