Boat Financing Question & I've caught the Bug!

[Paragon]

Hello Everyone,

 

This is my first post so I would like to introduce myself as well as ask for expertise with regards to boat financing.

 

I am forty, married and a homeowner with a relatively low mortgage vs equity value.

 

My Wife, our three year old Niece, the Dog and I hired a Trad Narrow Boat in November 2010 for a period of a week and navigated a part of the Kennet & Avon cannal system. It was the first time for us all and I had to learn fast due to wifey having her hands full keeping our niece and rather active and excited dog from testing out their new life jackets ;-) But the tea was very much appreciated! :-)

 

So I spent the holiday single handily jumping off and on and off and on, working the locks climbing ladders and having one hand pretty much attached to the center rope.

Having said that I soon got into a routine and thoroughly enjoyed it. Even when the rain lashed down harder than I have ever witnessed with a driving wind that nearly blew me of the stern and all this happening just as we were arriving at the Wallhamptom swing bridge where the canal was a torrent. Still the pub grub and beer was worth it!

 

Since the holiday all I've wanted to do is to get back out on the cut so with this feeling I have thought long and hard about purchasing a boat.

One thing to mention the wife and I do not fly so holidays abroad are no no except for France if that counts ;-)

So the boat will be our home from home the weekend getaway from the smoke and the extended holiday residence for exploring the canal system.

 

Soooo finally onto the question at hand.

 

I was considering taking out addition fund against the mortgage over say a ten year period preferably as a repayment mortgage or as interest only scheme with a view of selling the boat within ten years or less or upgrading the boat etc.

The idea being that I would hope to recoup some of the value of the boat less depreciation on sale and within that time have had the use of our own holiday home as when we wish too.

 

Ofcourse I would need to take into account mooring fees, maintenance running costs etc.

 

Does this seem like a feasible way to go about it?

Do you have any thoughts ideas or gotcha's?

 

Kind Regards,

SRG

Edited January 21, 2011 by Paragon

[canaldrifter]

Welcome to the forum, SRG.

 

I can only give you a very personal opinion. If you are going to borrow money in these frugal times, for what is essentially a leisure pursuit, you need to be very sure that you will not be digging a big financial hole for yourself should it all go wrong, especially if your home is at risk.

 

Boats are money pits.

 

Would it not make more sense to keep hiring, or even consider shared ownership?

 

Tone

[Guest]

Hello Everyone,

 

This is my first post ....<SNIP>

 

 

A great post it is if I might say so.

 

Welcome to the forum firstly.

 

You will get different views about this but mine is to a degree based on what our surveyor told us.

 

To a degree what you want to do sounds feasible to depending on how much depreciation you want to stand. Our boat was four years old when we bought it and our surveyor advised it still would have some way to depreciate. I was told (again other views are available) that I should expect it to stabilise at around 3/4 of what we paid for it in around 2-3 years as long as we look after it and maintain it well - which we are doing.

 

Hope that helps....

Edited January 21, 2011 by MJG

[ymu]

Sounds fairly straightforward. Just don't stretch yourself too much on the mortgage with interest rates likely to zoom up at some point.

 

How much the boat will depreciate in that time depends on how new it was to start with and how well it is looked after in the meantime. If you buy a new/newer boat it will lose a lot more value than one that is already 20-30 years old. If it's 30 years old, there won't be much depreciation except for wear and tear - but you need to make sure the hull is sound, or replating could be expensive.

 

Cost it up carefully as it isn't cheap. Licence, insurance, moorings, maintenance are all pretty fixed costs regardless of how much you use the boat. That lot'll come to around £4k per year, before you've paid for any fuel. Add in the depreciation and the extra cost of your mortgage - both of which depend on your personal circumstances and what boat you end up buying - and then work out if it's cheaper/better than hiring for the amount of use you will get out of it.

[Chertsey]

Considering lots of people borrow money to buy boats, and taking out a mortgage is the cheapest way of doing it, it's not a bad idea at all. I would definitely go for repayment though; the boat is unlikely to maintain its purchase price over ten years, and who's to say that you won't want to keep on boating - it would be awful to be in a position where you had to sell the boat to pay off the capital. Obviously in these straitened times you need to be careful not to overstretch yourself in case house prices fall and interest rates rise, but you know that. At least you're not leaping in at the height of the boom, as many did, when there were far fewer warning voices.

 

I mortgaged my house to buy my boat, and OK I've got less money in the bank every month, but would I rather be counting my gold or boating? I know the answer to that.

 

Good luck with it.

[HelenF]

Re-mortgaging generally is one of the cheaper forms of finance, as the interest rates are lower than unsecured loans.

 

Bear in mind that you don't get anything for free, not least free holidays!

 

You could add up the costs associated with owning and running a boat - see above posts. Then compare that to what you are prepared or would normally spend on annual holidays. If you are able to take several holidays a year then the boat may work out to be very cost effective.

 

However, looking to the future, you have the choice of not incurring costs on holidays should you wish to save money, yet with boat ownership you may not be able to reduce your costs so readily.

 

Anyway, given that you don't get anything for free, I believe that narrowboat holidays offer ever changing scenery, are very sociable and keep you fit!

[robdalej]

Looking at your post and the other replies, the one thing I would pointout is that if you took out an interest only addition to your mortgage then in 10 years you would still have to repay the capital. If you buoght a boat at say 60k, then after10 years it may only be worth 40k and you would have to find the difference from your house equity.In my opinion it may be better to at least be reducing the capital by a second mortgage. One other point is to try and find a boat with a recognised name, not one of the , initially, cheaper boats, as the well known builders boats hold their value a lot better, if you are looking for a long term prospect. good luck

[LEO]

Hello Everyone,

 

This is my first post so I would like to introduce myself as well as ask for expertise with regards to boat financing.

 

I am forty, married and a homeowner with a relatively low mortgage vs equity value.

 

My Wife, our three year old Niece, the Dog and I hired a Trad Narrow Boat in November 2010 for a period of a week and navigated a part of the Kennet & Avon cannal system. It was the first time for us all and I had to learn fast due to wifey having her hands full keeping our niece and rather active and excited dog from testing out their new life jackets ;-) But the tea was very much appreciated! :-)

 

So I spent the holiday single handily jumping off and on and off and on, working the locks climbing ladders and having one hand pretty much attached to the center rope.

Having said that I soon got into a routine and thoroughly enjoyed it. Even when the rain lashed down harder than I have ever witnessed with a driving wind that nearly blew me of the stern and all this happening just as we were arriving at the Wallhamptom swing bridge where the canal was a torrent. Still the pub grub and beer was worth it!

 

Since the holiday all I've wanted to do is to get back out on the cut so with this feeling I have thought long and hard about purchasing a boat.

One thing to mention the wife and I do not fly so holidays abroad are no no except for France if that counts ;-)

So the boat will be our home from home the weekend getaway from the smoke and the extended holiday residence for exploring the canal system.

 

Soooo finally onto the question at hand.

 

I was considering taking out addition fund against the mortgage over say a ten year period preferably as a repayment mortgage or as interest only scheme with a view of selling the boat within ten years or less or upgrading the boat etc.

The idea being that I would hope to recoup some of the value of the boat less depreciation on sale and within that time have had the use of our own holiday home as when we wish too.

 

Ofcourse I would need to take into account mooring fees, maintenance running costs etc.

 

Does this seem like a feasible way to go about it?

Do you have any thoughts ideas or gotcha's?

 

Kind Regards,

SRG

Hi,

 

Not sure which part of the canal system you will be keeping your boat, but it is a great way to spend time.

 

However canals have changed a lot over recent years with lots more boats, especially live aboards so mooring can be difficult to find and you may have to consider a marina mooring - it's worth costing out the availability and cost of these and chatting to other boaters about running costs.

 

It would also be interesting to hear of your DIY skills as a reasonable mechanical/DIY skill can cut costs - but be aware that many marinas are becoming increasingly overbearing about what you can and cannot do by way of DIY maintenance within the marina curtilage.

 

Great fun and some boats can sell for more than you buy them for - if you look after them carefully.

 

Hope that helps.

 

Leo

Edited January 21, 2011 by LEO

[Strads]

HI there and a good first post, asking the smart questions

 

As Robdalej stated, spend time researching very carefully the market re, worth/value of different manufacture's and type of boat (cruiser/semi trad/trad) to determine excatly which style you Like !

 

do not rush in, but take your time viewing at least 20 boats of different styles in different locations - check the various brokers and take time to view, plan , cost.

 

Also discuss with your wife on what essential fittings (in your joint view) you must have, what would be nice and then what would you dream of having. If you research on here youll note much discusion on merits of layout/style/loo's/cookers. Choose what you feel will suit you.

 

If a boat dosnt have that combination, keep looking, or ask how much it would be to change to what you have, but generally taking a well fitted boat apart is not a good thing - you loose the current fitout look, have the cost of change and risk that the change isnt quite right afterwards.

 

We too bought our boat on the house mortgage and also have it as a repayment mortgage.. so hopefull if we shoudl need to ever sell what we get willbe more than whats left on the mortgage.. so far so good..

 

enjoy the research

[Paragon]

Wow,

 

Thanks for the prompt and very informative replies they are all very much appreciated.

 

I was thinking of a second hand boat aprox 40-45ft with a price of between 25-35k.

Quite happy to do some DIY work and I am quite mechanically minded.

I am fortunate enough to own a number of metal turning Lathes and milling machines both manual and CNC controlled that I use as a hobby for model engineering and tool making. Making tools to make more tools ;-) Although not too sure what I could use them for except in the case of engine re bore or prop shaft turning ... hope not though!

 

The first thing I think I will do is concentrate on finding a mooring easier said than done from what I understand!

Scrub the above! The first thing I am going to do is read some of the posts on this great forum then do the above, prior to finding a boat.

 

Thanks Again Everyone!

SRG

[Guest]

 

I was thinking of a second hand boat aprox 40-45ft with a price of between 25-35k.

 

 

I would say in that range if you look after it, it will depreciate very little if at all.

 

If you improve it you might even get more for it than you pay for it if you have to come to sell it after a while.

 

and sorting a mooring before you get a boat is a good idea especially in a popular stretch/area.

[Chertsey]

I would say in that range if you look after it, it will depreciate very little if at all.

 

If you improve it you might even get more for it than you pay for it if you have to come to sell it after a while.

 

and sorting a mooring before you get a boat is a good idea especially in a popular stretch/area.

And a boat in that price range probably would pay fir itself in terms of hire fees saved over ten years. Plus you have a boat to fiddle with even when you're not boating - twice the fun!

[sueb]

Have a look at share boats. You may find these give a cheaper option. You may find going from the same place each trip is boring.

Sue

[alan_fincher]

Welcome too....

 

You seem to be fairly switched on, and certainly asking the right kind of questions....

 

I suspect, from what you have said already, you have more than the right potential skill-set for a fair amount of DIY maintenance as well as improvement, which helps enormously, (as soon as you pay anyone to do things for you, costs start to mushroom, and results can sometimes be frustrating!).

 

Much of narrow boating, (BW licence, mooring, topside painting, blacking, etc), is effectively priced based on length, so if you are happy with a 40 to 45 foot boat, you'll automatically be paying significantly less than those around the popular 60 foot length. Without any strong logic, or great master plan we ended up with 50 foot. As non live-aboards we could manage with less, and I'm eternally grateful that we didn't end up with more.

[Doug_]

Hi,

 

Not sure which part of the canal system you will be keeping your boat, but it is a great way to spend time.

 

However canals have changed a lot over recent years with lots more boats, especially live aboards so mooring can be difficult to find and you may have to consider a marina mooring - it's worth costing out the availability and cost of these and chatting to other boaters about running costs.

 

 

Have you considered joing a club? No-one on here seems to mention this option when talking about moorings. There are a lot of good clubs on the network that offer far better facilities for DIY than most marinas. Moorings are usually quite a bit cheaper per foot, plus you get the benefit of help and knowledge from other members. Other than buying a boat it is certainly the best thing we have done so far. Good luck on whatever choice you make.

 

Doug

[Dominic M]

As a broker, I have noticed a marked increase over the last year of people seeking shorter narrow boats in the 40 - 45ft range.

 

I don't think interest only mortgages are available in the current climate.

[Paragon]

Thank You for the latest replies they are very much welcome!

 

The boat we hired for the week in November was a 57ft Trad.

I found it was a nice size especially when family came to visit for the day (well for the corned beef hash)! ;-)

I'm leaning towards a cruiser or even a semi-trad style mainly due to the social aspect that these styles offer and mildly due to the trad we hired had quite a strong smell of diesel fumes that propagated through the boat when opening the cabin door, is this normal for trad boats?

 

Oh and will defiantly, defiantly purchase some walkie talkies for those 'could you stick on the kettle darling' moments ;-)

 

I must have the bug as purchased the following books from amazon yesterday... ;-)

Narrow Margins Marie Browne

and

Narrow Dog To Carcassonne

Terry Darlington

 

Dominic M You may be correct about the interest only mortgage. I went to the natwest online mortgage calculator initially looking for a repayment mortgage but they did have the option for interest only so I checked it for curiosity. Maybe the option is still there just to remind us of the good olde days not so long ago!

 

Joining a club sounds like a great idea I guess this gives one the option to share mooring too if there is a requirement.

 

Thanks Again for all the replies they sure have come in thick and fast! What great forum / community!,

SRG

[Guest]

Thank You for the latest replies they are very much welcome!

 

The boat we hired for the week in November was a 57ft Trad.

I found it was a nice size especially when family came to visit for the day (well for the corned beef hash)! ;-)

I'm leaning towards a cruiser or even a semi-trad style mainly due to the social aspect that these styles offer and mildly due to the trad we hired had quite a strong smell of diesel fumes that propagated through the boat when opening the cabin door, is this normal for trad boats?

 

Oh and will defiantly, defiantly purchase some walkie talkies for those 'could you stick on the kettle darling' moments ;-)

 

I must have the bug as purchased the following books from amazon yesterday... ;-)

Narrow Margins Marie Browne

and

Narrow Dog To Carcassonne

Terry Darlington

 

Dominic M You may be correct about the interest only mortgage. I went to the natwest online mortgage calculator initially looking for a repayment mortgage but they did have the option for interest only so I checked it for curiosity. Maybe the option is still there just to remind us of the good olde days not so long ago!

 

Joining a club sounds like a great idea I guess this gives one the option to share mooring too if there is a requirement.

 

Thanks Again for all the replies they sure have come in thick and fast! What great forum / community!,

SRG

 

Delving now into very dangerous territory ie choice of stern and narrowboat related reading.

 

I'll quickly chuck in my 2 cents and retreat...

 

Semi-trad and Narrow margins.

 

Right I'm off.

[bottle]

a strong smell of diesel fumes that propagated through the boat when opening the cabin door, is this normal for trad boats?

 

It is not normal, there may have been a leak or someone spilt some diesel.

 

I have a trad (liveaboard) and there is no smell whatsoever of diesel.

[Doug_]

It is not normal, there may have been a leak or someone spilt some diesel.

 

I have a trad (liveaboard) and there is no smell whatsoever of diesel.

 

I have also noticed a diesel smell in trad hire boats. However, we deliberately chose a trad when we bought our own boat last year and providing you keep the engine 'ole clean and the engine regularly serviced there is no smell.

[Dominic M]

It is not normal, there may have been a leak or someone spilt some diesel.

 

I have a trad (liveaboard) and there is no smell whatsoever of diesel.

I have a trad with a beautiful old vintage Gardner in it (or a space consuming old crane engine if you're mrsmelly ) and it doesn't smell of diesel at all. I rectified this by buying one of those plug in scent things that emits a half burnt diesel aroma.

[robdalej]

Would agree with your way of thinking re older boats and , providing you get , at least a hull survey on it you should be able to get a good boat for around that price somewhere around 1989. Always bear in mind that the asking price is not neccesarily the price you will have to pay. We have a 50 ft boat 1989 that we paid around that price and it is in excellent condition. BE careful of items like paintwork on older boats as a boat with faded/rusting paintworkm canadd another5to7k on to your price. Ours is atrad and we have no fuel smells from it, only prolem with a trad. is that usually only 2 peoplecan stand on the back, depends on how many people you intend to cruise with

[Chertsey]

If we've got on to choosing what sort of boat... I can only say, try to have a go on each main type before you choose; they all have pros and cons (except for semi trads which are the work of the devil) and only experience will tell you which suits you best.

[Ally]

Hi, welcome to the forum, that was a great opening post! You seem to have really enjoyed the holiday you had, and seem to have good attitudes to the lesser sides as well as the 'pretty and good weather' sides!

You've received plenty of answers to your questions....the one thing I would add is this.....

Be prepared to fall deeper in love with boating and not want to spend a single weekend at home when you could be on your boat!

I have a friend in 'the smoke' who hankered for a boat for years, bought one in December and can hardly find the time to stay away now! She will end up moving and living on it in time we reckon!

 

Hope you find the forum useful, a wealth of info and knowledge on here....just ignore the odd bit of petty back biting and cabin fever remarks that occassionally come up!

 

Good luck with your plans, choose carefully and wisely, look at as many boats as you can, and enjoy!

[Water Rat.]

Buying a smaller boat saves quite a bit of money as moorings and licence tend to go on length. Really think about how many people are going to use it at any one time. I think quite a few boats are travelling aroud with space that is not really needed. My boat is 34ft and perfect for two with the seating making up a second berth if needed, so it could sleep 4 if needed. If I were honest, for my week ending and holidaying this is enough and with the advantage of being able to turn almost anywhere my trips are not restricted by finding a winding hole.There is a couple living aboard a 35footer moored next to me and they are very happy. My boat is 22 years old and cost about the same as a decent family car but has gained value with a nice paint job. I would have thought this was a great time to buy a boat as prices are quite low at the moment. Good luck and let us know how you get on. Oh, and welcome.