Taking the plunge
I have been in a position to buy a house in Seattle since 2005, but I have resisted for many of the reasons that the readers of this site understand. Everyone here also understands the years of being lectured by friends and being seen as the poor rube that "just doesn't get it." Well here I am with no debt, enough for 20% down on any house in my price range, a good job, and absolutely NO desire to get into this housing market for a while. The government really wants me to get out there and buy a house, and they are willing to give me $8K to do it (for which I just qualify under the AGI limits). I still say no.
Well, kinda. I am going to buy something... just not a house. Turns out that I can get the full first-time home buyer's credit when buying a boat on which to live. Instead of the $8K being a spit in the bucket for a Seattle house, it will serve as ~7% for a 44' yacht. Considering moorage, maintenance, and depreciation, it still loses out financially to renting for 3 more years... but it is close. And the only way that buying a $500K house competes over the next 3 years is if it goes up in value 2-3% per year AND I rent out a room for $700/month. I am willing to bet my 20% down payment money that housing will be flat for the next 3 years at best.
I am already getting some of the looks from my friends that have bought houses in the last few years. They can't believe that I would compound my stupidity by buying a depreciating asset instead of investing in a house. Oh well... it isn't my job to explain to people how much interest on a $400-500K house is really costing them. Not to mention losing principle.
Buying a boat to liveaboard is far from just a financial decision. It is something that I have always wanted to do, and I am in a place in my life to do it. It is also the best way that I have found to get a 2BR/2BA place on the water... living a life that people pay $800K+ to watch from a hill. At some point I will commute to work during the week by walking, paddling, biking, boating, and swimming. That, and I won't owe a dime to a bank.
Well, kinda. I am going to buy something... just not a house. Turns out that I can get the full first-time home buyer's credit when buying a boat on which to live. Instead of the $8K being a spit in the bucket for a Seattle house, it will serve as ~7% for a 44' yacht. Considering moorage, maintenance, and depreciation, it still loses out financially to renting for 3 more years... but it is close. And the only way that buying a $500K house competes over the next 3 years is if it goes up in value 2-3% per year AND I rent out a room for $700/month. I am willing to bet my 20% down payment money that housing will be flat for the next 3 years at best.
I am already getting some of the looks from my friends that have bought houses in the last few years. They can't believe that I would compound my stupidity by buying a depreciating asset instead of investing in a house. Oh well... it isn't my job to explain to people how much interest on a $400-500K house is really costing them. Not to mention losing principle.
Buying a boat to liveaboard is far from just a financial decision. It is something that I have always wanted to do, and I am in a place in my life to do it. It is also the best way that I have found to get a 2BR/2BA place on the water... living a life that people pay $800K+ to watch from a hill. At some point I will commute to work during the week by walking, paddling, biking, boating, and swimming. That, and I won't owe a dime to a bank.
Comments
Congratulations on being able to do what you've wanted to do for a long time.
Some people want to own houses. Some people want to rent an apartment. Some people want to live on the water, on a 44 ft yacht. Whatever floats your boat:)
Does moorage include a water supply and sewage disposal?
Some thoughts:
So, crunch all those numbers together and you will find... it is a bad financial move. My out of pocket expense will be ~$1000/month, but the real cost will be ~$1700/month. I plan on reflecting on the merits of the decision when eating dungeness crab off Blake Island and while cruising in the San Juans for a week (and not while changing out the mascerator pump). Hope that helps... let me know if you want any other info.
I assume you're talking about the on board treatment of human solid waste?
If I could ever convince my wife to go for it, I think that's something I could really go for. The only thing I'd really miss would be my garden. I imagine it would be difficult to grow fresh raspberries on a boat.
I was talking with a broker who owns a boat and he mentioned that his wife really loves plants. He told her that she could have as many plants as she wanted aboard... so long as they didn't have dirt.
Community pea patches are also great.
Sure... http://tinyurl.com/lto968. It is a 44' Atlantic built in 1977.
One importnat addendum to my numbers above. I forgot to list sales tax which is 8.5-9.5% depending on where you buy/keep your boat in Washington. That is tax deductible, but it is still quite a significant cost. It was a rookie mistake to leave that out... but it doesn't change my plan.
:?: :?: :?: :?:
How much does it cost you in fuel to run up to the San Juans for a week?
How much does it cost to run out and back to someplace closer, like Possession point?
I've been thinking about getting my boating license so I can rent boats on the occassional weekend. I doubt I would ever use a boat enought to justify buying one. Although the idea of using it as my living quarters seems very appealing in a idealistic romantic way.
Usually a couple hundred dollars depending on where, and how you buy your diesel. All depending on currents, weather, and speed.
The boat is registered up in Canadia, but there aren't any real restrictions to buying it down here. You have to pay a title company anyway, and they know how to check for registration and liens up there as well. The only problem is if there is a lien on the boat... but that could happen down here as well. Shouldn't be a problem.
Entertaining is one of the big perks for me, actually. Having 2-6 people over is just about perfect, and you just have to watch the kids. I can't imagine that it is any harder than watching out for kids if you, say, lived in a meat packing plant.
Crucifiction,
Yeah, I chuckled with the counter tops. I have been reading SB for so long that I instantly hate a house when I see granite. It just screams that someone is trying to f@$& you on the price. There might be a little of that here, but Corian is actually a good product in the marine world. I work in a new construction commercial boat yard... Corian is the first to go on a wish-list and the first to come off a paying-list for a prospective client. In general you are right though... this owner is looking to get paid for every maintenance item and upgrade he ever did. We shall see.
Lamont,
The boats I am looking at are slow cruisers... more of a sailboat mentality. They don't get up and plane like fast boats, but they are economical. Economical-ish anyway. It will cruise at 8 knots (close to 9 mph) at 4 gal/hr. San Juans will take about $200 each way (today). For a week vacation, that ain't bad. Deception Pass really isn't that much closer from Seattle. From my (hopeful) dock in Lake Union, it is about $40 round trip to Seward Park. This all reminds me to get my sign ready that says, "My boat doesn't run on thanks." You bring food and drinks, I'll take you cruising.
Alan,
I'm not sure about "wise," but perhaps not as bad of an idea as normal. I have my captain's license and toy with the idea of using it for business someday. Maybe. There are some tax advantages to it, but you are more likely to get audited as well. I definitely feel like the best way for me to make use of a boat is to live on it and enjoy it.
When my brother still had his boat (which he let me use), that was always our deal - we'd pay for gas, everyone else is bringing food and drinks. When gas was $1.50/gal on the river, that was a good deal... not so much when gas was over $3/gal the following summer.
4 gal/hour sounds pretty good, given the size. I guess there's something to be said for a slower pace.
I don't have any hard feelings. I think I put a fair offer in that was consistent with the market, and the Owner just wasn't willing to sell for that. Fine. There are people that are selling their boat, and then there are people who hope to sell their boat. It's kinda like a homeowner that puts a ton of money and sweat into a house that becomes clear and away the best one on the block... but you just can't change the neighborhood. The owner is going to get a lot more enjoyment out of his handiwork than he is able to get people to pay for.
I have to say that I am a lot more prepared to negotiate and be confident in my market analysis and offer after following SB the last few years. Buying a boat is different from a house, but a lot of the principles are the same. Know the market, know the true costs of ownership, and make the best personal decision.
Thanks for sharing. Good stuff. There is quite an inventory of boats for sale. I made on offer (or two) on a couple PWC's recently and one person was not happy with my offer and told me so. Even said "you will not find a better deal." Wrong thing to say. I just don't understand why people continue to have to tell you in listings via Boat Brokers or Craigslist what they put into it. That's like saying I put $100K into my property that I bought in November of 2007 after getting it via multiple offers. Oh well, people are funny.