Is Buying a Boat a Bad Investment?

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Hey Taylor: I’m thinking of buying a boat. I’ve got enough to pay cash for a decent ship, but I’m wondering how good or bad of an investment it might be. — Brad

Hey Brad: In this case, it all depends on how you want to define "investment." Compared to a piece of real estate or some other commodity, a boat is a pretty bad investment. However, if we’re thinking about your lifestyle and spending money wisely, a boat might be a great purchase. A few things to think about:

1. How much boating will you do? You don’t buy a boat thinking about resale value (unless it’s a fix-and-flip project). If you want to know whether it’s worth the money, be honest with yourself about how often you’ll actually use it. Do you live hours away from the nearest body of water? If so, have you thought about how much time you’ll spend hitching, unhitching, and driving to and from the lake? Do you want a fancy sailboat that you can take into the open sea, and do you know how to operate such a vessel? Did you love fishing as a kid, and you’re hopeful your own boat will rekindle that love affair? The last thing you want to do is make this purchase on a whim, so be as analytical as possible when weighing the pros and cons.

2. “The only thing that works on a boat is its owner.” Phrases like this are popular among the boating community because there’s a lot of truth to it. While depreciating in value, the boat you buy will also require constant upkeep. The resale value will be better than an automobile if you keep the ship in good condition, but doing so will take a lot of time and money. This purchase will definitely be labor; make sure it’s a labor of love.

3. Vacation for purchase. In my mind, one of the best reasons to buy a boat is to cut back on future travel costs. Instead of flying to some exotic destination, you load the family on the boat for a couple of days and enjoy the thrill of camping at sea. If it fits your lifestyle, all the time and money spent fixing and repairing your boat might still be cheaper than what you’d spend on other summer getaways.

Let’s take the word “investment” out of this conversation. Think about a boat’s personal worth instead of its financial meaning. Will the experience merit the cost? If so, enjoy that boat!