Buying boats as Investment
Recently we have been faced with a very interesting question, in the midst of the global economical rollercoaster.
Can you buy Pleasure yachts as investments?
And the answer to this question is far less complex than people would think. It is not that simple as well. But the answer is YES!
As a matter of fact, brokers and agents around the world have been investing a lot of money in buying big boats (which I would say are around the size ranging from 40ft to 100ft) as investment. investment boating in hong kong
Like buying houses, you can get mortgage for buying boats. With far less friendlier terms. Meaning that you will have to make a full pay back in 5 years, and maximum 12 years, if you are lucky to find a bank that accepts it. The interest rates are usually not the best. Especially with private financing firms. But nevertheless it is possible to get finance on new or new-ish boats.
Banks and some big financial firms will not give loans for old boats, unless you have a great relationship with the particular financer. The reason is simply because Banks cannot understand the valuation of a boat. The valuation of boats and used boats generally has too much variation, from size of its engines, to where the boat is built and the style, size of the boat, condition in particular for used boats, and materials used in building that boat.
So I would say, if you are looking to invest in boats, then you better have some spare cash and a lot of love. Similar to marriage.
People do say, having a boat is like having another marriage, I disagree, because boats are far more faithful than humans.
Back to our topic on boats as investments. So yes, Recently in some cases it has become a good investment. Especially in Hong Kong (China) and Asia. Hong Kong is better in particular because maintenance of boats is a easy thing to do here. Compared to other parts of Asia.
There are 10 reasons why you can actually get more money for a boat, after its few years older than when you bought it.
- Exchange rate to buy that particular boat as "New" from its original country has increased.
- The original price of the "New" boat of the same model has increased (This happens surely, as prices of new boats only increase year by year due to high labor costs and inflation).
- You have a rare brand and model (This hardly happens, because there are good custom design boats available around the world).
- You have bought a boat for a good price, well under market value. (Every buyer's wish).
- You have bought a rundown boat and done good job in renovating and repairing it, and bringing it up to a quality standard.
- You have bought a new very well custom designed boat for a good price and of a good quality, from Taiwan or China, (or similarly priced countries).
- You have bought a boat from a new brand or upcoming manufacturer, who has good prospects of popularity in the future because of his yacht building quality and design.
- You bought a great boat from overseas, while the exchange rate was at its best.
- You traded-in your old boat for a good value to get a new boat.
- Rare but not impossible, You bought a boat for good price because it is considered as unlucky, due to accident or death in the boat or other unfortunate event that happened to its owner. (A sad thing to make money on, as I can understand this from owner's point of view)
One other main talent that will help you is, to understand the movement of the markets, and if you can speculate that a particular country will have its demand increased for boats. For example, A few years ago, Russia had a great demand, due to its economical and some political changes. South Korea had a slight increase in its demands around 6 years ago due to its economy and also an extra holiday per week was announced by the government.
Australian markets are always favorable, because they particularly like buying boats that can take the beating, rather than fancy looking boats. So good quality boats for a good price almost always has a market in Australia. Unless a economical gloom is facing the country like the recent global downturn.
However, no economical downturn is ever permanent and like the human spirit it always arises no matter how much beating it takes.
A good agent and importantly honest agent, is a valuable asset. A proper agent will not only tell you the prices and notify you of new listings and market values. But will also let you know how to negotiate for a particular deal. Should you be aggressive or should you wait and watch.
For now,
Enjoy Cruising
