OWNING A BOAT CAN BE A BITTERSWEET PLEASURE

Powerboating is enjoyable, no doubt about it. Zipping across the water in a sleek sport cruiser with a group of friends can provide such a high degree of pleasure that you can actually justify the expense involved. This is living! So what is it about boats that can also make owning one such a royal pain?

Boats are unbelievably demanding. And not just of money; a boat also demands huge commitments of time, which is equally important. So even if you have deep pockets, you may learn that a boat you don't have time for can become a serious problem because boats don't wear out; rather, they too often rust (or corrode) away from lack of use. The damp salt air that abounds in so many of our favored boating areas can quickly ruin a boat's mechanical systems if they remain idle for too long.

Use It or Lose It

If you don't give your boat regular "work-outs," you may discover that the boat you intended to use and care for but didn't will rebel by working improperly (or maybe not at all!) when you finally do manage to get some time aboard.

But do you really need to own a boat to enjoy the sport to its fullest? In a word, no. There are many other ways to go power-boating, and I'll outline alternatives later in this chapter. But there are also some other aspects of boat ownership that may be important to you, so before we dismiss the idea completely, we'd better consider them. You can always hire someone to care for your boat and keep everything in a ready-to-go state if you don't have the time to do it yourself.

So here are some very good reasons for buying a boat even if you can't really use it that much.

Five Valid Reasons for Owning a Boat (Even When It Really Isn't Practical)

1. Perceived status. People who own boats—"yachtsmen," if you will—seem to be a distinguished lot, so it's reasonable that you might wish to join them. (Understand that in calling them yachtsmen, I'm not being sexist. It's a customary term, just as boats are traditionally referred to as "she," though I'm going to be politically correct and use "it" throughout this book. And while we're on the subject, also know that wherever I use "him" or "himself," it is strictly for simplicity and to save space; the words always also mean "her" or "herself" as well. For the same reason, I'll use "s/he" to mean "she or he." But we also have to face the truth: the majority of boatowners are men—we'll just overlook the reality that more than a few of them had to get a wife's permission to make the purchase.)

Yachtsmen are generally friendly enough, but they do often make a distinction between fellow boatowners and the rest of the world. If being a part of this seemingly exclusive group is important to you, then yes, you need to buy a boat of your own.

2. Pride of ownership. This is different from the previous reason in that it is less about what other people may think and more about what is important to you. If you live in a house or condo you purchased rather than in a rented dwelling, not for its probable appreciation and your growing equity but because you need a place you can call your own, then owning your boat is probably your best bet, too.

3. Lack of desire to share. This is not about greed. It is simply accepting that sharing a prized possession involves being able to live with knowing that at least a few of those with whom you share won't give it the care and respect you know it deserves. If you can't do that—if the thought of having others use (or, in your mind, possibly abuse) your precious "baby" bothers you—don't choose any of the nonownership options discussed later in this chapter.

4. Tax advantages. If your boat has a galley [kitchen], a head [toilet], and at least one berth [bed], it can qualify as a second home under current IRS rules and whatever interest you pay on your boat loan becomes tax deductible. I'll outline current regulations in Chapter 5. But because the regulations are always subject to change, you should check with your tax adviser for specifics as to how they may apply to your situation.

5. You just want it! I'm sure there are those who would question the validity of this reason. "You can't have every-thing you want!" is one of our earliest lessons in life. But to quote my father's sage advice again, he once told me, "You know, son, it actually is possible to have everything you want; well, almost, anyway. You just have to be willing to pay the price, which is often simply giving up something else you also want—just not as much. That last aspect is so important because you have to remember that the real cost of things can't always be measured in dollars." So I suggest that if you want to own a boat and are both able and also willing to meet all of its attendant costs, go ahead and buy one, even if doing so might seem irrational.

Buying Is Just the Beginning

Those "attendant costs" are by no means trivial, so when making the decision to buy a boat, remember that the purchase is only the beginning. You'll also need the funds to enjoy the boat after it's yours. To help you determine what sort of boat fits your budget, I'm including a blank table you can use to work out the figures for yourself. If you are looking at several boats, you should do a table for each to compare the costs. The shaded boxes don't apply and can be left blank. Initial (or down) payments, for example, don't apply to all categories, and only the total cost of a boat needs to be allocated more extensively. The shaded boxes under the "monthly" column are for items that usually don't involve monthly payments; yet they are shaded lightly so that, if you want to analyze your budget on a cost-per-month basis, you can use them to enter one-twelfth of the annual total.

Fixed costs vary depending on the boat. Insurance premiums usually increase with horsepower and also with length. Dock-age, off-season stowage, bottom cleaning and painting, and haulouts and other yard expenses (as well as, in some states, registration fees) also increase with length. The best and worst part of fixed expenses is that they are fixed; they remain the same regardless of how much you use the boat. Use it a little, and the cost per hour can be ridiculous. But go boating often enough, and these fixed costs become miniscule on a per- hour basis.

Variable expenses, however, depend entirely on how much you use the boat (though more horsepower usually means greater fuel consumption, so even a few hours on a more powerful boat will cost more). Spend more time aboard, and the variables can't help but increase. The good news here is that the more you use your boat, the more fun you have. So the higher costs are usually worth it.

Also remember that whatever the total cost, you will get some of it back when you sell—although, because production boats depreciate rapidly, not as much as you might hope. So many variables are involved in determining depreciation that it's hard to calculate in advance. Just know it will be a part of the total cost, and the newer the boat you buy, the more it will depreciate. You'll get a proportionately greater return when selling a 10-year-old boat you've had for 5 years than you will when selling a 5-year-old boat you bought new.

VIABLE ALTERNATIVES TO OWNERSHIP

If your objective is to have as much boating fun as you can for the lowest possible cost, I'd say don't buy a boat, because you can more easily achieve this goal with any of the following options.

Renting

Renting can be the least expensive way to go powerboating because you pay only as you go. When you rent a boat, you pay for the following: (1) the use of the boat, with a rental fee that's usually by the hour; (2) the fuel you consume (the rental starts with a full tank—you top it off on return and pay for the fuel you've replaced); and possibly (3) a damage waiver fee similar to the collision damage waiver you can get when you rent a car. But that's it. You pay for what you actually use, nothing more.

Renting presents several potential advantages over owning:

• Availability. There are usually rental outlets wherever there's good boating, which means you can enjoy the sport on a wide range of waters. Note the plural: usually you have more than one location to choose from in each locale.

• Variety. Rental fleets are usually varied enough that you can choose among several types of boats.

• Less work. When you rent, you don't have to clean the boat after you've used it, much less maintain it—another huge difference from owning.

The Downsides of Renting

Here are some other potential drawbacks to renting:

• Quality issues. The boats are used by too many people who think, "It's not my boat, and we're only using it just this once, so who cares how we treat it?" This cavalier attitude can compound the quality and condition problems found on some rental boats.

• Location restrictions. Rental companies usually limit the geographical area in which you are allowed to use their boats—that is, you have to stay close to "home."

• Time restrictions. Time limits are often imposed as well, such as daylight use only or returning by closing time, which may be as early as 5 p.m.

• Cost. Paying by the hour can add up to a lot of money if you go boating frequently, although renting can still be the lowest-cost option if you don't rent too often.

If you want to spend a lot of time on the water, there are better ways than renting.

Boat Clubs

Boat clubs also offer the opportunity to enjoy powerboats without the hassles of owning one. You generally pay an initiation fee when you join and then monthly dues that remain the same regardless of how much you use the boats. If you want to go boating often but can't go frequently enough to justify ownership, joining a club could be the answer. Cleaning the boat and other after-trip maintenance concerns are the club's, not yours, which can take a huge load off your mind—and your busy schedule.

An attractive bottom line is not the only advantage to joining a boat club. Consider the following:

• Few restrictions. Boat clubs usually offer "unlimited" boating. There are rarely any restrictions on when or how often you can use the boats—you can almost always squeeze some boating time into a busy work and social schedule.

• Variety. Most club fleets contain several types of boats, so you can usually select the best boat for the kind of outing you have in mind.

• Availability. The larger clubs have more than one location, and your membership is usually good at all of them—a nice plus if you want to go boating in different parts of the country as well as close to home.

• Training. Most boat clubs provide access to training. There are many things you'll need to learn if you're new to powerboating, and many boat clubs offer education programs—often including hands-on training—as a membership benefit.

Plan Ahead

The need to reserve early can eliminate spur of the moment outings since trying to get a boat at the last minute can end in disappointment if you discover that all of the boats at your club are in use. But this should be a serious problem only at the busiest times, such as on the Fourth of July or Labor Day weekend, when planning ahead is always the best idea. In many areas, however, every weekend can be a busy one; if your work schedule permits, weekday boating presents better opportunities. And the waterways are usually less crowded, too.

The Downsides of Boat Clubs

While boat clubs offer an attractive way to go boating, nothing in life is perfect, and boat clubs are no exception. Here are some other downsides:

• Quality issues. Like boats from rental companies, club boats are used by many different people, so they can also fall victim to the "It's not my boat" syndrome—though they do tend to suffer less than rental boats. If you plan to join a boat club, carefully examine some older boats in the fleet to see how well they have been treated and maintained.

• Location restrictions. Club boats may not be located as close to home as you could keep a boat of your own or even as close as the nearest rental center. Rental outlets still seem to outnumber clubs, though the boat-club concept is growing steadily and you can now find them all over the United States (and elsewhere).

Fractional Ownership

This is similar to time-sharing in real estate, though in many ways it is better. With fractional ownership, you and (typically) three to seven others own a boat together and share its use. Generally, you are guaranteed a minimum number of uses per month; additional uses at no additional cost—subject to availability—are often also a part of the deal. Actual availability, and how you can use it, varies by organization. Realistically, your guaranteed availability will probably be as much as, or perhaps even more than, the amount of time you have for boating; otherwise, you might be a candidate for 100% ownership.

Other benefits to fractional ownership include:

• Pride of ownership. The boat is yours, even if only partially, and thus you gain all the benefits, both real and imagined, that ownership entails.

• Better boats. Each user recognizes his or her vested interest in the boat and tends to give it better care than renters or club members give the boats they use.

• Maintenance and upkeep. Relax; none of this is your concern because the managing company normally takes care of these details.

• Guaranteed availability. Most fractional ownership groups use sophisticated computerized reservation systems to practically guarantee that the boat will be available when you want it.

• Variety. Fractional ownership organizations usually have multiple locations, and it is often possible to use a fractional ownership boat at a more exotic locale than your home port. And, some fractional ownership plans move the boats to different home ports at different times of the year, so you gain some variety automatically.

The Downsides of Fractional Ownership

Fractional ownership has its downsides, too:

• You have to share. Despite the careful scheduling that computerized reservation systems allow, if a boat has eight owners, seven of them cannot possibly use the boat on any given day. This can mean seven disappointed owners on a particular Fourth of July or holiday weekend.

• Location, location, location. Given that fractional ownership programs are not that widespread as yet, the nearest available boat may not be as close to home as you could keep a boat you own completely.

Leasing

Some boat-sharing programs involve leasing rather than owning. The result is the same: you have a guaranteed number of uses over the duration of your lease, and you get to go boating at a lower cost—you merely lose the ownership aspect. Full-time leasing as an alternative to buying, an option often exercised when acquiring a new car, has also started to surface in the world of boats, though it is still not as common on the waterways as it is on the highways. And yet, boat leasing is steadily becoming more widespread, and for many people it offers a practical alternative to ownership. The specifics vary from lease to lease, but most arrangements result in a flat monthly fee that covers everything but fuel, dock-age, and, if required, the crew (if you lease a very large yacht). At the end of the lease, you have the option of simply turning the boat back to the dealer or buying it outright at its depreciated value. Not all makes are available for lease and not all dealers offer the option, so this may not be a realistic alternative. But if the concept intrigues you, it's worth exploring.

The Upsides of Leasing

• Cost. The prime advantage of leasing, whether fractional or 100%, is the lower cost. Either way, what you pay each month will be less than what owning the same vessel would cost you, though not always by as much as you might expect.

• Easy payments. One payment covers nearly everything. You'll have to pay extra for fuel; it's an inescapable part of powerboating. And with a full- time lease, you'll probably be responsible for dockage (which is usually included in fractional deals). But most lease programs lump everything else into one monthly payment, which can be a huge convenience for busy people.

• Less work. Because the lease usually includes routine scheduled maintenance, one major headache of boat ownership is eliminated completely.

• Fewer hassles. Leasing also eliminates unknowns. When you buy a boat, you never know just when you may sell it or for how much. With a lease, you know in advance when the contract will end and exactly how much it will cost you in the meantime.

(Continues...)

Excerpted from YOUR FIRST POWERBOATby BOB ARMSTRONG Copyright © 2008 by Bob Armstrong. Excerpted by permission of The McGraw-Hill Companies, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.