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We’ve been in the market for beachside condo for a while now. Our plans are to enjoy the place on weekends during the summer/fall and offer it for rental during winter/spring. Many do the same here in central Florida and come close to breaking even by offsetting ownership expenses with rental income. The problem is that skyrocketing real estate prices and property tax rates over the last couple of years - versus fairly stagnant rental rates - have made it nearly impossible to recover enough income to make it affordable. For informational purposes, the waterside properties we’ve considered have gone from the low $200K to $500K+ over the last couple of years.
So…has anyone considered purchasing a live-aboard vessel as opposed to a traditional condo? There appear to be some OK prices on older large trawlers and motor yachts and we’re fortunate that we have affordable in water slips available. I’ve thought through many of the pros/cons - but would like to know your opinions.
Oh…and if anyone has any additional info or readings on the topic please share!!!
We recently sold an oceanfront condo in South Carolina that we had owned for 10 years for 5 times our purchase price, and they're still going up. It's doubtful that the current owners could reach the break even point with the amount of their mortgage payment, but it may happen someday as the rents increase. But who knows what the market will do, it slumped just before we bought.
Having said that, as much as I love boats, I'm sure a boat will be worth less in the future than what you pay for it now. I know this from experience. Our condo was the best investment we have ever made.
That was one of the reasons we bought our boat. We couldn't afford the 500k and up condo's (and don't realy like the condo living or rental idea to begin with) and cottages are starting at 1mil. Not to mention the taxes are outrageous every yr. We like the mobility of the boat and there are no property taxes so to speak on boats in Ct. Sure there is no appreciation on boats but I don't look at it as a monetary investment but more as a living investment. Do it while we are working, healthy and can afford it. After all, you can't take it with you and I'd rather try it than wait till I'm old and decrepid with all my investments and say boy I wish I did this or that 20yrs ago. At 47 I'm seeing more and more older family and friends trying (and failing) to hide their money so the state doesn't get it because somebody is going into a home. As long as you put enough away to live on. I'm not looking to make my kid rich when I die. It's only money. You make it everyday.
This winter will be the second year I send the boat down south. The first year I sent it to Savannah GA and explored the ICW from SC down into GA. This time I'm going to Miami and am going to explore lower FL into the Keys. The mobility aspect is unbeatable. I had met a couple in the marina I was in while in Savannah who have worked thier way through from texas, down western FL coast, eastern Fl coast and when I meet them working going up through GA. Each winter they explored a new area.
Gary,
If it's on wheels or can be put on something with wheels(like a trailer), the bank can come get it if you miss one payment and it's not an investment. If you really want an investment, buy something with dirt under it close to the water. Some areas seem to be overpriced right now. All the baby boomers are sitting around on their 401k, looking to move to the water when they retire. Keep in mind that even places somewhat out of the market now, will come around due to a simple fact, there is a limit to the availability of waterfront and near waterfront properties. Use your wit, look for something that's a sleeper or needs a little sweat equity. I love my boat but I bought a lot, built a house and a dock before I bought the boat. For most of us, investing means living for tomorrow.
Luck
Joe
If you can't afford the condo you want then yes, the boat sounds like a good option, but as others have said look at it as a lifestyle investment, not a financial investment because it's not going to appreciate.
That said, much of the waterfront real estate on the eastern US seaboard right now is absolutely bloated pricewise. There are some niche markets still reasonably priced and these are the ones to focus on. Right now much of the r.e. waterfront market has all the makings of a classic real estate bubble just as there was in the late 1980's. It doesn't take much to identify it either, just look at the huge amount of interest only ARM mortagages being handed out to buyers with questionable credit by lenders. The realtors and bankers are doing everything they can to artificially inflate and maintain froth real estate prices in hot markets and keep them inflated. This is the exact same type of lending as was done in the 80's which lead to a) bloated r.e. prices and b) the S&L crisis.
If you really want a condo, be patient, this market froth will boil over and when it does, many of these waterfront property owners will be selling their lots as fast as they can to take profits on the huge r.e gains they have made. When that inflection point is reached where sellers outnumber buyers you will have a buyers market and prices will come down fast, even in desireable areas. It happened in the early 90's, even in the most desired areas, and it will happen again. Real estate is no different than the stock market, when it gets overpriced the market eventually corrects, sellers bail taking profits and prices plunge as sellers outnumber buyers. Even all the smoke and mirrors interest only ARM loans and other gimmicks being used will not float the r.e. bubble forever. Many of these people who own waterfront properties have the bulk of their savings tied up in these properties, you don't think they are going to look to sell as they approach retirement to cash out that nestegg and look to go rent someplace? Sure they will and all that will do is create even more sell pressure on an already way overpriced market.
As an example, last week I looked at a small ranch style home (1600 sq feet, built in 1955 and it looked like it - kitchen looked like it was from the 70's) in Mt Pleasant, SC, the fruitcake wanted $430K for it. They may find some gullable sucker to buy it at that price at the top of the market, but it won't be me, and it sure won't be anyone who has done even the slightest study of the history of the US r.e. market over tha last 50 years. Be patient is the best advice I can give you if a condo is your final choice and look to newer, underveloped, less desireable areas because they will be tomorrows hot spots.
If you mean using a boat for a weekend retreat, in liew of a condo, I would enjoy the boat more I am certain. But that's me, I don't like (can't handle actually) condo living. I would buy a boat as an alternative in a heart beat. It would be one that is large enough to be comfortable on. I have two friends that spent two winters in FL on a 44' Ocean Yacht, just about the size I'd want.
We are leaning towards the weekend/vacation liveaboard. The idea of going back to the same place over & over isn't our thing. Spending a few weeks/months in: Sebastian, Ft. Pierce, Stuart, The Keys, Sarasota/Bradenton, etc. is a much better personal investment for our lifestyle. If we wanted to sit around the same place every weekend and relax we can do that at home.
Whether it's got wheels or dirt or water under it the bank can take it if you default. As a matter of fact the supreme court just ruled a little while ago that if it's got dirt under it and somebody says they can make more money for the municipality with that dirt then you can, they have a right to take that dirt regardless of whether you miss a payment or not.
Basicly establish your life style and invest accordingly to maintain that life style, but anything above that is just waiting to be state fodder. If you do buy a boat, setup the financing so that the boat is it's own collateral so that if for some reason you default they get the boat and thats it.
Here in SW Fl the rents won't support the prices of the condos whether on the water or not but the buying is still at a fever pitch. The right boat with the right amenities sounds like fun. You know it's a depreciating asset when you go into it and depending on a whole suite of variables the hit you take at the end of ownership can be from the sublime to the ridiculous.
Like Ferris Bueller said "sometimes you just to have to say ---- it"
I think you've got a consistent response going here. If you want to make more money in the long run, buy a condo. If you want more fun and more interesting stories to tell your friends and family, buy the boat. All I can add is, don't hold your breath waiting for the price of waterfront property to come down.
Mobile Bay, Pensacola, Tarpon Springs, Fort Myers Beach, Marathon/Keys, Miami, Bimini, these are a few of my favorite places all seen by water aboard "liveaboard size boats". I have yet to see a condo that can do all that. The condo is a better investment from a monetary stand point. The boat is a better investment from a mental health standpoint. You may be hit by a bus today. If you can aford the boat and the upkeep just do it.
My 2 Cents
I've often thought about a nice live aboard that needs repower. Don't repower, tie up at a nice marina and sell when you're done with it. What caused this line of thinking was $1,000,000 homes in town with $5000/week rents. Nice older 40 ft'ers available for $30,000. $3,000 seasonal slip rental. Sell the boat at the end of the season for $20,000 (or whatever) and you're in town the whole season (12 weeks) for $13,000.
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I have known quite a few folks that not only live-aboard, but travel extensively on their boats. Mostly, these were motor yachts and trawlers but, occasionally I would see some on a good sized convertibles. If you have not had the chance or desire to look into this market, you may be surprised when you do, as some of the better trawlers and motor yachts have actually been appreciating in value, over the past few years. Now, I am not saying that they are going up as fast as waterfront real estate, but up sure beats the alternative. A good quality trawler makes for a very good and quite comfortable live-aboard. 42 Kadey Krogans, 43 DeFevers, 45 Hans Christians, 42 Grand Banks and the like, are not only very sea worthy, but extremely ecomonical to operate, particularly when compared to higher HP motor yachts. If you are heading in that direction, be thourough with your homework, find someone that knows that market (as well as the boats) and DO NOT buy one that is too small or in need of too much work. The latter two being very common mistakes that take away from the enjoyment it is supposed to be. Good Luck!
As an example, last week I looked at a small ranch style home (1600 sq feet, built in 1955 and it looked like it - kitchen looked like it was from the 70's) in Mt Pleasant, SC, the fruitcake wanted $430K for it. They may find some gullable sucker to buy it at that price at the top of the market, but it won't be me, and it sure won't be anyone who has done even the slightest study of the history of the US r.e. market over tha last 50 years. Be patient is the best advice I can give you if a condo is your final choice and look to newer, underveloped, less desireable areas because they will be tomorrows hot spots.
lol..I bet that is what the people who sold their houses in Ct, NJ , or NY for 20 times what they paid for it 10 years ago said before they moved into their house in Mt Pleasant..lol
In the early 90's my wife and I had a 28' Carver on the Chesapeake Bay. Belonged to the Bush River Yacht Club and kept it there. Lived on that boat every weekend and loved it. It was much better than a Condo with a pool. I say go with the Liveaboard. Just my 2c
__________________
Glacier Bay 2640/twin 140 Suzuki's.
"If you're lucky enough to live by the sea, you're lucky enough"
Just a random thought:
If you go the live aboard route...
and you fish...wife doesn't
where do you SEND her
WHEN you head out at 5 am to fish offshore?
Thanks for all of the replies! I'm keenly aware of the argument regarding appreciating vs. depreciating asset but if I were to find a 3 bedroom home with a slip out the back door we're talking about a minimum outlay of $750K-1M in my area. I've seen some real nice deals on well cared for 3-4SR trawlers and motoryachts for less than 1/3 the outlay which is what spawned the idea. I was thinking something in the 50'-65' foot range. Since we're in FL, we enjoy island trips and thought the boat would also make a nice base camp for our trips.
Opinions - Weekend Liveaboard vs. Condo? 
