Sell house, buy boat or vice versa?

[stewie]

Do remember that your house will appreciate and the boat will depreciate and cost a lot more than the house to run. If you can buy the boat and rent out the house to provide you with an income that would be the ideal situation. If you well the house to buy the boat it is going to be difficult to buy another house when you decide to sell the boat. Think about chartering aa bare boat to see if you like it before taking the plunge.

[flyingnut40]

Our strategy was to sell the expensive house and buy a cheap place away from the high prices of the city and buy our boat with excess equity.
If these COVID times have taught us anything, it's that having a small place to retreat to is a good idea!
Someone once said, "Never sail without an anchor"
I hate to think what it would be like to be trapped in one spot for a year or two while the next pandemic and country closures sort themselves out.
Just our strategy, YMMV

[letsgetsailing3]

Originally Posted by stewie

Do remember that your house will appreciate and the boat will depreciate and cost a lot more than the house to run.

None of that is a given. Housing prices are elevated at the moment and may very well decrease at some point. Property taxes and insurance are also expensive right now.

An argument could be made for selling while the market is still hot and renting while one figures out the ins and outs of boating.

[billdomb]

Originally Posted by wyb2

Lot of variables.

But the way I’m reading this, in one situation you move 2000 miles, then start shopping for a boat. But in the other situation you buy the boat while living 2000 miles away. Seems like which one of those paths you want to pursue is going to be the deciding factor.

But if comparing apples to apples, it’s almost guaranteed to be less expensive to unload the house sooner and not be paying taxes and maintenance on it, plus not paying interest on a boat loan.

Remember, you're not just shopping for a boat but also a place to KEEP it. And, in your case, one that will permit live-aboard. Not so easy these days.

[cr180]

We bought a boat we could afford and still keep the house, with the intention of selling the house. But after 18 years, we’re still trying to decide if and when to sell the house.

And thought we would sail to the Caribbean. But soon learned we’re not blue water sailers and have opted for passages to the Bahamas.

Moral of the story …. Agree with others who have said that these are more emotional than financial decisions. Be a shame to make an irreversible decision only to find you’re unhappy.

And by the way, will draw fire I’m sure from the cat enthusiasts, but we see many catamarans in search of marina slips in Florida only to realize aren’t many to be had, and those are full up. Boat yards to haul cats similarly sparse.

[jmcdboater]

We’ve lived aboard, and rented out our home while we lived aboard. It worked out OK, but wasn’t ALL positive. Which my wife and I were both fine with. Life is full of surprises, and we’re realistic enough to know they won’t all be good ones.

One BIG thought. A good home is an investment, an appreciating asset. A good boat, even with a solid maintenance plan, is a depreciating asset. How much will depend on how solid your maintenance plan is. Think long and hard about both of those points. Your heart and gut will guide you forward.

[HeywoodJ]

We feel we got very lucky with timing, so what was good for us may not be good for others or other times. In 2015 we kept the house with a mortgage at 3% and rented it out. Bought a boat with a loan at an even lower rate (!). Sailed hard for 7 years. Someone else paid our home mortgage, taxes, insurance, and maintenance costs for us.

We recently sold the boat for 4% less than we paid for her (tail end of pandemic valuations), which after broker costs means we paid about 14% of the value of the boat for seven years' use (plus, of course, running and maintenance costs). In the end we moved back into the house where someone else had paid about 20% of the total mortgage costs.

It only worked for us because a) interest rates were phenomenally low, and b) the home rent covered all housing costs (we netted about $1000/year, which didn't cover boat costs but at least bought some beer).

I do agree that there is a large emotional component, which may be different for you and your partner, and both the emotional and financial pieces will be very dependent on the specifics of your situation.

[Fore and Aft]

Kraken whatever you do I think it's good to have an exit strategy. I know too many people who have made similar decisions and are now trapped onboard an old boat with no money and no idea how they are going to afford to live on land. One good friend suffered a medical episode that immediately stopped him from living aboard. Luckily his friends and family helped him out with accommodation.
Cheers

[Icarus]

Originally Posted by Grith

Third Option

Sell relatively expensive house in a good location and buy a ridiculously cheap waterfront house with jetty in remote unknown location and a cruising oriented big trailer sailer and camper on a tow tug and retire early to sail and adventure travel on the balance of the funds!

Keep a home base and tow a small yacht to desirable cruising locations and home again when had enough of yachting/travelling life for repairs and recuperation.

We did it.[emoji846]

Interesting..draging a yacht across the country...

[rsementi]

That’s very similar to my plan. I’m restoring a boat to be used for charter and for pleasure. I’m hoping that the charter income will help me with my future upgrades.

[alctel]

I moved onto a boat, partially because I have no hope in hell of ever affording a house where I live. Born too late and with no family money.

[pbmaise]

I financed the initial purchase in cash. I then leveraged my house with a line of credit on a variable rate for repairs and living costs. Mind you this was when rates were low. When money became tight, I finally sold the house and this is where I got the shock. The market had crashed owing to the volcano eruption that buried Kapoho. Pity, my home wasn't destroyed since it was fully insured. Insurance didn't cover for the loss owing to the market crash.

I had to sell the house for about 1/2 previous value when I first went sailing. This was also a loss compared to investment.

Sale of the home paid off the line of credit and left enough money to add a new boom, and recut my sails to prepare to move it to Langkawi Malaysia to find a buyer. There, I found a buyer willing to pay enough money to recover most of my investment. Overall it wasn't a net profit, however, compared to people who buy a new vessel and then face a huge depreciation I came out far better.

I was a very rare case because of the volcano where the home was the depreciating asset and the boat was even. Mind you I got the vessel at a very good price owing to condition.

What about my nest egg from that point forward? Lets just say don't listen to me when buying stocks.

On hind sight I wish I had sold my house and my car. Had I put these cash items into the boat instead of using my line of credit I would have come out far better. One thing preventing me from selling that house was my X was living in it and we were co-owners. Yucks.

[Buzzman]

Originally Posted by wyb2

Well, both. Grith, who made the original suggestion, has their location as Australia. The OP was asking about the eastern US.

Australia has 8% the population of the US packed into only [checks Wikipedia]… 75% of as much land. Something tells me that is not irrelevant when it comes to property values. On one hand, the Outback. On the other hand, it is literally an island, so kinda hard to beat for potential waterfront property.

In the states, where everything (including the general culture) was built when there were 100 million fewer people, I think affordable waterfront property falls into two categories:

1. Nine months of winter (Alaska, northern Maine, Michigan’s UP) or
2. Industrial wastland.

Property prices in Australia are insane. watefront property prices even more insane.


As an exercise, search 'Exmouth WA real estate canal' an dyou'll find a canal development on the exmouth peninsula on the north west coast of WA. it's between Broome and Kununurra, and in a desert, miles from anywhere. Only attraction is fishing and snorkelling the Ningaloo reef.


But a bare block starts at AU$700,000.


To put that into perspective, that will buy a 2-storey modern house in the outer suburbs of Sydney or Melbourne.


No such thing as "cheap waterfront real estate" in Australia.....

[Celestialsailor]

There is a phrase that has/had always stuck with me..."Real estate is king". I bought my Hallberg-Rassy 35 for $15K. It needed a lot of work but I knew what it needed and I have the skills to fix things...including rebuilding the engine (which was why no one else wanted to or had the skill set to pull it off. When I had all the vessels amenities working again, I moved aboard and rented the house out. For me, I can sense what the house market does and buy low and 2-7 years sell high and live on a boat again for an inevitable housing slump. Then I sell what ever boat I have a buy a fixer house and repeat the process. I sold the HR 35 while in Mx after 3 years, moved back to my house and sold it at a high and bought another fixer house and flipped it after 2 years and now have a ranch in the country. I'm now on boat #9 but I am slowing down now. I cruised 10 years ago for 3 years and had a blast. I observed a lot of dreamers that sold it all, only to return after a year or 2.
In Ca., if you bought a house 15 years ago and sold it and doubled or tripled your money, I can tell you, yes you could buy a nice boat. But that house you sold will continue to increase in value...the boat you bought won't. If you decide to sell the boat in 5 years, you will most likely sell it for less than you paid. Meanwhile the house you sold likely will have increased in value an average of 5% a year and from 2021-2022, they increased 18%!

So if you can keep the house and buy a less expensive boat and rent the house out, you're better off.

[Tin Tin]

Keep house, rent it out, sell absolutely everything else, take out a loan that rental covers repayments- this sets the budget for the boat. This gives a fall back position if the wheels fall off your plans. Mortgage will go down, if you buy a catamaran chances are it will maintain its value so when you sell it the now lower mortgage balance will be covered and you move back into the house or sell it. You will be buying and selling house in same market, so downsize and buy a fifth wheel with the difference