Possible method for financing upgrade from R25 to R29

[baz]

We have a very nice MY2010 R-25 with all the various 'goodies' installed. However, 1st Mate and I have come to the conclusion it's just too small for us. So we have been trying to understand the options for upgrading to the R29 which we believe would provide ample room for us. 1st Mate has a balance issues, cannot move quickly and gets stiff if she cannot lay out flat now and then and getting into the v-berth can be a nightmare at times for her. Heaving herself up and onto the dinette seating is also quite difficult as well as getting off and down onto the gangway floor surface. WE also carry two very active Fox Terriers which get underfoot at times making it quite dangerous for 1st Mate.

So, what to do ?

I will not go into the following in too much detail but suffice to say I'm looking for some feedback on this method for upgrading from our R25 to a nice used R29 or even a new one.

Step 1 Would be to sell our R25. We had the boat surveyed and its market value was $115K. We assume we could sell it for around this value and even negotiate some if necessary.

We figure our R25 is depreciating at the rate of at least $10K/year.
Our monthly average moorage cost is some $400 or some $4,800/year
We buy on average some 300 to 400 gallons of diesel each year at a cost around $1,600
Other misc things such as Marina over night docking might come to $500/year
Engine and anode maintenance is around $500/ year.

These costs amount to some $17,400 each year. Over say 3 years this amounts to $52,200 in our pocket

Step 2 Would be to invest the R25's sale proceeds

Step 3 Would be to wait maybe 2 or 3 years depending on how well the Investment did. I would expect to make $50K over a 3 year period... and don't ask me how I figure this. 😉 The danger here of course would be losing rather than making money.

Step 4 Would be to use the R25 sale value, plus its $50K investment increase, plus the saved $52,200 to provide at least $200K to be used for buying the R29.

The real downside to this is being without a boat for 2 to 3 years.

Comments welcomed. Thanks. 🙂

 

[Todd]

I want more details on how to get a 50% return on investment every two years.

 

[baz]

Netflix, Amazon, Boeing stock for one example. 😉

 

[Brian B]

How does that saying go? Oh yes, a 25' tug in hand is worth more than a 29' tug in the bush.
Meaning:
"It's better to have a lesser but certain advantage than the possibility of a greater one that may come to nothing."

 

[Spinner]

Hmm, my financial planners tell me to not invest in equities if the money is needed within 2-3 years....maybe it would be helpful to go at this a different way: it seems (although you don't state) that your requirement is to have a 29 without incurring significant additional cost. The plan you laid out seems fairly risky to me.

If the goal is to have a 29 with little extra outlay, here are some ideas :

Buy a 29 and enter into an arrangement with a charter company wherein you get a certain amount of time and they charter it out for you during the rest of the time.

Buy a 29 and keep it on trailer, thus saving a portion of current mooring costs (I assume some cost for launching)

Find a partner and buy a 29 in partnership.

Last, but probably not really desirable, sell your current boat, use the proceeds and the money you are saving, for chartering a 29 for significant periods of time. You would probably come out ahead....

Sue P

 

[trailertrawlerkismet]

Barry:

You present an interesting set of scenarios. My advice, if financially visible, would be not to wait 2 to 3 years and not count on a big financial rate of return on an equity investment.....as soon as one banks on this it certainly will fail. If it were me, and I understand completely that it is not, so maybe what I say is easier said then done.....but I'd list the R25 for sale and be on the lookout for a low hour used R29. I'd also take this a step further and suggest you talk with our good friends at the factory in Kent to discuss your boat wants, needs and desires. My guess is that when Andrew, Jeff or Kenny read your post they'll come up with a deal you can not afford to turn down. If you can justify a change now, it will not get any less expensive later on so I'd make the change and enjoy the next several years in the style and comfort you deserve.

Jim

 

[knotflying]

Barry,

I am with Jim.
My rule of thumb is don't invest any money you need in 10 years. Plans only work when you have control over the outcome. Your biggest item, investing the money, has no control by you. See what you can get now and afford, even if you have to finance a bit more. If it were me and you were able to do it, I would make sacrifices on some other things to have the money to pay for the increase in monthly costs. Things could change in 2 or 3 years and your dream could be out of reach. See what you can do now to get the 29.

 

[kevinflanagan]

We are currently on our first Ranger Tug, have had her less than a year, and I can't imagine being without for 2-3 years!
I'm hooked!!! I agree with the previous comments, if any way to pull it off now to upgrade and use now that would be my option(I'm not getting any younger !)

 

[walldog]

Barry, at our ages 2 to 3 years could make a lot of difference in our abilities and desires. Do not buy what you cannot afford, but being without a boat for 3 years does not appeal to me. We modified how we were using our vee berth and it made all the difference in my access. It only took me 2.5 years to figure it out. PM me for details.

 

[baz]

Thanks for all the good feedback here and via PMs... It all has given me some pause for sure. Jeff, Andrew and Kenny must be asleep or are sharpening their pencils. :lol:

I think the most troubling aspect for us on the R25 is the V-berth. Herb has given me some food for thought on how we may resolve this and I will be investigating this as a possible solution. Herb has suggested pulling the front center cushion, laying down two good quality sleeping bags on port and starboard sides to make egress in and out of the V-berth area easier on the body and legs etc. As 1st Mate likes to lay out flat much of the time we're underway I'm going to have to figure out how to bolster the area under the starboard side helm's wiring/cable box that is in the way for comfortable sitting and resting her head up. Maybe a suitable number of firm pillows stuffed under that box might do the trick... dunno until I try it though.

 

[berniefiedler]

Just as an aside, I am a Certified Financial Planner(tm), Certified Trust and Financial Advisor and Accredited Fiduciary Investment Analyst(tm) as well as a Subject Matter Expert used by the North American Security Administrator Association to write and review questions for the licensing of Investment Advisor Representatives. The investment suggestions in replies to this post are rational and well founded. Predicting investment return over a period less then five years is surely a recipe for disaster.

 

[fairweather]

$400/month moorage?

We keep our R-29 in La Conner in a covered slip for $260/month including power. We live in Kent and it takes about 90 minutes to get to the boat. But when we get there, we're pretty much right in the San Juan's (endless fun). We're pretty much limited to weekends on the water (work week still gets in the way). Anyway, there's $140/month savings toward the additional expense of a larger boat kept in the water. Re the bigger boat, I'd definitely work with Jeff, Andrew and Kenny - they are very, very creative getting you into the boat you want, sooner than later.

Marc

 

[baz]

Marc: That is something I've considered... that is, using La Conner as our base. It's but an hours drive from Edmonds. It looks like La Conner (Port Of Skagit) charges $226 for 26' covered moorage... and since using my last Edmond's monthly charge of $414.64 (which includes power, tax, environmental fee and & leasehold fee) this would save some $189/month or some $2,264/year. That is a significant savings even with the extra car's gasoline costs for getting to/from La Conner. Then of course there's the additional savings in the boat's diesel fuel if we primarily tool about the northern spots of the Puget Sound etc.

Spending the extra $2,264/year for the luxury of having the boat just 5 mins from our house is, well, a luxury I suppose.

Thanks for the suggestion.