It’s the ONLY thing,’ said the Water Rat solemnly, as he leant forward for his stroke. `Believe me, my young friend, there is NOTHING–absolute nothing–half so much worth doing as simply messing about in boats. (Kenneth Grahame 1859-1932)
The romantic notion that Grahame conjures up in his novel ‘Wind In The Willows’ often forms the basis of the decision making process when purchasing a boat. However, this is not necessarily the best approach to inform your decision, especially if you want to maximise the value and minimise risk in your asset. The processes described in this article are both practical and legal in nature and should assist in planning and considering your next purchase, hopefully allowing ample room for the romance.
Many years have passed since I first dreamt of owning my own yacht, with plans and ideas of this boat bandied about late into the night between like-minded friends over the odd glass of wine, when finally the yacht ‘Dawn’ appears. The advertisement described her as a 33 foot vessel that had been partly restored and in desperate need of a good home. She was moored in Old Cremorne, Sydney and registered with the Sydney Amateur Sailing Club, a club full of loved yachts of yester-year.
Dawns journey started in 1937, built on the shores of Lake Macquarie north of Sydney by Les Steel, who went on to build ‘Rani’ the first winner of the Sydney to Hobart yacht race and later ‘Struen Marie’ a two times winner, so indeed she came from a good stable. Raced out of Belmont Yacht Club on the lake, she ventured south in 1940 to find a new home at Middle Harbour Yacht Club being part of the ‘First Fleet’ with registration number MH 21. She had been purchased as a present for the new owner’s son who sadly was killed during the Second World War. She was then sold by way of letters of credit to the forward-hand who skippered her as she lined up to take part in the flying of colours for the queens 1954 visit on Sydney Harbour.
The new skipper raced her hard until the mid-nineties, and when I met her, she was tired, with almost half of her ribs broken at the turn of the bilge. Entering her after all those years of glory her floor boards were floating in the bilge and the pervasive dank smell of a closed boat, grease and bird’s nests hurt the nostrils. There were however, some significant positives and it was these that certainly swayed the decision making process over the next three months, after walking away with the thought that this project was just too hard. So what were the steps that turned such a derelict vessel into a project worth doing?
The steps described below are the culmination of my own and others years of boating and marine industry experience. Recent research found little by way of real guidance for prospective purchasers as either, the information was written from the broker or registration perspective or was so legalese it provided little practical guidance, not to mention the conflicts of interest found within some industry articles.
So what are these steps?
- Take your time.Often the purchase is guided by emotion and it’s this state of mind that needs to be changed. So take your time, let’s face it whether your buying new or second hand, it’s a buyer’s market so time is on your side and good research will make your purchase all the better while having the effect of giving you some space to shift your mind set to a more pragmatic view.In respect to Dawn, we walked away from her however after months of deliberation we considered that the raw material of rig and fittings, hull timber (King Billy Pine) and lead could be sold and at worst we would break even. But it was the very quality of these materials that gave the idea of restoration wings as any future construction would be based on a sound foundation of quality materials.
- Make a list of what you want to do with the boat and your needs, this can be a short list or as big as you want, but be real.The list that flowed from the idea of owning Dawn was based in the practical reality that the vessel would be used for lake sailing with the occasional coastal hoping and short overnight stays.
- Consider how much you can afford: to purchase the boat considering, the annual ongoing costs of maintenance, mooring, registration, use of vessel and insurances.Dawn’s purchase price was so low that it could be redeemed if she was to be scrapped. And after purchasing her she was then sailed for a further four years before any decision was made to restore her with ongoing minimal costs.
- Research, if a second hand vessel.This should not just be limited to the survey it should look at as many aspect such as; the class, history, the builder, popularity in the market place i.e. for future saleability. Where possible speak to other owners, brokers, shipwrights and marine mechanics and industry bodies.Once Dawn had been viewed for the first time, she was slipped and we were able to see her hull, keel, the condition of thru-hull fittings and rudder stock that all appeared in good order. Her history was known to a degree, but the real surprise was to follow after speaking to a good family friend when he informed us that, Mustang (aka Dawn) had been owned by his uncle (the forward-hand) and we were then able to piece together her full history.
- Research, if a new vesselThis should not only make the above checks as stated, but extend to researching the builder/company before commissioning your boat. This point is especially important and should form part of the process before any contracts are entered into especially, where the vessel is being constructed overseas. The reality is that if the builder/company constructing your boat becomes insolvent there is the real possibly that you’ll see little of your invested money let alone the costs incurred and difficulties involved in recouping this money in a foreign country.A recent client, based overseas contacted our office stating that he was purchasing a vessel in Australia and he had the purchase contracts that needed reviewing. As part of this service we researched the builder/company’s history, the directors and company’s credit history and researched the premises that were leased to a company already under administration. The importance of this information cannot be underestimated, especially in our client’s case, as it allows the purchaser to make an informed decision whether to proceed.
The contracts were reviewed and several changes made to protect our client’s interests and while not all were accepted by the builder, our client was in a better position had the contracts not been amended. The significant issue here is that many purchasers either don’t receive contracts or the contracts are purely for the benefit of the vendor and that it should be realised that contracts are negotiable instruments that should reflect the interests of all parties.
- Design your boatThat is, using your to do, needs list and all research sketch a boat that fits your needs and your budget. Importantly you must distinguish between what you dream and what you can afford.This step really is critical as it draws the purchaser’s attention to any weakness’s in their purchase plan, but more importantly this information guides the decision making process whether in selecting the boat or in drafting the purchase contracts and schedules that describe the boat’s inclusions.
The steps that have been described, while not an exhaustive list, go some way to providing guidance to making an informed decision when you purchase your next boat. And while boats are often viewed as holes in the water that you just throw money into, hopefully your next boat will not give you too much grief, and provide much enjoyment, as you minimised your risk and maximised your resale value. Dawn has not realised her full value yet as she is not fully restored but her hull is tight after replacing the broken ribs, she has a new diesel engine, cockpit and her interior is framed ready for the next step in her restoration but most importantly, she’s back in the water with a first placing already under her belt.