Should you fix-up your boat before you try to sell, or sell it as-is? The answers to these questions may surprise you.
Home renovation shows, like "Property Brothers," "House Hunters," and "Love It or List It," are my guilty pleasures, and I've always wanted to see a similar show about fixing up boats. There's something appealing about the Cinderella storyline, the promise that with a little bit of hard work (and a workforce of good-looking carpenters and designers), anyone can have a dream home or flip one for profit. But, for the average homeowner, does it really make sense to "invest" $50,000 to $100,000 in renovations before selling? Also, do the same principles apply to boats?
When my husband and I went to sell our 35-foot boat, we found ourselves staring down a long list of projects and questions: Should we replace that tired countertop? Or refurbish the worn cabin sole? Should we fix a soft spot in the deck? There were no straightforward answers. BoatUS is home to many boat experts, so we put two questions to them: "Should you invest in fixing up your boat before selling it? And, if you do, will you make money or recoup all of your costs when you go to sell the boat?"
Debbie Schaefer from BoatUS Consumer Affairs says the answer to the latter is, generally, "no." Debbie spent 10 years selling real estate before joining BoatUS to specialize in consumer-protection issues for boaters: "In the real-estate industry, we'd advise the seller that the house has to look clean, neat, and fresh for a buyer to even walk in the door. If you want to remodel a kitchen or a bathroom, do it for yourself; you'll never get dollar for dollar out of it." She says the same is true for boats.
Real estate numbers support this. For Remodeling magazine's 2019 Cost vs. Value Report, 136 U.S. metro areas were surveyed to compare the average costs of remodeling with the value these projects retain at resale. They found the value at resale was, on average, 66.1% of the original cost. A major kitchen remodel recouped 62.1% of cost (minor kitchen remodels recouped 80.5%), and a midrange bathroom remodel recouped 67.2% of cost. If this seems to run counter to what you've seen on TV, then it's worth noting that many industry professionals have spoken out against home-renovation shows, claiming that the portrayed costs and profits are unrealistic.
Improving your boat can reduce the likelihood of lowball offers and the time it takes to sell.
But does that mean you shouldn't fix up your boat for sale? No. Even if improvements don't add dollar-for-dollar value, they enhance your own enjoyment of your boat while you own it. As yacht broker Dale Partna of Crow's Nest Yachts in Seattle, Washington, explained, "Improving your boat can reduce the likelihood of lowball offers AND the time it takes to sell," saving you dockage, storage, and winterization costs. In many cases, you can recoup some of the cost of repairs and improvements.
Sandy Wills, senior coordinator for BoatUS's membership department, shed light on where to spend your money. He spent 21 years leading the BoatUS Value Check Program, a member service that tracked boat resale values and transactions. Wills, who estimates he's studied the stats on more than a quarter-million used boats in his career, suggests hiring a surveyor, who can help you make the right decisions.
Hire A Surveyor
Wills says a surveyor should be able to help you answer questions like: What should I do? What should I not bother doing? What price range should I expect in this market? "Because they will know," he says. "A surveyor works on the tail end of these transactions every day."
Wills suggested paying a surveyor to spend time walking through your boat: "I recommend that sellers ask for an informal survey, not a detailed ‘condition and valuation survey' like the buyer will want. (See "How To Find A Credentialed Surveyor" below.)
How To Find A Credentialed Surveyor
BoatUS's Sandy Wills recommends searching for a National Association of Marine Surveyors (NAMS) or Society of Accredited Marine Surveyors (SAMS) surveyor. "They have strict educational and reputation standards. Talk to them and find out their expertise and how long they've been doing it. Ideally, look for someone familiar with your type/size of boat," he says, noting that not all surveyors will be willing to conduct an informal survey, as described in the article, but others will be happy to help.
Michael Hunter, a NAMS CMS & SAMS AMS surveyor, says that various factors will drive the cost of a presale consult including the local market, travel time, size of the vessel, and surveyor's experience. "I charge by the hour using a by-the-foot price as a best-guess retainer," says Hunter, "You tend to get what you pay for. Look for skill and competence, not price." While prices vary, Hunter says many surveyors charge around $100 an hour, and an average 40-foot boat would take three to four hours for a presale consult.
He suggests waiting for the right surveyor: "If the surveyor is busy, it's probably for a reason. Don't let a sale or seller drive the timeline. Nothing good ever happens in a rush." Hunter also advises sellers to look for surveyors with a reputation as a ‘buyer's surveyor,' as they tend to be much more extensive in their inspection.
Michael Hunter, a NAMS-CMS and SAMS-AMS surveyor and principal investigator at Hunter Consulting & Survey Services in Springfield, Missouri, calls this a presale consult. "I don't write a formal report, but I still do everything I'd do for a buyer's prepurchase survey. I then create a list of things the seller should know about, or that would be flagged by an experienced prepurchase surveyor. I generate a full valuation in accordance with the Uniform Standards of Professional Appraisal Practice and help the seller establish a market value."
Deal With Structural And Functional Issues
The surveyor will help you catch any serious problems so that you know what the buyer's surveyor is going to find. "These deficiencies, if not fixed, could cost you, the seller, during negotiations," says Wills. "For example, cracked chain plates would be something you'd want to take care of. If you don't, that surely will be revealed during the buyer's survey, and could compromise the buyer's confidence in other aspects of your boat."
Ryan Miller, principal of Latitude Yacht Brokerage in Newport, Rhode Island, says a seller "should make the boat a safe boat to sell" and emphasized the importance of full disclosure. "It's not about money. It's about the boat selling."
Tom Bossenger, director of sales and marketing at California Yacht Sales in San Diego, California, says, "If an owner doesn't fix major issues, they're going to lose that money during the sale because those issues will come out and the buyer, unless he has more money than sense, is going to ask for a sizable repair allowance. If there's a $10,000 fix and you don't fix it, you're going to lose it on the back end of the sale when the problem comes to light. Now, you're probably not going to get that money back on a boat under $30,000, but if you don't make that fix there's a chance that you're not going to sell the boat at all. If it's a bigger boat, $100,000-plus, the chances of you recouping that money are greater."
Getting A Boat Up To Expectations
Wills emphasizes the importance of knowing what is typical and appropriate for a boat. "For example, you can't find a Grady-White on the used-boat market without a T-top, either factory-installed or aftermarket. You expect it. A Grady-White should have a T-top, fish finder, radio, because this type of boat normally has these things."
Getting to "typical and appropriate" can be a fine balance. "Don't put a $10,000 electronics package on and expect to get $10,000 more for the boat," Wills says, "But if you had a bare-bones boat with no electronics on it, you need to do something to get it up to basic expectations."
Of course, expectations around what a boat should have changes over time. Partna said, "What was expected 20 years ago and what's expected today are different." He gave the example of a 50-foot single-engine powerboat with a bow thruster: "Most people would prefer to have both a bow and stern thruster in a single-engine boat. If a stern thruster costs $20,000 to add, should you spend $20,000 or just market the boat as-is and price accordingly?" In this case, because stern thrusters are not standard on this boat, Partna would suggest not adding a stern thruster. "However, on a boat that doesn't have a bow thruster because of its age, and is expected to have one, it would make sense to add one. You're likely to recoup a higher percentage of the cost. Also, if there's potentially two or three similar boats on the market and one of them doesn't have a bow thruster, the shopper is going to go right to the boats with the bow thrusters. So your boat may not even be in the running if it doesn't have equipment that's up to standard."
Deciding where to invest in fixing up your boat for sale comes down to what BoatUS's Sandy Wills says are two questions that every boat owner should ask themselves: What will it cost to make the repair or upgrade? What will it cost if I don't? Fortunately, there are a few easy and inexpensive things you can do, which will always improve the marketability and speed up a sale. Here's what the pros had to say:
1. "Declutter by removing anything that's not intended to be sold," says yacht broker Ryan Miller. "You want people to be able to open lockers and cupboards." He suggested removing personal effects that might make it harder for the buyer to imagine themselves in your boat. "Take the junk off, but keep Coast Guard-required gear, boat hooks, lines, fenders, pots and pans." Spare sails may be included in the price but don't need to be on the boat for viewing. Miller suggests providing the prospective buyer with an inventory of functional spares or redundant equipment and storing these items off the boat.
2. "Cleaning and waxing is the best money you can spend," Miller says, "including all compartments, lazarettes, bilges, storage areas, and awnings. Remove stains from furniture covers and headliners. Tidy up dock lines, sheets, and halyards. In the interior, make sure the heads are spotless and odorless and ensure the bilges are dry, clean, and odor-free." Consider hiring a professional cleaner.
3. "I've found that a lot of potential buyers walk right off a boat if it smells," says yacht broker Dale Partna. "Not necessarily just holding-tank smell, but musty smell, moldy smell, diesel smell. If a boat smells like anything, that should be dealt with. In some cases, it's the sanitation lines, and that can be a pretty complex and involved problem, but it's worth addressing if possible." (See "Taming Boat Odors".)
4. "Keep the engine room clean and tidy," says yacht sales director Tom Bossenger. Tidying wiring and replacing old hoses signal to the buyer that the boat is well cared for. Ensure basic maintenance is up to date including replacing oil, changing filters, and topping off all fluids.
5. "Repair anything you already know is broken or defective," Miller says, "including all electronics, lights, and accessories." He also recommends checking all equipment on your inventory list and repairing any inoperative equipment or removing it from the list.
6. Make the boat accessible. "If it's tarped in your backyard, that's not very easy or practical for the buyer," Miller says. "It should be in the water, near the water, or easy to launch for an inspection or survey." If your boat is out of the water, Miller suggests keeping it "cleaned and covered, and add new zincs so it looks like it's ready to splash."
7. "Take good photos that are bright, clear, and high-resolution," Miller says. "Put 20 to 30 photos in the listing and then offer additional photos (say, 50 to 70 in a Dropbox file) to people who are serious. If you're not good at taking well-lit photos, find someone who can help, or consider hiring a pro."
8. Compile digital copies of service history, inventory list, photos, and survey. "If you do the work on your boat, keep records of everything you do," Miller says. "Or if you've contracted a boatyard, have records of your invoices." Digital records are best. "We're working with buyers from all over the country, and the more info we can share with them the better," he says. He suggested compiling a detailed inventory, service history, a recent survey showing the boat in good condition, and additional photos — especially important for people who'll incur travel expenses to view the boat.
9. Like with homes, paint and varnish go a long way. Wills is in favor of brightwork touch-ups, "If it looks ugly, sand the peeling varnish off and either paint or revarnish it."
10. Sometimes partial improvements can be effective, too. "I'd replace stained carpet but wouldn't reupholster everything on the boat," says Wills. Similarly, replacing deteriorated isinglass might deliver a better value-to-cost ratio than replacing an entire dodger or awning that still has life in it.
11. If you have the skills, you may want to embark on small fiberglass repairs. Anything that you can do yourself, do it, because that goes directly to marketing and saleability.
Investments That Increase Enjoyment Help Boats Sell Faster
You may be less likely to recoup the costs of some improvements, but they will increase your enjoyment while you own the boat and make your boat more desirable when it comes time to sell. Miller says that typical investments that fall into this category include upgrading canvas, upholstery, electronics, sails, and engine. "Let's say you have two identical boats for sale, but yours has new electronics and the other doesn't," Miller says. "They're both going to sell for $50,000, but yours will sell first and faster because you have new electronics."
Location, Location, Location
Wills cautioned against overimprovement. "You can put a half-million-dollar house in a $150,000 neighborhood and you're not going to get half a million dollars for it. Market context matters. It's the same with boats."
When determining your boat's value (and investments you'll make in fixing it up for sale), consider your local market. "The West Coast is much more expensive than the East Coast," says Wills. "Florida is generally less expensive because there are so many boats for sale there."
Timing is also a factor. "If you're selling a boat in Detroit and not aggressively marketing it in the fall, you're probably not going to get it sold until next May," says Wills. Consider putting it on the market earlier in the season, so a new owner could still get it home and enjoy it.
The Big Reveal
Along with removing all of our personal effects from our 35-foot sailboat and giving it a deep clean, we painted the countertops and fixed the deck. The boat took a few months to sell. On reflection, fixing her up for sale made her more beautiful and sparkling.
Our improvements may not have been as exciting as those on the home-renovation shows, lacking the luster of high-end décor, quartz countertops, and no "big reveal." But when it did sell, we were satisfied with the price and terms. She was seaworthy and ready for her close-up.