In article et,
Maxprop wrote:
Fine. Let's calculate an example. Let's say that a Beneteau 35s5 is going
for $64k and you have a down payment of 10%. Show me how you are going to
save money, or at least not lose any, by financing the boat. We'll assume
you have sufficient money in relatively liquid assets to purchase the boat
outright.

I'm waiting.

Changing numbers to something more realistic....

$20K buy + $5K fix-it money from an equity loan of ~5%.

Slip fee: $400/mo (probably a bit high)

Misc/Insurance: $200/mo (way high in my opinion)

Payment on loan about $200/mo.

Tax benefit ... well, that's proprietary, but basically, it's a
percentage of the slip fee, misc, loan paymnet, and the right-off from
the depreciating asset over time. Also, I don't have to rent or borrow
a boat to get my sea time and keep my license active, and I can make
money (although not a lot) per month, say $300 - average over 12 mos.)

Cost to rent a condo, so I can be near clients: $1200/mo (low estimate)
Cost to buy a condo, 10% down on $450K, since I don't have $450K
sitting around (and that's way low) plus monthly mortgage of $1500
(guestimate) plus boat rental so I can really lose money $300/outing.

Perhaps you see where this is going.

Sure, I could just pay cash, but then, since I don't have a bottomless
pit of cash, I might be a bit short if something interesting, like
another house, comes up for sale. For that, I would put down 20%,
finance the rest, and have break-even or (like now) slightly positive
cash flow.

Bottom line... the cash flow is much better. Thus, it's a better deal
to finance the boat.

Well, I've left out a lot. I'm sure you can pick it apart if you try.






--
"j" ganz @@
www.sailnow.com