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Woodsy · 09-15-2005, 11:14 AM

JRC...

I probably should have been a little clearer. Your condo will continue to appreciate, (and even given a market correction of 10% to 20% if the alleged bubble bursts you will still be ahead of the game) while the value of whatever boat you buy depreciates, rapidly and it will take a bigger hit in depreciation if the Real Estate corrects (because nobody will be buying boats). Its really not the boat depreciation thats a killer, as you can somewhat mitigate that by purchasing a low hour used boat. Its the boat depreciation in tandem with the ever escalating costs of boat ownership... ie: yearly slip rental increases, yearly user fee increases for whatever marina your in, increased taxes (if you happen to be lucky enough to buy a slip) etc. These costs will escalate far faster than the leftover money from the condo will appreciate regardless of how you invest it.

You are far better off refinancing the condo at a low rate to get whatever boat you want and then get a slip for it. The interest rate on the condo will be better than what you could get on a boat. That way you can write off the interest, rent your condo to year round tenant to mitigate your costs, and still have all the benefits of a piece of property that appreciates in value... If you decide marina living is not for you, you still have the condo to fall back on...

I went to a seminar many moons ago (1989?) where Warren Buffett spoke. It was his opinion that you never trade a real estate asset for an asset that depreciates. Given the money he has made, I think its pretty sage advice.

Woodsy

09-15-2005, 11:14 AM	#11
Woodsy Senior Member Join Date: May 2004 Location: Weirs Beach Posts: 1,966 Thanks: 80 Thanked 980 Times in 440 Posts	JRC... I probably should have been a little clearer. Your condo will continue to appreciate, (and even given a market correction of 10% to 20% if the alleged bubble bursts you will still be ahead of the game) while the value of whatever boat you buy depreciates, rapidly and it will take a bigger hit in depreciation if the Real Estate corrects (because nobody will be buying boats). Its really not the boat depreciation thats a killer, as you can somewhat mitigate that by purchasing a low hour used boat. Its the boat depreciation in tandem with the ever escalating costs of boat ownership... ie: yearly slip rental increases, yearly user fee increases for whatever marina your in, increased taxes (if you happen to be lucky enough to buy a slip) etc. These costs will escalate far faster than the leftover money from the condo will appreciate regardless of how you invest it. You are far better off refinancing the condo at a low rate to get whatever boat you want and then get a slip for it. The interest rate on the condo will be better than what you could get on a boat. That way you can write off the interest, rent your condo to year round tenant to mitigate your costs, and still have all the benefits of a piece of property that appreciates in value... If you decide marina living is not for you, you still have the condo to fall back on... I went to a seminar many moons ago (1989?) where Warren Buffett spoke. It was his opinion that you never trade a real estate asset for an asset that depreciates. Given the money he has made, I think its pretty sage advice. Woodsy