What are the Two Best Days of a Boat Owner’s Life?

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This is the time of year when clients come to me wanting to buy an RV or boat. And I get it. It’s easy to get swept up at the moment as you envision parking in a secluded part of the forest and enjoying nature or you see yourself on the lake laughing with friends and enjoying the fun in the sun. But the reality of RV and boat ownership is not always so glamorous—I know from experience. 

Hindsight is 20/20

A few years back, I got excited about the idea of camping with my family and friends at the beach. So, I bought a relatively low-cost used C-class motor home and booked a spot at our favorite beach. Honestly, it was a blast and we created good memories that trip.

But after a couple of years, that motor home needed some costly repairs. I felt a little frustrated, so I sat down to do a cost-benefit analysis of owning the motor home. First, I realized that I only used motor home two or three times a year. The rest of the time, it sat idle. In that idle time, the sun and weather took its toll, especially on all the parts made of rubber and plastic. I was averaging at least $500 per year in repairs. (Admittedly, if I had stepped up to a newer model, I may not have had as many needed repairs.) 

When looking at buying up, I had to look at the opportunity cost of my money. If I averaged a 5% gain on my money and I had $20,000 wrapped up in my RV, that was a $1000/year opportunity cost. Then I started looking at storage and insurance costs. I was personally lucky to have a place to park it at no cost, but many of the people I know pay upwards of $65-$100 each month for storage. Insurance was relatively cheap, but still cost about $20 a month. When we did get the motor home out for trips, it was costing me $15 (or more) per night for a camping space.  So, I ran the numbers. The 14 nights a year I used my RV were not just costing me the price of camping space.

Yearly Cost Breakdown:

$1000 (opportunity cost)

$500 (maintenance)

$240 (insurance)

$210 ($15 x 14 nights of camping fees)

$1950 TOTAL

Real Costs

It was costing me nearly $2000 a year to be an RVer. I have friends that are buying RVs that cost upwards of $100k. Some are using financing, paying for storage, shelling out for higher insurance benefits, and covering other miscellaneous costs. And some of them are having the time of their lives. That is okay. If you have the money and you are getting enjoyment and use out of your boat, RV, or other toys, there is nothing wrong with having it. But for that cost, a person could stay at the Ritz Carlton. 

I know people that go back and forth across the US every year, averaging 100 nights a year (or more) in their motor homes. If you instead spent $100 dollars a night in an average hotel, then owning a motor home would save you $10,000 per year (less the costs associated with owning a motor home). If you are getting this kind of use, owning is the right way to go. 

Of course, this is just the dollars and cents view of RV ownership. There are many other reasons why someone would rather own than rent an RV, such as comradery with other RVers. There are clubs, resort areas, and associations for RVers that are fun and offer exclusive perks. Owning an RV also gives you the ability to keep all the things you like and need for camping handy and ready to go. It’s great to have your favorite chair, BBQ grill, fishing pole, and all the essentials of home readily available.

Something to consider

My advice is just to be aware of the real cost of those benefits. Then, after weighing the pros and cons, if it’s still important to you, then go have fun! Just don’t go buy an RV, boat, motorcycle, plane, jet ski, or any other expensive toy unless you know you are really going to use it. I like to recommend renting one a few times to make sure it’s really something you are passionate about before committing too much financially by purchasing. 

In the end, I would like to hear you say, “Owning that was the best time!” rather than, “The best two days of owning that were the day I bought and the day I sold it.”

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Disclosures

WealthGuard Advisors, Inc. is a Registered Investment Adviser.  California Life Insurance license numbers: Casey Murdock #0F01130.

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