repowers & Hatt future values

[Paul45c]

I just got to thinking with the 60 conv. repower thread that there are going to be more and more "legacy" Hatt owners looking to/needing to repower say in the next 5 to 8 year time frame. Who knows until we all get there, but whenever that magic year is the pressure and rationale certainly will increase the further along we all truck with our old Hatties.

My question? What will this reality do to the market for these boats? The designs of the hulls and all else will still make as much sense as they ever did, and it's hard to imagine a quality Hatt ever going out of style, but we may start getting tirekicked hard by prospective buyers saying "well, I like the old girl, but I can't go with that old legacy DD power. I'll need to invest $XXXXXX for a total repower and I just can't make these numbers work with anything close to your ask."

Brokerboys, what say ye?

 

[Genesis]

Well, I'll tell you what I see.

In the used market, a repower is not worth anywhere near what you spend to do it. Perhaps 25-50% - maximum - and sometimes nothing at all!

Much depends on what you do when you repower.

Reality is that refits don't do the sort of things to value that you'd think they might. They are NEVER good investments. You do 'em because you want to, not to try to get your money back when you sell.

Even with hyper fuel prices, there's no way to make the numbers work in any sort of recreational service. Especially when you consider that most of the time the burn rate doesn't go down that much - what happens is the speed for burn goes up instead....

 

[SeaEric]

The sportfish market is way different than the motoryacht market. With the SF's it's all about speed. A lot of the older Hatts will either become cruising boats, where speed is not so much and issue, or they go the way of the dinosours and become extinct. It takes a lot of ponies to get those big old heavy battlewagons to go fast. There will always be that contingent of crazy rich owners who are in love with their boat and will spend hundreds of thousands of dollars on a repower. Plan to grow old together in that love affair with the repowered boat. Get the money back on resale? Not in this lifetime.

 

[Paul45c]

I agree with both of you on your respective points. To be clear, though, I'm not asking about opinions on the $$$ ramifications of undertaking the repower yourself; specifically, I'm trying to see what you think happens to the value of an old Hatt with original DD power 5-8-10 years from now or whatever, with the thought being those DD's are fully obsolete in many people's eyes by then.

 

[Genesis]

Yep.

These guys who demand 30kt CRUISE (not max!) is why Viking is now coring their sportfish hulls - even the REALLY BIG ones.

I think they're nuts. But this is what the market is demanding, and what they're supplying as a consequence. You wouldn't catch me DEAD doing that.....

 

[SeaEric]

I'm trying to see what you think happens to the value of an old Hatt with original DD power 5-8-10 years from now or whatever, with the thought being those DD's are fully obsolete in many people's eyes by then.

Paul, take a look at the prices older "N" powered Convertible 42's, 45's and 53's. Some bargains can be had. As the 60's and 65's age, the prices will drop or perhaps-plummet.

 

[SKYCHENEY]

DD's will never be "obsolete". Not in our lifetime, anyway. There are just too many of them out there. I will agree that the real fishermen who want speed will not be as interested in a slower boat, but that is no different today than it will be in 10 years. I think that most of our boats are fully depreciated now and the values will probably be about the same in 3 or 5 or 10 years.

 

[Rhoneman]

Maybe the right question is whether the age of the boat (assume really good condition) will prevent value increase, even with repower.

Also, repowered with what: DD may be a big negative. Cummins or CAT or MAN may be a big positive.

Doesn't 32kts WOT with 25-26kts cruise sell better and for more $$ than 18-21 kts?

 

[Paul45c]

DD's will never be "obsolete". Not in our lifetime, anyway. There are just too many of them out there. I will agree that the real fishermen who want speed will not be as interested in a slower boat, but that is no different today than it will be in 10 years. I think that most of our boats are fully depreciated now and the values will probably be about the same in 3 or 5 or 10 years.

I really want to believe that, Sky. I think there has got to come a point, though, where getting the old iron serviced will just become too much trouble for the average boater. Somebody like you or Karl and no doubt several others on this forum can practically do in-frame rebuilds yourself. But the large diesel shops that many customers derive comfort from will get themselves out of the market. As it is, no new young mechanics at those shops are getting Detroit training. In a typical shop with say 25 mechanics, maybe 3 or 4 of the guys still know enough about old Detroits to be useful. Those numbers, even, will dwindle over the years. I don't think it's an unrealistic scenario that 8 years out from here, your only choice for mechanic will be a solo mechanic with no shop behind him. By then, said solo mechanics will no longer likely have the luxury of shopping their Detroit parts no further than half an hour away or whatever (using this market as an example). They'll probably have to start dealing with a couple of mail-order national suppliers for these "antiques."

I was re-reading Karl's excellent post on DD rebuild specs/requirements. One of the points there was a 500 hr./2 year warranty. Your future solo mechanic with no shop behind him simply won't be able to provide that. That's going to make yet more would-be DD-powered boat buyers nervous and think twice.

See where I'm going? It's gonna start to stack up more and more. Will DD's ever go away totally? No, I'm with you, there. But they'll no longer be mainstream. Antique cars of all stripes haven't gone away, but you are a pretty specialized buyer who will be in that market. 99% of car shoppers looking for a good new car will not be interested in even a real classic that's fully restored to showroom condition. It's the way it is.

 

[the kuz]

15 years ago we bought a classic, but slow 36C (1977) for $73K. Last year We put about $100K into new motors, gen set and a complete mechanical rebuild because we love the boat. Re-did the interior and canvas too. We cruise 23 -25 KNTs, and only burn about 1 gal per KNT. We couldn't find a new boat with this quality and performance (especially the security in rough water) for twice the price. I don't know if a buyer will see things as I do, don't care, she is not for sale. I just know she's beautiful and everywhere we go folks tell us so. You will feel the same way if you re-power and restore (the reliability is as good/better than a new boat, not to mention the spotless engine room, the classic lines, and the wood working/craftsmanship that matches the most expensive custom boats). Value is in the eye of the beholder. If you do it, do it right. Regards, Bob K

 

[Boss Lady]

There is more Detroit iron in industrial service than you can shake a stick at and half way around the world. Just because the flavor of the month is MAN, MTU, OR CAT will not change that fact. The manufacturers have not choice but to comply with the EPA requirements for new iron. They will eventually work the bugs out of these new diesels and then maybe they will be attractive when the reliability of the electronics equals the old Detroits. I did not see the value of paying 3 times the price for a good set of Detroits to get the limited efficiency increase offered by the newer engines, and their inherent reliablity problems. I flew the owner of a very large Caterpiller dealship to the Turks a few months ago, along with a mechanic, and new parts down to work on his boat. They had several problems with both engines and the replacement parts were defective out of the box, plus all the parts they located in Miami and Atlanta were also defective. After spending close to $60K on airplanes and parts in addition to the 7 weeks of marina fees and crew salary to sit down there until CAT came up with the fixes really made it clear to me that, if a MAJOR CAT DEALER couldn't get his personal boat fixed, what chance do we mere mortals stand when we have a problem.

Like you said, beauty is in the eye of the beholder. At this point in my life, I wanted certain things from my boat. I want a certain amount of control over my life also. This does not include being held hostage to some computer geeks idea of what an engine management program should look like. I do not want to be held hostage by all the rules of complying with warranty issues found with a new boat either. For this reason and many others the only choice was DETROIT! I might not be able to control my anger, if after plunking down a couple of cool million $$$ for a nice shiny new boat, I wind up having the kind of problems that I see happening every weekend at the marinas I visit. Nothing like seeing a nice Sportfish at the dock with the hood up and the diesel mechanic with his "LAP TOP" there to do a repair when returning from a fishing trip. I can't remember the last time I saw a "dirty" diesel mechanic.

 

[SKYCHENEY]

Paul,
I agree that the independent marine shops may tend to get out of servicing the older model engines, but there will still be DD dealers around. These guys have to be available to service all of the industrial engines that are out there. They are constantly holding training classes. Although they are not usually the cheapest guys around, they do have access to all of the parts.

I don't think that too many repowers will be junking Detroits in the next 8 years to get them out of marine service. Just look at all of the old MY's that are almost impossible to rebuild.

Then there are the busses and trucks. It is rare to repower those. If you need a rebuild, you might exchange, but it would be with the same engine. I rebuilt an old Eagle bus a few years ago. It was an old Greyhound and then Trailways but with well over a million miles on her. We turned her into a nice coach and that 8v71 would really run. Who knows how many of those had been in and out of her over the years.

I understand the push to move into newer diesels, but with all of the old pumps and generators and other uses out there, I doubt the old DD's will become rare for another 30 years or more.

 

[thoward]

I think some of it will depend on the newer boats! If they prove that they will last 30-40 years and still be rebuildable for the average Joe then the old battlewaggons will fall by the wayside. BUT, that aint what is going on. Find a 15-20 year old Ocean and I will bet it has stem problems. How 'bout a Sea Ray without a corring problem. Now look at the # of old 31 Bertrams and then try to buy 1 they are holding their value. For those of us that live in South Florida, the Gulf Stream is only a few miles away and the Bahamas are only 60 miles. The speed factor is much less important down here unless you are a tourney boat. More and more even tournament boats are CC designs not sportfishers.

IMHO the big SFs will maintain their value and may even increase as the cost of a new one skyrockets. What is the cost of that new 60 conv Hatt they are about to release? I guess 2.5-3 Million? Suddenly $400k does not sound so bad.....

 

[Boss Lady]

The new Hat 68C is $5,000,000 lightly equipped. It is a bad ass boat, but it is still $5,000,000 to play!

 

[Genesis]

If you're a speed demon than the old boats just don't do it, unless you put in modern iron.

Its a different market guys. The older Hatt doesn't appeal to that market - never did, never will. That's ok - it appeals to the discerning buyer who doesn't need or want to do 30kts; he understands that 30kts in 3' seas can be done, but its rough on equipment and people - and thus he doesn't, because there's just nothing that important about the time value.

Now for those who want to chase the tournament circuit, that's a different issue. But those guys don't care about the money. Unless you consistently place in the cash this is a huge lose. Yeah, the purse looks good, but I can't tell you how many times I've seen someone blow an engine trying to get back in time to weigh a fish that should make the board - and get nothing, plus destroyed hardware to go along with it. 95%+ of the guys who run that circuit bleed six figure amounts of money every year between machinery and depreciation, and that's without the entry fees. Some of them bleed SEVEN digits worth annually.

I personally don't see the point to tournament fishing. But that's my perspective, and others differ with it. I refused to enter Gigabite when I owned her, even though I had lots of friends who wanted me to enter this and that, and go for the cash. Enticing? Maybe. But what about when you're in that box - you've got a potential winning fish on, the scales are 2 hours out on the pins and its three hours until the scales close. You've got one hour to boat that fish or else, and you're going to make the run in with the throttles firewalled.

Make it, you win $100,000; there's four of you on the boat so you all get a share plus the boat gets one. You, as owner, make $40,000 - that ain't bad, plus your fuel and expenses come off the top of the purse. But if you blow an engine, you lose $50,000, and guess what - none of the guys on the boat helps you pay for it. Hmmmm....

There are guys on that circuit that consider annual majors just part of the price of playing the game. ANNUALLY! I just shake my head - but that's the world they live in......

 

[Boss Lady]

We should not compare ourselves to the tournament guys, since it is equivilent of comparing your Honda Accord to the Chevy that Dale Jr. drives in NASCAR racing. I have a 38 Fountain tournament boat with triple 250 Mercs for Kingfish tournaments, where the average Joe has a 25 Sailfish with a 175. I know guys who smoke a set of Optimaxes every season chasing fish and spend thousands chasing the circuit. Big boats are the same thing, a hobby for rich people who can usually afford it. I guess it keeps them sane. It is all relative to your level of income. Heck I have seen luxury yacht charters that cost $300,000 for one week.

Hey, who says old iron won't do 30 knots? I am using old iron and that is the goal speed. You just have to put more powerful old iron in to go faster! LOL

 

[ADaily3224]

As the price of new boats keeps rising the value of old boats will rise too. Repowers seem more viable in the smaller boat range. How much does a new 36 or so Convertible cost? I think about $450,000 to $650,000, for a good one. You can purchase the average gas powered 36 Hatteras from $75 to $115,000 depending on year and model. If it cost $75,000 to $100,000 to do a complete repower, is it worth it to have $150,000 to $210,000 in a nice solid used Hatteras all done? My thinking is when the cost of the lowest priced similarly sized new boats increases to 150% of the cost of a quality repowered boat the repower will become much more popular. Sometime in the future the numbers will line up and repowering will become a viable alternative to buying a new boat. Until then, it's really up to the individual. I would much rather own a beautifully restored, repowered Hatteras than a new or newer cookie cutter boat. But that's just my opinion.

Tony D

 

[thoward]

We should not compare ourselves to the tournament guys, since it is equivilent of comparing your Honda Accord to the Chevy that Dale Jr. drives in NASCAR racing.

My point kind of....Avg Joe does not need to go warp 50 and most likely can not afford to. I am not sure you could get 30 knots out of a 53, 60 or 65 Hatt conv even if you poured twin 1800hp engines in there. Down the road there will be a desire for the big Hatts espc with the DDs. These new engines are too complex and wound tooo tight.

 

[jim rosenthal]

I think the bigger boats will depreciate proportionally a bit more than the smaller ones. The market is smaller for bigger boats, and the folks in that market have more money to play with, so they can possibly afford to be a little choosier. Also- and I think this is the big part- larger boats are by definition more complex and everything costs more- the fuel, the maintenance, the servicing, etc. You pay a lot to be in the 50' and over club.
The big Hatts are great boats, but the budget yearly is eye-popping, even if you do a lot yourself, and most people on this forum do a lot themselves.

That said, most people don't get into boating by starting out from scratch and buying a 60' Hatteras, or a 60' anything. They move up from other smaller boats. If you've already owned a 42 Hatteras, or a 45 or 46, moving up to a 60 or 65 may not look like such a big jump.

As far as the speed of modern SF boats goes...yeah, right. I think the ones that are being ridden that hard are in the minority. I suspect that a lot of folks buy the speed because it's built in to a new boat, but they don't use a lot of it. Granted, they go faster than old Hatts- their cruise is our top speed in many cases, but they are not running those boats in the pins all that often.

As far as cored hulls go, I agree with Karl- I wouldn't want one under me. UNLESS, and a big unless, it was built by Sonny Hines. His cored hulls are guaranteed for the life of the original owner, and they are incredibly well-built and tough. But everyone else? no thanks- rather have a solid, heavier, slower safer boat.

 

[Paul45c]

Well, since getting a taste I'm a confirmed diehard Detroit fan, so it's encouraging to hear Sky & Chris say the industrial applications of these motors should keep parts & knowledgeable mechanics around for years to come, yet. From your lips to God's ears, guys!

In the meantime, I won't hesitate to do what I've got to do to keep them running. They're a great old design, you can fish with them without getting smogged out, they sound GREAT, and they are about as Mark 1, Mod 0 simple as a high-power motor can get.

And no, even though I'm a sportfish guy (who lightly fishes), I don't need 35 kts. to feel like I've got the right SF under me. Who cares? And who would want to foot that fuel bill other than a tournament guy? Boating for me is a fantastic way to get relaxed & enjoying some other like-minded people on board. You start pushing it up much beyond 20kts, even, and suddenly you can't hold a conversation on the bridge without shouting yourself hoarse.

Anyway, long live Detroits, guys! Thanks for the interesting responses.