Wise Buyers at Yachts Miami Beach
If you’re headed to Yachts Miami Beach to look over the huge numbers of brokerage boats and new yachts, or visiting Island Gardens Marina to tour the superyachts, have a great time and enjoy the show. But if you’re coming to buy a boat, you need to have a plan of attack and get your head in the game. We spoke to a pair of boat-show veterans about the best way to take on the challenge at hand.
If you’re reading this today, you may be a bit beyond help, since, as with many momentous decisions and thorough research, time is an asset you should use to your advantage. “Make sure that communication with your broker starts well before the show,” says Gary Smith, a certified professional yacht broker and senior partner at Sarasota Yacht & Ship, as well as president of the Florida Yacht Brokers Association. “If someone comes to the show with the expectation that the broker will be able to drop everything and show them boats for two days, they may become disappointed. With a proper lead time, the experience will be far better, allowing the broker time to research the market and do the proper homework during the time leading up to the show. This way every moment is properly utilized during the show.”
“There were not a lot of new yachts built in the 2009 to 2012 time period,” Smith says. “The market now has become robust again, so the important thing to remember is that if a client wants to buy a late model yacht from that period, the supply may be limited. So the expectation is many will disappear during the show. Since the recession, the new-boat buyers are back in the market and also we’re experiencing a dwindling used-yacht inventory. Along those lines, brokerage pricing has been holding a bit more firm, which is always an indication of a healthy recovery. There’s simply not a lot of inventory out there, so many clients are opting to order a new yacht. Given that dealers are stocking only a handful of boats, it stands to make sense that if the buyer doesn’t want to wait to build something, then they should come prepared to purchase during the show.”
It’s not only the broker that needs time. A buyer who’s thinking about taking a significant step needs to wrap his head around that decision too. “Get permission,” says Mike Joyce, chairman and CEO of Hargrave Custom Yachts. “Most people laugh and say, From whom, my wife? and I say, No, from yourself. Most people do not have permission to go buy a boat and they don’t know it until they get to the bottom line and it’s time to sign the contract and they can’t do it, because they haven’t thought about it. It’s often the biggest purchase in their life, and more than they paid for their home or to start their business. The only way that I’ve seen that you can accumulate the kind of money to buy what we sell is you keep sacrificing throughout your whole career and you keep saying no to decisions like that. And that’s how one day you can afford it.”
And the deals are there. The market is interesting right now, as inventory is dwindling. This is in part due to the low numbers of boats produced during the doldrums of the recession of 2009 through 2012. The boats built then are hitting the five- to seven-year-old mark that puts many of them up for sale as one-owner boats, a proven segment of brokerage inventory in the past. “There were not a lot of boats made in that 2009 to 2012 range,” Smith says. “The market now has gotten pretty robust again so if you want to buy a boat from that build period there are not that many of them out there. So the expectation is those will disappear during the show. Since the recession, the new-boat buyers are back in the market. We’re starting to see the used-yacht inventories have really dwindled quite a bit, although pricing hasn’t really risen. But prices have been holding a little more firm, always an indication of a healthy recovery in my opinion. There’s not a ton of inventory out there, so people are ordering new boats and dealers are maybe stocking only a handful of boats. So if the buyer doesn’t want to wait to build something, then they should come prepared to purchase at the show.” Sounds like the deals are there, for those ready to pull the trigger. Are you ready?
Here’s a great way to get ready. “Put your dream on a piece of paper: What are the top five or top ten things that you actually want?” Joyce says. “Everybody wants everything, of course, but if you think about it there are some things that are very important: Let’s say your slip is a maximum 80 by 20 feet. Well, if the boat is 90 by 22 feet, it doesn’t matter if it’s free—it’s not going to fit in your slip. If the draft in your harbor is 4 feet 10 inches and you’re looking at a boat that’s everything you want but it draws 6 feet … People literally make actual buying decisions and don’t even think about it until after they bought the boat. So if there’s something about the number of cabins, the draft, the price, the brands you want… I tell people if you’re not going to buy a Hargrave, look at the top three brands—chances are that’s your best chance to get out without waiting a year or more in resale.”
No one is going to narrow the choices for you, just as no one is going to buy the boat for you. Prepare properly, get your head in the game, and stick to your guns. The next boat you see may just be your next boat.