How is a yacht appraised? Methods, documents, prices

What are the three most popular reasons for independent valuation of water transport? This is the conclusion of a deal for the purchase / sale, the desire to insure yacht, or the purchase of abroad. In the first case, the valuation helps to get the real market value when your property is sold by the bank. The second point, yacht appraisal is a mandatory procedure for obtaining insurance for a boat, since the amount of the mandatory payment is determined by the value of the vessel. The third case, you bought a ship abroad and cross the border of Ukraine, in this case, the customs will ask you to fill out documents to pay duties.

When is the valuation of a yacht (catamaran) still required?

• has been damaged;
• has become part of the inheritance or appears in the donation agreement;
• is put on the balance sheet of an enterprise either organisation;
• is a contribution to the authorised capital;
• is to be written off;
• is collateral for obtaining a loan;
• is involved in the process of division of property (spouses or company);
• drawing up a power of attorney.

Valuation methods

The inspector chooses one of three methods for evaluating your property. He must justify his choice before the assessment, also state his arguments in the report. A competent inspector will use all three methods!

Comparative method

When there is something to compare with. That is, your boat is not an exclusive-one and there is publicly available data of the purchase / sale of analogues.

Additional equipment is calculated separately, because it rarely happens when two ships of the same model & the same year of manufacture cost the same.

What affects the actual price of a yacht (boat or catamaran)

• year of construction;
• technical characteristics (and additional equipment);
• the degree of moral, physical deterioration;
• year of refit (whether there was a significant repair);
• date of purchase / resale (number of owners);
• the circumstances of the sale;
• place of deployment (by the way, after the pandemic, used yachts from Ukraine began to be bought back to Europe);
• terms of Use;

Cost method

When ship is old and not all the necessary information is freely available, – inspector switches to the costly method. He is trying to analyze all the annual expenses of owning this ship: repairs, maintenance, cosmetic improvements, moor in a marine, fuel composition, winter storage. Further, the residual value is calculated according to the closest analogues.

If the ship can no longer be operated, a scrapping assessment is made: the spending of dismantling, of “ship scrap”, the towing distance to cutting. For example, two American aircraft carriers, USS Kitty Hawk and USS John F. Kennedy, were sold using the cost method. Each for 1 cent. Why? It is unprofitable to keep them, and an independent sawing for scrap metal would spend government $30 million.

Income method

A yacht is equated to real estate that can be rented out, as on Bimbarent. The inspector calculates the possible income that the owner could receive in a year.

In our experience, renting a boat in Ukraine at least pays for the annual costs. To start making a profit, the rental must be turned from a hobby into a job (the boat must be well maintained, on listing high-quality photos).

List of documents for vessel appraisal

The person ordering the assessment provides a choice of a document that is regulated by the place of purchase of the yacht and the country of origin – this is a registration certificate, a purchase / sale agreement, a payment order, an invoice either a check.

In Ukraine, they may request one of these: a document confirming the ownership of the vessel; qualification certificate; a certificate confirming the right to sail under the state flag of Ukraine; seaworthiness certificate; certificate of equipment and provision; an act of the technical condition with details of the condition of the hull, propellers, superstructure; gift, inheritance.

Vessel identification data:

• Make, model (if any)
• Year of construction
• VIN code
• Numbers, volume, power of engines.
• Package contents (list of installed equipment)
• Acts, other documents confirming the fact of replacement of individual components and assemblies
• photographic materials

How much is an appraisal? How long it takes to prepare?

The value of the service in Ukraine varies depending on the length and power of the boat. For example, a boat up to 6 metres and up to 75 hp. – from $24 in Ukraine. Anything more – from $40. The documents preparing for 3 working days.

Do not forget that you can conduct an assessment yourself, but such a document has no legal force.